German media group Kirch is selling off assets after the collapse of its KirchMedia unit.
Formula One markers could become the owners of the sport’s broadcasting rights after the fall of KirchMedia. The group’s investors have abandoned plans to rescue the company after a series of liabilities and funding arrangements were disclosed, scuppering any plans by banks and minority shareholders to restructure the group and prevent it falling into administration.
The group now wants to sell its 58% share in SLEC, the secretive company that runs F1. KirchMedia paid nearly GBP1 billion for it, but it is now reported to be considering a knockdown bid of GBP560 million from Bernie Ecclestone, the man it bought SLEC from in the first place.
However, the car manufacturers involved in Formula One – Ferrari, BMW, Mercedes-Benz, Renault and Ford – have formed a consortium called GPWC Holding, intended to give the manufacturers a greater say in the development of the sport. In particular, they have insisted that the sport remains broadcast on free-to-air television, and have threatened to form a breakaway racing series if their wishes are not met.
The manufacturers invest massive sums of money into Formula One, and some are beginning to question the value they are receiving. Ford, backing the Jaguar team, is among the biggest doubters. The success of its team is failing to match Ford’s investment, with both Jaguar cars a long way behind the leaders this season. On the other hand, Fiat’s Ferrari team is on the crest of a wave, with a legion of fans spending millions of pounds on merchandise.
Gaining greater control over F1 would give the manufacturers a greater say in how the sport is run and would no doubt help the carmakers to better justify the investments they make. Such a move would also enable the carmakers to increase the revenues they receive from the sport.
