Joint Venture to Develop New Car Race to Replace Formula One

From AFX News Limited

LONDON– GPWC Holdings BV, a group of four carmakers, said it has appointed International Sports and Entertainment AG (iSe) to start building the operational and commercial structure immediately for a new car racing event replacing Formula One by 2008 at the latest.

GPWC said iSe, a joint venture between Dentsu Inc. and Publicis Group SA, is a leader in global sports marketing and management.

GPWC was set up in 2001 by Bayerische Motoren Werke AG, DaimlerChrysler AG, Fiat SpA’s Ferrari and Renault SA after negotiations with Formula One boss Bernie Ecclestone failed to reach a deal, among other things, on improving the economic benefits for all participating teams.

Juergen Hubbert, GPWC chairman and DaimlerChrysler’s board member for the Mercedes Car division, said in today’s statement that carmakers have been “more than patient with the current management and governance of Formula One, but recent developments have underlined the need for a structure that guarantees a stable and prosperous future for the sport.”

According to industry sources, the “developments” Hubbert had referred to were the lawsuits filed by creditor banks against Ecclestone’s Bambino Trust company, which holds a 25 percent stake in Formula One holding company SLEC.

The banks hold 75 percent but have complained they have no influence on SLEC’s business affairs.

Industry sources expect Formula One to die a natural death when the Concorde Agreement, signed by the Federation International de l’Automobile (FIA), Ecclestone and the participating teams, is not renewed when it expires end-2007.

The 10-year agreement covers the technical and operational regulations as well as commercial rights of Formula One.

_______________________________________

Click here to view the rest of today’s headlines.