The threat of a breakaway grand prix series to rival Formula One appears to have lessened overnight, as manufacturers' consortium GPWC and F1 rights holder SLEC reached a breakthrough in their discussions on the future of the sport.

A meeting between the two principal parties - representatives of GPWC and SLEC shareholders - broke up after both sides agreed on the preparation of a Memorandum of Understanding before the end of the year, which would basically allow GPWC to acquire a majority stake in the sport's commercial rights.

The meeting was attended by all GPWC directors, representing F1's major players - BMW, DaimlerChrysler, Ferrari, Ford, Renault - while SLEC was represented its shareholders, comprising the three German financial institutions that landed the 75 per cent stake in the sport from Leo Kirch's ailing media empire - Bayerische Landesbank, JP Morgan and Lehman Brothers - and Bambino Holdings, the family trust run by the Ecclestone family. Bernie Ecclestone, as CEO of F1 organiser the FOA, also participated in the meeting.

"We are very happy that today we reached a breakthrough in our negotiations about the future of Formula One," read a statement jointly issued by Ecclestone, Dr Gerhard Gribkowsky, representing the shareholders, Prof J?rgen Hubbert, as chairman of GPWC, "The outcome is in the best interests of Formula One and the millions of its fans around the world."

Although few details of the proposed Memorandum have been made public, it is expected that the document will make provision for the five car manufacturers to acquire the 75 per cent stake in SLEC currently held by the banks, while Ecclestone, via Bambino Holdings, retains the 25 per cent remainder that it currently holds. The deal almost certainly rules out the threat of a rival series, which would have been set up in time to coincide with the end of the current Concorde Agreement in 2008.

The future of the sport will now see the five carmakers enjoying the greater share of Formula One's revenues that they have craved since it was revealed that the majority of income generated by F1 did not go to the participating teams, while also having more control over where the sport is shown on television, having previously admitted fears that coverage on 'pay-per-view' would limit their exposure. Ecclestone, however, retains a 100-year deal on the commercial rights, agreed with the FIA after an EU investigation into a possible monopoly situation in the sport.

The new agreement is thought to value the majority share at far less than the ?1billion paid for it over time by the Kirch empire.

 

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