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Ferrari abandon F1 rival series plan
Alan Baldwin | January 20, 2005 10:45 IST
World champions Ferrari abandoned plans for a rival Formula One series on Wednesday with a surprise deal to extend the sport's existing commercial agreement until 2012.
FIAT-owned Ferrari are founder members of the GPWC (Grand Prix World Championship), set up by carmakers planning their own series after the 'Concorde Agreement' expires in 2007.
"I don't think it's the end of the GPWC but it is the end of them starting a separate championship, I can tell you that," Minardi boss Paul Stoddart told Reuters.
Ferrari are the only team to have been in Formula One since the first championship in 1950. Their support is deemed crucial in any power struggle.
In a statement issued with the governing International Automobile Federation (FIA) and Bernie Ecclestone's Formula One Management, they made their allegiance clear on Wednesday.
"Further to discussions regarding the long-term development of the FIA Formula One world championship, the FIA, Formula One Management (FOM) and Ferrari have agreed to prolong the Concorde Agreement for the period 2008 to 2012," they said.
FIA president Max Mosley said the prolonged agreement "will ensure the future development of the FIA's most important championship".
Bernie Ecclestone, the commercial rights holder who is facing legal action from shareholder banks, added: "Formula One Management are delighted that this agreement is in place and that the future of Formula One has now been stabilised."
Ferrari president Luca di Montezemolo, who has repeatedly called for the teams to get a far greater share of Formula One's revenues, hailed a "strong message of stability for the future of Formula One".
"This agreement is in line with what Ferrari had hoped for, for a long time," he added.
A GPWC spokesman would not comment on the situation. A source close to the carmakers cautioned however against writing off the rival series.
Minardi's Stoddart said he was not too surprised by Ferrari's action, however.
"The timing is impeccable, full credit to Bernie," he said. "I don't think there's anything sinister in it. It's a rather major coup on Bernie's part."
Stoddart said that while all the parties were perfectly entitled to agree an extension, there appeared to be a clear conflict of interest for di Montezemolo as a key figure in the GPWC alongside Renault, BMW and Mercedes.
"I reckon there's probably another trick to come in this," he added.
Ecclestone said however that Ferrari had resigned from the GPWC last year and said Formula One was now in good shape.
"It's what we should have done a year ago," he told Reuters, adding that he had spoken to all the teams expect Jordan and all had sounded positive.
Stoddart suggested that the carmakers could be poised to do a deal with the sport's shareholder banks and become the ultimate owner of the commercial rights.
"I think we could see a deal behind the scenes for the GPWC to take over the banks' holding and emerge as the owner of Speed Investments," he said.
He pointed out that the Ferrari agreement was for another five years only, rather than 10, which could make it hard for the banks to extract sufficient value from their shares by means of a previously mooted flotation.
The banks -- Bayerische Landesbank, JP Morgan and Lehman Brothers -- inherited 75 percent of the shares in the SLEC holding company that controls Formula One's commercial rights after the failure of Germany's Kirch media empire.
Eager to recoup a billion dollar investment, they won a court ruling last month for control of Formula One Holdings and are taking further legal action to try to take over other Ecclestone companies such as FOM.
The latest round in the law courts had been scheduled for Tuesday but was adjourned to next week.
Formula One: The Complete Coverage