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APRIL 2, 2001

Kirch to name Thoma to SLEC board

THE Kirch Group will shortly announce the appointment of Walter Thoma to the board of SLEC, the trust fund which controls the commercial rights to Formula 1 racing. This is a very significant appointment as Thoma was a non-executive director of Formula One Holdings when Ecclestone was trying to float the company in 1998. In 1999 he was named by Bernie Ecclestone as one of the three men who he wanted to have in control of F1 when he retires. Thoma, a former head of Philip Morris Europe, has strong links with the F1 circus through Marlboro sponsorship although he has been retired from Philip Morris for a couple of years. Thoma will be one of Kirch's six representatives on the SLEC board.

Another of the SLEC nominees will be Frenchman Etienne de Villiers, former managing director of Disney in Europe. This is an interesting appointment given that Disney wants to buy The Muppet show from EM.TV and a deal may be possible involving the sale of The Muppets to Disney in exchange for TV contracts around the world.

Dieter Hahn, Kirch's managing director and the man who put together the rescue package for EM.TV is also on the new board of SLEC.

The complex deal for the SLEC purchase was necessary for the takeover to be accepted by the German competition authorities. Kirch paid EM.TV $586m for a 49% share in a company called Speed Investment Ltd. This organization has also bought an extra 25% of SLEC from the Bambino Trust, another Ecclestone Family company, for $987.5m.

This means that the Ecclestone Family trusts now control only 25% of SLEC with Speed Investment controlling 75%. In effect this that Kirch controls 36.75% of SLEC with EM.TV controlling 38.25%. However as Kirch effectively controls EM.TV he actually has control of Speed Investment.

It remains to be seen what will happen next accommodate the car manufacturers who want more involvement in F1. One option may be for Speed Investments to do a reverse takeover of EM.TV and by doing so become listed on the stock exchange in Frankfurt. Shares would then be available for car companies and the general public to buy.

The FIA will shortly disappear from the equation in all but name. The partners in SLEC have agreed to pay $350m to the FIA in exchange for the commercial rights to F1 until the year 2110. The FIA will use the money to establish a foundation to fund research and education programs.