Formula One Management
From Wikipedia, the free encyclopedia
| Formula One Management Limited | |
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| Type | Private |
|---|---|
| Founded | 1981-02-13 |
| Headquarters | London, United Kingdom |
| Products | Operation of sports arenas and stadiums Motion picture and video distribution Other sporting activities |
| Revenue | £39.855 million (2004) |
| Employees | 209 (2005) |
| Parent | Petara Ltd. |
| Source: ICC Directory of UK Companies | |
Formula One Management, or FOM, is a corporate entity dealing with media relations and financial matters regarding Formula One. FOM is a subsidiary of Formula One Holdings and ultimately Alpha Prema. (see table).
Contents |
[edit] Overview
The president of FOM is Bernie Ecclestone who has presided over the company since it has existed its current form. For media matters the company controls the media distribution and promotion of content regarding Formula One. The Formula One website content is managed by Formula One Management. FOM itself, however, does not have a definitive website of its own. Financially, FOM provides partial investment for tracks and teams in order to establish Formula One where its popularity may not be well established. FOM maintains the commercial rights to the team names, Formula One logos, and all media content regarding Formula One. Coordination of planning and racing events are done with the Fédération Internationale de l'Automobile or FIA. Although FOM manages content on the Formula One website displays the rules and regulations of the races, the rules are established by FIA.
FOM owns a BAe 146, registered as G-OFOM, as does Formula One Administration (G-OFOA).
[edit] Origin
In 1974 the Formula One Constructors Association, or FOCA, was founded in order to increase commercial organisation of Formula One for the benefit of the racing teams. In 1978 Bernie Ecclestone became the executive of FOCA and fought the Fédération Internationale du Sport Automobile or FISA for control of F1 commercial rights.Disputes were settled by March 1981 when the Concorde Agreement gave FOCA the right to negotiate TV contracts. Under previous arrangements, TV contracts were not very lucrative and were risky. When the Concorde Agreement ended in 1987, Bernie Ecclestone ceased being a team owner and established the Formula One Promotions and Administration, or FOPA, to manage TV rights for the teams. FOPA would later become known as Formula One Management. FOPA received 23% of TV revenues, 47% went to the teams, and 30% to the FIA. FOPA, however, received all the fees paid by promoters. In exchange for this FOPA paid prize money to the teams.
[edit] Past
In 1995 the FIA decided to grant the commercial rights to F1 to Formula One Administration (managed by FOM) for a 14 year period. In exchange, Ecclestone would provide an annual payment. With FOM having exclusive rights to popular team names like Team McLaren, WilliamsF1, and Tyrell Formula One, the aforementioned teams protested by rejecting the following Concorde Agreement in 1997. Team McLaren, WilliamsF1, Scuderia Ferrari and Renault F1 formed GPWC Holdings and threaten to form a rival racing franchise in 2008 when their current contract ends in 2007. In 1999 financial assistance to FOM was cancelled in light of a European Commission investigation. Ecclestone issued a $1.4 billion Eurobond secured on the company's future profits.
As Formula One has increased its international appeal over the years, many corporations have come to rely on Formula One for global marketing, rivaled only by the Football World Cup and the Olympics. In early 2004 FOM provided the British Racing Drivers' Club $20 million, or a third, of funding for venue improvements to secure the British Grand Prix until at least 2015.
[edit] Control
By the end of 2000 the Ecclestone Family stake in Formula One Holdings was reduced to 25% stake. Bernie Ecclestone, however, would still retain firm control of FOM.
Three banks (Bayerische Landesbank, Lehman Brothers and JP Morgan Chase) owned 75% of SLEC Holdings, which nominally controls Formula One Holdings and hence FOM. The banks' shareholdings are a legacy of the collapse of the Kirch Media company. Kirch spent heavily on both Formula One and World Cup rights with the aim of generating a large income stream, however the expenditure lead to bankruptcy. The banks, acting as creditors, took control of Kirch's share of SLEC Holdings as a way of recouping some of the money that was owed to them. However this control has not been translated into a similar control of Formula One Holdings or its operating companies; in particular Formula One Management, which is responsible for the day to day running of the commercial side of Formula One.
Due to the lack of control the shareholdings gave the three banks they (as Speed Investments) brought a case in the High Court of England and Wales in which FOH was named as the defendant. The case will be heard in London's High Court 59 to determine whether Bernie Ecclestone maintains control of F1 and its hundreds of millions of dollars in annual revenues for well over 20 years. If the outcome is unfavourable to Ecclestone, his management status will steadily be relinquished to the trio of banks and a group of carmakers dissatisfied with his methods of management.
[edit] See also
[edit] External links
- Formula1.com — Official site; schedules, statistics, complete race results since 1950, live timing during each race, and some news
- GrandPrix.com — GrandPrix.com encyclopædia entry for Bernie Ecclestone
- FT.com — Financial Times: The case that will decide Formula One’s future
