Carmakers to Set Up Rival F1 Series

Europe's major carmakers said on Wednesday they would set up a rival series to the Formula One motor racing championship in a bid to wrench control of the sport away from German media group Kirch and its partner EM.TV.

The announcement, which could revolutionise one of the world's most glamorous and lucrative sports, was made in a statement by Paolo Cantarella, chairman of both the European Automobile Manufacturers Association (ACEA) and Fiat.

"As a result of recent developments and in the best interests of motor sport, it has been unanimously agreed to set up a joint company, the purpose of which will be to establish, as soon as possible, a new open-wheels single-seat racing car series," Cantarella said.

ACEA's members include Fiat, Ford, BMW AG, Renault and DaimlerChrysler, all of which have interests in Formula One racing teams.

The association has been trying for months to block a bid by Kirch and EM.TV & Merchandising AG to gain a greater hold on the rights to broadcast Formula One races.

ACEA says it fears that the German companies will attempt to shift the sport from free-to-air to pay-per-view television, an accusation which Kirch and EM.TV have rejected.

The media companies took effective control of the commercial and broadcast rights to the sport when they upped their stake in Formula One broadcast rights group SLEC from 50 percent to 75 percent at the end of February.

They did this by buying a 25 percent stake in SLEC for $987.5 million from motor racing mogul Bernie Ecclestone.

Since then EM.TV, Kirch and Ecclestone have been in talks with Europe's carmakers in a bid to allay the carmakers' fears that the sport will be hived off to pay-per-view television channels.

EM.TV said after Cantarella's announcement that it did not believe those talks had failed. It and Kirch have said they are prepared to offer the carmakers a stake in SLEC.

EM.TV and Kirch said two days ago that they would appoint six of the eight members on the SLEC board from now on and that the Bambino Trust, controlled by Ecclestone, would appoint the other two.

Before February, when the German partners upped their stake in SLEC, they were allowed only four board appointments to Ecclestone's four.

The Formula One championship has been operating in its current form since 1950, when five mostly Italian teams took part.

The current world constructors' champions are Ferrari, owned by Fiat. Ferrari's Michael Schumacher is the defending world champion driver and 2001 championship leader.