German media giant Kirch Gruppe has amassed a 58.3% controlling stake in SLEC, the holding company of Formula One motor racing's broadcast rights, after acquiring a further 20% from EM.TV Merchandising.
Kirch exercised an option to convert a $1.7 billion loan to EM.TV into SLEC shares, which have been added to those already in Speed, the holding company for Kirch’s F1 shares. EM.TV, keen to focus on children’s TV broadcasting rights after narrowly avoiding bankruptcy earlier this year, now holds only a 16.7% stake in F1, with the remaining 25% owned by Bernie Ecclestone.
Kirch is already a major player in sports broadcasting, holding TV rights to the 2002 and 2006 soccer World Cups. However, unlike its soccer interests, Kirch will become F1’s promoter, taking charge of its marketing.
The acquisition of a majority stake in F1 increases the likelihood Kirch will try to shift coverage of the sport onto its loss-making pay-TV platform. However, any attempt to do so will be bitterly opposed by car manufacturers, eager to keep F1 audiences (and therefore sponsorship) high. Earlier this year, a group of auto giants threatened to break away from F1 in a stand-off with Kirch [WAMN: 05-Apr-01].
News sources: Handelsblatt (Germany); MediaGuardian.co.uk