Ecclestone Tight-Lipped on EM.TV/Kirch Deal
Formula One boss Bernie Ecclestone may find himself head-to-head with EM.TV founder Thomas Haffa after the German media group agreed a rescue package which hands the Kirch empire a share in Formula One.
Formula One boss Bernie Ecclestone may find himself head-to-head with EM.TV founder Thomas Haffa after the German media group agreed a rescue package which hands the Kirch empire a share in Formula One.
Debt-laden EM.TV said late on Wednesday it would sign a deal with media company Kirch, handing their privately-owned rival 25.1 percent of EM.TV's voting rights and half of EM.TV's 50 percent stake in Formula One holding SLEC.
As part of the deal, Kirch, Germany's largest television group, will pay EM.TV $550 million and back a loan to enable EM.TV to exercise an option to buy a further 25 percent stake in SLEC for around $1 billion.
However, Ecclestone kept his cards close to his chest on the EM.TV/Kirch deal.
"I can't comment, not because I'm being difficult, which I am normally, but because I don't know, and I doubt whether they know what they've done," Ecclestone was quoted as saying in Formula1.com.
But some industry sources said Ecclestone was less than pleased with the prospect of Kirch entering the racing fold.
"EM.TV and Kirch will potentially own 75 percent of SLEC and I can't see Bernie being too enthusiastic about that. But there's not a lot of visibility on what is going on," said one London analyst.
Renowned as a ruthless businessman, Ecclestone has vowed to stay at the helm of motor racing until the day he dies, having transformed Formula One into one of the most popular sports.
But after major heart surgery two years ago, the 70-year-old decided to sell half of SLEC to EM.TV, with an option over a further 25 percent stake.
According to some sources, Ecclestone has the right to veto a change of control in SLEC or the sale to a media company.
Industry sources close to EM.TV said the former provision did not hold as Kirch is not taking control, but others said the provision to veto the sale of a stake to a media company may apply.
"They (EM.TV/Kirch) will probably try to find their way around (the provision) if they can, but I think it will be difficult for them to achieve that by saying they are not involved," Ecclestone said.
EM.TV and Kirch would only say on Wednesday that they were interested in finding a "lasting solution" with Ecclestone.
An EM.TV spokesman declined to comment on the possible veto right, but noted that Haffa and Ecclestone were constantly in contact.
Three-Way Split
As part of his original vision, Ecclestone wanted to see SLEC split three ways between himself, EM.TV and a group of carmakers, industry sources say.
By bringing the carmakers on board, Formula One would ensure its long-term survival and gain lucrative rights to merchandising related to the teams and drivers.
According to industry sources, the carmakers, led by Fiat CEO Paolo Cantarella, have been speaking to both Ecclestone and EM.TV about the possibility of buying a stake.
EM.TV may sell on 25 percent of SLEC to the carmakers for a profit, if it exercises its option, they added.
"(If the deal goes through), it's then up to the car manufacturers to try and do a deal with them (EM.TV/Kirch)," Ecclestone said.
Asked if he would consider selling his stake, Ecclestone said: "We would be prepared to talk to the car manufacturers and do whatever we can with them. That is a trust matter".
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