BUDAPEST (Reuters) - Formula One moved closer to a new seven-year commercial agreement, seen as key to any future flotation, on Saturday after rights holders and the governing FIA said they had signed a preliminary document setting out the final steps.
“The Formula One Group and the FIA have signed an agreement setting out the framework for implementation of the 2013 Concorde Agreement,” a joint statement said at the Hungarian Grand Prix.
“This agreement will come into force upon approval by the respective governing bodies with the signatory parties in the coming weeks.”
The confidential ‘Concorde Agreement’, which expired at the end of last year, sets out the commercial side of the highly lucrative sport including the distribution of revenues.
It must be agreed by the rights holder, governing body and teams - 11 of them at present - and negotiations have encountered numerous stumbling blocks over the past year.
Bernie Ecclestone, the 82-year-old British billionaire who is commonly referred to as the sport’s ‘supremo’ and runs Formula One for CVC, has talked of a listing in Singapore towards the end of this year.
“There have obviously been lots of things we’ve had to sort out,” Ecclestone, who has bilateral agreements in place with 10 teams pending the signing of a new Concorde, said of the breakthrough in talks.
“This forms most of the Concorde Agreement for the teams as well, so we can get the whole lot put to bed now.”
Private equity firm CVC owns 35.5 percent of Formula One with U.S. investment groups BlackRock and Waddell & Reed, as well as Norway’s Norges Bank Investment Management also buying into the business.
The owners of Formula One, which had revenues of $1.5 billion in 2011, have the commercial rights to the sport for the next 97 years under a deal agreed between Ecclestone and former FIA president Max Mosley.
The lack of a new Concorde Agreement has hung over the IPO, which has already been postponed from last year due to market conditions, as well as the sport.
Ecclestone said much of the delay in signing had been down to lawyers and language, with the governing International Automobile Federation being based in Paris.
“It’s good. We’re with the FIA, and that’s it,” he said of Saturday’s announcement.
“It’s for seven years, and what it does is give a little more input from the teams which we’ve been fighting for concerning regulations, so they can’t complain.”
Ecclestone’s own future at the helm of a business he has run for decades remains uncertain, with the Briton charged in Germany with bribing a banker to smooth the sale of a stake in Formula One to CVC eight years ago.
He has denied wrongdoing and has said he will fight to clear his name.
That case could also delay the float if a judge decides to take the matter to trial, with a decision not expected before mid-September.
Ecclestone told Reuters in Budapest however that he did not feel his position needed to be resolved before any flotation could proceed.
“I don’t think so. Germany’s got nothing to do with the IPO, they don’t have any shares or anything,” he said.
Reporting by Alan Baldwin, editing by Amlan Chakraborty