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Ecclestone set for F1 showdown

Formula 1 supremo Bernie Ecclestone's grip on the running of grand prix racing is now set to face its biggest ever threat later this month, after an appeals court hearing in London on Friday morning gave the green light for court proceedings that challenge his ruling to go ahead

The appeals court delivered a verdict that stated a case deciding who has the power to make decisions in the running of F1 should be heard in Britain. It rejected pleas by Ecclestone's companies that it be heard elsewhere.

The case revolves around the fact that Ecclestone has sole management control over the Formula 1 group of companies, even though he owns just a 25 per cent shareholding. The other 75 per cent of the shares are owned by three German banks, who do not have a direct say in policy decisions.

The banks believe that Ecclestone has acted incorrectly in maintaining control of the board even though he has a minority shareholding. Should their point be accepted by the courts then they will almost certainly be awarded the right to award themselves greater control of the companies - most probably with a majority say. This will likely end Ecclestone's influence over the sport.

Such a scenario could lead to the banks deciding that to safeguard their mammoth investment in the sport from the threat of a breakaway championship in 2008 then they will have to do a deal with the sport's manufacturers to keep them loyal to F1 instead of their plans for a Grand Prix World Championship (GPWC).

This could be achieved through a more balanced distribution of the sport's finances between the shareholders and the teams - something that was agreed late last year but subsequently collapsed.

It is understood that the banks have not made any formal approach to the GPWC representatives yet, however, as preparations continue for the new championship that is planned to start no later than 2008. A few weeks ago, marketing company International Sports and Entertainment (iSe) was appointed to help with these plans.

Should the courts rule in favour of Ecclestone later this month, then it will almost certainly increase the GPWC's determination to create its own championship - leaving the banks facing the prospect of being shareholders in a massively devalued F1.

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