Carmakers, Banks Agree on Future of F1

The future of Formula One was secured on Friday after leading manufacturers dropped their threat to create a breakaway series after signing an agreement to buy into the sport.

Carmakers, Banks Agree on Future of F1

The future of Formula One was secured on Friday after leading manufacturers dropped their threat to create a breakaway series after signing an agreement to buy into the sport.

The five key Grand Prix players who created GPWC Holdings - Ferrari, BMW, DaimlerChrysler, Renault and Ford - had planned to create a new series if they were not given a greater slice of the sport's revenue.

But the GPWC today finalised a deal with Formula One supremo Bernie Ecclestone and the banks which own the controlling interest in SLEC, the trust which holds the commercial rights to the sport.

"Obviously my main interest has always been to secure the long-term future of Formula One," Ecclestone said.

As part of the new agreement, Formula One teams will get a significant increase in the revenues they receive under the Concorde Agreement - the document which governs the commercial side of sport and which expires in 2007.

The GPWC will also get three seats on the board of SLEC, with the banks - Bayerische Landesbank, Lehman Brothers and JP Morgan - retaining their 75 percent majority stake.

It had been thought that the banks were keen to sell their stake ever since they obtained it as part of the demise of the Kirch Media Group empire, but a statement said that "current SLEC shareholdings are not anticipated to change significantly".

The statement gave no financial details, promising more information at a news conference to be held in mid-January, but five main points were agreed.

Team would be allocated significantly more of the revenues and the carmakers would be represented by three directors on the board of the SLEC holding company that has a 100-year deal for Formula One's commercial rights.

Gerhard Gribkowsky, representing SLEC shareholders, said the memorandum created "a stable and long-term platform for all constituents of (Formula One), most importantly the teams.

"At the same time we have secured the commercial basis for the financial stability of Formula One."

Ecclestone, who has built Formula One into the cash-generating spectacle that now commands global attention and generates an estimated annual income of around $400 million, will continue to run the company.

The 73-year-old Briton controls 25 percent of SLEC, named after his wife Slavica, through family trust Bambino Holdings. All the signatories also committed to listing the company in the short to medium term.

"With an amended and extended Concorde Agreement about to be signed, and a general consensus on the key issues, I am very optimistic," Ecclestone added.

The leading car manufacturers had threatened to pull out of Formula One at the end of 2007 and set up a rival series - named Grand Prix World Championship - if they were denied a say in how Formula One is run.

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