After the declaration made on Thursday, DaimlerChrysler board member Jurgen Hubbert has fired another warning shot across the bow of the Kirch Gruppe, the German media firm that now owns the majority of the company controlling the TV and...
After the declaration made on Thursday, DaimlerChrysler board member Jurgen Hubbert has fired another warning shot across the bow of the Kirch Gruppe, the German media firm that now owns the majority of the company controlling the TV and commercial rights to the Formula 1 World Championship, saying that it needs to address the distribution of funds among the teams or face the prospect of competing with a new, manufacturer-driven rival series.
Hubbert, a key player in the McLaren/Mercedes partnership, spoke at an informal gathering at Mercedes headquarters in Stuttgart on the night before the annual Mercedes-Benz "Stars and Cars" celebration. He said the new series threatened by the European Automobile Manufacturers Association (Association des Constructeurs Européens d' Automobiles, or ACEA) - a Brussels-based consortium consisting of Fiat, Renault, BMW, DaimlerChrysler and Ford - was prepared to move forward with its plans to create a rival Grand Prix series if a more equitable distribution of F1 commercial income was not reached.
The Kirch Gruppe now owns 58% of SLEC, the family trust established by Bernie Ecclestone to oversee the F1 commercial rights, and is trying to increase its share to 75%. Even though Ecclestone retains 25% of SLEC and the power to run the series' commercial affairs, the manufacturers are concerned about the prospect of Kirch taking Formula 1 to pay-per-view and the teams are dissatisfied with the share of the series profits they currently receive. There is widespread concern about what will happen to the series - and the money - once Ecclestone retires.
"It is only right that we have a fair share of the income stream split between the car manufacturers and the teams," Hubbert said. "The problem is that people have paid a lot for SLEC, but what is its real value? The problem is to make sure that the target we set ourselves is manageable. We want Bernie Ecclestone to stay as long as he wants to, running the sport, but we need to have in place a management team to take over after him. "The manufacturers have started the discussions about the future of Formula 1 because we want a stable platform. We want to know what is possible because it's important for our business."
McLaren boss Ron Dennis seconded Hubbert's opinion. "No team in F1 us currently satisfied with the commercial arrangement," he said. "The share most teams receive from SLEC normally sits between 12 and 15% of their overall budget. This is significant money, but the teams' prime concern is stability. If we can't have (commercial) stability, then we won't have the sponsors we need to attract in order to find the growth.
"Bernie has done tremendous work in building up Formula 1. Nobody begrudges what he has earned from it. But putting my own hand up, I have concerns about a third party (namely Kirch) having such an influence when they have contributed nothing to the success of Grand Prix racing. The teams feel completely justified having a greater revenue stream. What value is a circuit with no actors?"
The current Concorde Agreement under which the series is governed expires in 2007. The ACEA has stated that it will have a new series ready to roll in 2008, and that could make Kirch's investment in SLEC worth virtually nothing. Hubbert and Dennis both agreed that the best solution was to work out an equitable solution with Kirch, but that the negotiations would be tough. "It is difficult to say because it's not easy for all sides," he said. "It needs due diligence, and that's what we have to do. My personal feeling is that it would be crazy not to come to an agreement."
Dennis confirmed that talks with Kirch were ongoing about a revised Concorde Agreement, and that a committee comprised of himself, Jaguar's Niki Laudaand Arrows' Tom Walkinshaw were representing the teams.
Mercedes motorsport director Norbert Haug summed it up, saying, "The main issue is to safeguard the future development of Formula 1. That's all we're trying to do."