Mosley explains TV rights sale
28 May 2001 – In a Press Conference at Monaco FIA President Max Mosley explained the situation with television broadcast rights and SLEC.
"I want to tell you about the commercial deal that has been done between the FIA on one side and SLEC, which in effect is the Kirch Group and the Ecclestone family trust, on the other. The agreement was concluded on April 24, to take effect for 100 years starting on January 1, 2011."
"What this means is that we have transferred all the FIA's commercial interest in the Formula 1 World Championship to SLEC. In return, we were paid $313.6 million. The way in which that figure was calculated is a long and complicated story, and we are now in the process of deciding what to do with that money. The FIA's plan is to put almost all of it into a charitable foundation which will then have the resources to undertake important work on improving safety in motorsport and in road safety generally, on a charitable basis. I am expecting this to be quite significant."
With regard to the sum of money paid for the rights Mosley said, "There are several factors involved here. First of all, we have to be very careful when placing a financial value on any sporting rights. In the light of a recent financial failure in this field, I hardly need say more on this subject. I would also point out that the $314 million which the FIA recently accepted represents the equivalent of at least $500 million when those rights actually start on January 1, 2011. If you calculate what those rights are worth per year, on a discounted basis, you will find that the $314 million is a substantial amount. Over the totality of the contract, and on an annual basis, the sum we have accepted represents billions of dollars. Looked at from that point of view, it is a huge amount of money."
"There is something else I would like to add here - and this is something that I can say more openly now than ever I could have done in the past - about the enormously complex background to this issue. For example, nobody knows with any certainty who has what rights in the various parts of the championship. What proportion of the rights belongs to the teams who have invested in the cars and drivers? How much can be attributed to Bernie Ecclestone or his companies to reward him for his foresight in making Formula One such a valuable business? How much belongs to the FIA as the originator and proprietor of the World Championship? If there were to have been a dispute involving these issue, the FIA might conceivably be faced with a ruling that it is not entitled to claim as great a proportion of these rights for itself as previously it believed it owned. We have therefore followed the principle that a bird in the hand is worth two birds in the bush."
"We are therefore very satisfied with the amount of money that we have been paid for these rights. Furthermore, we are delighted to be able to put this money to work immediately instead of having to wait another ten years or so. It means we are going to be able to initiate many more schemes, like the helmet project I just described, which will benefit the sport - and road users generally - in terms of safety."