MOTOR SPORT: Bernie Ecclestone's Formula One empire was under threat last night after an alliance of car manufacturers announced they would set up a rival world championship series by 2008 to give a fairer financial deal to all the competing teams.
GPWC Holdings, which includes BMW, Ferrari Maserati, Renault and DaimlerChrysler, has appointed International Sports and Entertainment AG to work on the operational and commercial structure for a new open-wheel racing series to start no later than 2008.
"We have been more than patient with the management and governance of Formula One, but recent developments have underlined the need for a structure which guarantees a stable and prosperous future," said Jurgen Hubbert, the former Mercedes- Benz board director who is chairman of GPWC.
Up to now, GPWC was seen as little more than a pressure group which Ecclestone could ignore. He now has to decide whether to release more of his commercial-rights income or allow GPWC to show its hand, which could result in a damaging split.
Despite undertakings, Ecclestone is accused of failing to comply with key points in an agreement to step up his payments to GPWC's partner teams, including Ferrari, Williams, McLaren and Renault, who feel they make the series what it is.
The turning point came last December when the teams agreed to shelve plans for a separate championship if Ecclestone offered a better deal. None was forthcoming, so they withdrew from the undertaking in April and continued with their plans.
The commercial and administrative framework of Formula One has been enshrined in the Concorde agreement since the early 1980s, a complex contract which bound together Ecclestone, as the Formula One commercial rights holder, the FIA and the competing teams.
The sport's commercial-rights income has grown to unimaginable levels. It is estimated that the sport's rights now generate €626 million, taking into account TV income (€195 million), trackside advertising and corporate hospitality (€157 million) and fees paid to Ecclestone by promoters (€290 million).
Yet the teams' only significant share is a percentage of the TV income, plus about €131,000 a race for turning up, leaving the bulk of their income to be earned by sponsorship deals.
The 10 competing teams share about €91.6 million from annual their percentage of the TV income with the remaining 53 per cent going to SLEC, the company founded by Ecclestone to exploit the revenues and in which he owns a 25 per cent stake, having raised $3.4 billion from a bond issue and the sale of the other 75 per cent in 1999.
What really irks the teams, however, is that the FIA granted Ecclestone a 100-year lease of the Formula One commercial rights for a fee of $313.6 million two years ago, as part of its undertaking to the EU that it would ensure the commercial and sporting administrations were separated.
Ecclestone's response has been to continue granting long-term contracts to circuit owners to ensure he has them under his wing. Yesterday he was in Cancun, Mexico, where a five-year deal for a grand prix from 2006 was announced.
