Well, news to me, as I haven't been following the off-season shenanigans
in Bernie's series, but here's what I gleaned from some newslist I'm on:
<< Although a full grid of twenty-four cars had been expected, with the
announcement that Prost Grand Prix went into official liquidation last
month this has now reduced the grid back to twenty-two drivers.
Other changes see Toyota make their F1 debut, offering a threat to the
mid-pack runners, and the Benetton marque leaving the sport to be
replaced Renault who fully take over the team from this season. >>
Also saw this on the Daily Mail & Guardian site:
<< German media group Kirch has put Formula One up for sale and offered
Rupert Murdoch a "substantial" stake in its TV business in a bid to
stave off bankruptcy... Leo Kirch, the 73-year-old owner, has conceded
that his media empire must be broken up in order to settle debts
reaching more than �5-billion [that's $US8 Billion-with-a-B!). The 58%
stake in SLEC � the company that controls the broadcasting and marketing
rights to Formula One � is a prize asset and Kirch's advisers will start
soliciting offers before the end of the week. Bernie Ecclestone, the
former owner of Formula One, is said to be interested in buying the SLEC
holding for a knock-down �560-million...
The German media empire must sell its shareholding in SLEC - the
marketing and broadcasting arm of formula one - in order to pay off a
mountain of debts and liabilities.
But although Kirch owns the broadcasting and marketing rights to formula
one for 99 years, there is no guarantee that formula one teams will be
around in five years' time.
The likes of Jaguar and Ferrari are committed to the sport until the end
of 2007, under the terms of the current Concorde agreement, which
governs formula one. After that, they could form their own breakaway
competition, something the teams have been threatening to do for the
past two years.
This could scupper any involvement from Rupert Murdoch, who is tipped as
a possible SLEC buyer and was in Berlin yesterday for a "top-secret
visit", according to News Corporation executives.
The rest of SLEC is owned by ailing German media firm EM.TV and Mr
Ecclestone, who owns 25% of the company after selling most of it to
EM.TV two years ago.
Mr Ecclestone, the founder of formula one, is the most obvious buyer for
the stake, which was valued at more than �1.3bn at the time of the EM.TV
deal but is now worth about �560m. But Leo Kirch, who established and
owns his eponymous group, will be sweating on two factors that could
block a rescue by the formula one veteran. The most important issue is
price, with the value of sports broadcast rights becoming more fluid by
the day. Sports rights are no longer a valuable commodity as vast
outlays on competitions have failed to secure extra advertisers and subscribers.
Many formula one industry veterans doubt if Mr Ecclestone - a
notoriously hard dealmaker - will let Kirch get away with a decent price
in a buyers' market. Some have already estimated the 71-year-old
billionaire will make a take-it-or-leave-it offer of �200m, although it
is highly unlikely Kirch's long list of creditors will let the group
accept such a low bid.
The second factor is the car manufacturers, which provide the excitement
for millions of racing fans across the world. This group of potential
buyers will not leave the bidding table quietly. The likes of Ferrari,
Jaguar and Toyota threatened to quit formula one and set up a rival
competition last year amid fears Kirch would turn the races over to
pay-per-view broadcasters. Car manufacturers thrive on the publicity
provided by the races, which enjoy massive audiences on free-to-air
television. Sponsors are also determined to keep the sport on
free-to-air TV and they would form a formidable alliance with the car companies.
A successful race for Jaguar or Toyota could boost sales of the
companies' consumer cars, while the glamour surrounding the formula one
circuit generates plenty of positive PR. One sports analyst, who
declined to be named, said Ferrari, Jaguar and Toyota would leap at the
chance of taking a controlling stake in SLEC.
"Even before Kirch found itself strapped for funds, the car makers
wanted a rival series because they were not getting a decent cut from
broadcasting and marketing," the analyst said. "It is no surprise they
are the main candidates. Formula one is a very expensive investment and
the level of control they have is very limited at the moment."
It is likely a media company will make a rival bid for the rights but
any sports deal will be subject to close scrutiny by investors - and
there are no obvious buyers as the European media sector struggles with
a prolonged advertising downturn.
Kirch claims it has offered a 25% stake to the manufacturers before but
both sides failed to agree on price. But the German group has lost the
initiative and it might have to accept a low price for a much bigger stake.>>
The Guardian goes on to report; "KirchPayTV is losing �1m per day and
will collapse in September", and that the prospect of tabloid mogul
Murdoch buying up Kirch -- which also includes national treasure Axel
Springer publishing group (Bild) -- has the German government in the
biggest uproar since the Reichstag fire.
