A German bank is suing F1 CEO Bernie Ecclestone and his family trust fund for €345M ($422M) “over the sale of its stake in Formula One,” according to Lizzie Dearden of the London INDEPENDENT. BayernLB, a state bank based in Munich, announced the move on Friday after rejecting a €25M ($31M) settlement offered by the billionaire magnate in August. A bribery case against the 84-year-old was dropped earlier this year. He had been “charged with making a £27 million bribe” to former BayernLB Senior Exec Gerhard Gribkowsky. BayernLB is “continuing to argue that it would have been able to negotiate a higher sale price” if Gribkowsky, who was imprisoned for corruption, had not taken the payment (INDEPENDENT, 12/20).
BLOOMBERG’s Gerlin, Matussek and Suess reported Ecclestone filed a separate lawsuit against the lender in London on Dec. 16, according to court records. The dueling lawsuits “may be bids by Ecclestone and BayernLB to establish jurisdiction over the dispute” in their home countries. Previous talks to settle the matter “haven’t led to an agreement.” Ecclestone was not able to comment on the suit. A spokesperson for Herbert Smith Freehills LLP, “a London law firm that represented him in a previous U.K. lawsuit over the sale brought by Constantin Medien AG,” declined to comment (BLOOMBERG, 12/19).
CAUSE FOR CONCERN: FORBES’ Mike Ozanian wrote how much longer can F1 “keep its balance sheet from crashing while its chief executive and marketing mastermind is embroiled in huge lawsuits?” Ecclestone is “key to driving the sport’s revenue.” F1 is “hugely profitable with some speculating that an IPO” would value the racing circuit at $12B. This year it is estimated that F1 will generate about $460M in operating income. Uncertainty over Ecclestone’s future prompted Moody’s Investors Service to issue a warning about F1’s future credit rating. Moody's: “Given Mr. Ecclestone’s pivotal role in creating the F1 franchise, Moody’s believes that any discontinuation of his participation in negotiations and key strategic decisions may have the potential to cause disruptions in the relationships between the F1 racing teams, F1 and the FIA--the governing motorsport body” (FORBES, 12/19).
