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It is no big secret that Formula One is planning to float on the Singapore stock exchange this year and there are few obstacles in its way. The biggest is probably the health of the economy and resistance from the Mercedes F1 team doesn't seem to be on the list.
Mercedes is the only F1 team with any standing not to have agreed to sign the new Concorde Agreement, the contract at the heart of F1. The team is reportedly annoyed that its rivals, Ferrari, McLaren and Red Bull Racing, will get seats on the board of F1's parent company Delta Topco and will benefit from updated terms in the new Concorde Agreement. It has been claimed that Mercedes could up-skittle the flotation by complaining to the European Commission (EC) that the new Concorde Agreement is anti-competitive. This kind of challenge would indeed put the brakes on the flotation if it was serious since it could lead to F1 being investigated and the outcome would be unknown. However, as Pitpass recently reported, several senior sports lawyers have claimed that if Mercedes made a complaint it is "unlikely to be successful."
Formula One boss Bernie Ecclestone recently said that he very much doubts that Mercedes will leave F1 so does this mean that it is going to put up with the terms or will they be changed to tempt the team? Under the updated terms in the new Concorde Agreement Mercedes is ineligible from receiving additional payments and there seems to be little that can be done about that.
The teams currently share around 50% of F1's underlying profits with Ferrari getting a separate fee in recognition of its historic status. However, under the new Concorde, additional payments will go to any team which has competed since 2000 without making a change to its name with further payments rewarding past constructors' championship winners and back-to-back champions. Mercedes is ruled out from this because its team has changed its name several times since 2000.
Indeed, Mercedes has changed its name so many times in recent years that one sports reporter recently struggled to keep up with it and claimed that the team "became British American Racing in 1998, Honda GP in 2009, Brawn GP in 2010 and Mercedes GP at the end of the same year."Of course, the team was not racing as Brawn GP in 2010 and, contrary to the reporter's protestations after his piece was published. This (pdf) is when it officially changed its name to Mercedes-Benz Grand Prix. Nevertheless, if reporters can't get its name from just a few years ago correct it has clearly changed too many times. Bearing this in mind, it is easy to see why Ecclestone isn't likely to give ground on these terms in order to meet Mercedes half way.
However, giving ground on the board seat is simpler to do. At lunch with Ecclestone, Pitpass' business editor Christian Sylt asked the F1 boss how his negotiations with Mercedes were going. "Mercedes will sign up to the new Concorde. That will be all right," says Ecclestone. Whereas there had previously been no suggestion that a representative of the German car manufacturer would become a director of F1, Ecclestone now says "we will have to see if Mercedes get a seat on the board. I had a meeting about it with Dieter Zetsche [chairman of Mercedes' owner Daimler] at the weekend in Barcelona. He was OK about it but he has got to put everything through his board, all the things we discussed."
It remains to be seen whether Mercedes will actually get the board seat as it will add to the growing number of directors of F1. Ecclestone will have plenty of support from Ferrari chairman Luca di Montezemolo, who will represent the Italian team, and Red Bull boss Dietrich Mateschitz who will take the seat on behalf of his team. The McLaren seat is likely to go to its executive chairman Ron Dennis or the Crown Prince of Bahrain since the country's Mumtalakat wealth fund owns 50% of the team. However, whereas Dennis is an old nemesis of Ecclestone, the Crown Prince is one of his most staunch allies so he would give support under the sport's new structure which will see a whopping 16 other directors join the F1 boss on its board when it floats.
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