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JANUARY 22, 2005

Hubbert urges teams not sign with Ecclestone

Jurgen Hubbert, the boss of the Grand Prix World Championship, the automobile makers' alliance designed to get a better deal in Formula 1 racing, has urged the Formula 1 teams not to sign the deal being offered to them by Bernie Ecclestone until they have heard what the GPWC has to offer. A meeting is planned for the end of February to show the teams the figures that the GPWC is going to be offering and Hubbert says it will be a better deal than that on offer from Bernie Ecclestone. Ferrari is believed to have been offered a $100m payment to sign up with Ecclestone and (probably) a percentage of the profits after that. The other teams will not be offered anything like that kind of a deal but will be forced to accept the situation unless they unite and are willing to stand up against Ecclestone, Ferrari and the FIA.

"Ferrari's wish to extend the agreement until 2012 has no impact on the current commercial arrangements," Hubbert said. "I am confident that GPWC can demonstrate that it can create an environment of fairness for our sport, different from that which appears to result from Ferrari's unilateral decision to enter into a private agreement with the commercial rights holder and the FIA."

The idea of a breakway series without Ferrari is hard to imagine because everyone knows that this would create a split that would do the sport enormous damage. They have only to look to America to see the destruction of open-wheeler racing since the CART-IRL split in 1997 which has allowed NASCAR to become the dominant force in motor sport in the United States.

If the other nine teams do stick together and go for a deal with the GPWC it would force Ecclestone, Ferrari and the FIA to either look again at the arrangements or to try to start building up other teams to take the place of the names like Williams and McLaren in 2008. Unfortunately, this policy is unlikely to be very successful as the World Championship would have little credibility if all the best teams bar Ferrari were racing elsewhere.

The other thing which must be taken into account is the fact that Bernie Ecclestone has still got to hold on to his control of the Formula One group of companies in the face of a concerted legal attack by three banks which hold 75% of the shares of the Formula One Holdings company and are demanding voting power in line with that level of ownership. The banks and the GPWC could still get together and form an alliance aimed at getting Ecclestone out of the Formula One group by agreeing a long-term financing scheme which would pay the banks the money they want from the sport and at the same time ensure that there is no split in F1. The outcome of this strategy is dependent on the law courts in England and while these are slow there will come a point at which Ecclestone must prove his case or accept that the banks have a right to call the shots. Thus far the courts have ruled in favour of the banks.
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