Ecclestone empire faces collapse

THE Formula One empire of Bernie Ecclestone was close to collapse last night as Europe's biggest carmakers announced that they are on the verge of setting up their own rival series. The five biggest carmakers in Formula One - Renault, BMW, ...

THE Formula One empire of Bernie Ecclestone was close to collapse last night as Europe's biggest carmakers announced that they are on the verge of setting up their own rival series. The five biggest carmakers in Formula One - Renault, BMW, Mercedes, Fiat and Ford - would take the sport's most important drivers and teams with them and effectively wipe out the business built by Mr Ecclestone over the past 30 years. They own or control all the top teams, such as McLaren, Williams and Jaguar, as well as Ferrari, which employs Michael Schumacher, the world champion.

Mr Ecclestone, Britain's sixth richest person, refuses to accept that Formula One is under threat of the biggest breakaway in sport since Kerry Packer split the cricket establishment in 1977. But he appears to have underestimated the depth of anger among carmakers, who believed that they were going to be allowed to buy a share of control in Formula One, in which they are investing billions of pounds.

Instead Mr Ecclestone is preparing to allow Kirch Group, the German pay-per-view television company, to take full control of Formula One in a deal worth an extra $1 billion (£700 million) to SLEC, the family trust registered in the name of Mr Ecclestone's Croatian-born wife, Slavica.

News that the deal had been waved through by Germany's version of the Monopolies and Mergers Commission prompted Paolo Cantarella, president of Fiat and chairman of the carmakers' group, to issue a terse statement yesterday saying that the members of the European Car Manufacturers' Association, along with the Japanese manufacturers Honda and Toyota, were preparing to go it alone.

It said: "As a result of recent developments and in the best interest 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 single-seat, open-wheel racing car series."

Only the lowly Prost, Arrows, Sauber and European Minardi teams would be left behind as the rest fled to a new world championship. Even then, Prost and Sauber depend on Ferrari for engines, which would leave Mr Ecclestone and Kirch with the shell of a world championship contested between two teams, neither of which has won a race.

The carmakers' ambitious move has been triggered by the European Union's recent success in overcoming Mr Ecclestone's objections to its competition rules.

Now the carmakers can run their championship on many of the same circuits as Formula One and gain the official sanction of the Federation Internationale de l'Automobile (FIA), the sport's ruling body. Max Mosley, the FIA president, confirmed that the new championship would be given his blessing provided it met all safety regulations.

Mr Mosley, a close confidante of Mr Ecclestone, added: "If the carmakers do go out on their own we would be happy to sanction their series as long as it was safe. It was part of the understanding with the EU that other series could run their own world championships so there is nothing to stop the carmakers if that is what they want."

Mr Ecclestone has turned Formula One from a gang of enthusiasts into a £3 billion business with fortnightly television audience beaten only by the Olympics and the World Cup.

The Kirch Group, run by Leo Kirch, holds the television rights for the 2002 World Cup and provoked a storm when Herr Kirch wanted to charge £175 million for British rights. Carmakers fear that Herr Kirch will be just as demanding once he controls Formula One, perhaps even introducing pay-per-view, which would deny the carmakers the mass exposure they were seeking when they went into Formula One.

The carmakers have clearly decided they would be better off running their own championship and ensuring that races stay on terrestrial television. Urgent talks are expected over the next few days to try to prevent the breakaway by brokering a deal that might allow the carmakers to buy into Kirch or the SLEC trust.

Mr Ecclestone, who would stay on to run the business for Kirch, said: "The manufacturers are worried about what happens to Formula One when I am no longer here and have decided to look at ways of doing it themselves."

-FOSA-

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About this article
Series Formula 1
Drivers Michael Schumacher , Bernie Ecclestone
Teams Ferrari , Mercedes , Sauber , McLaren , Williams , Minardi