This article written by John Griffiths was published in The Financial Times on 14 May 2003.

Ferrari chairman Luca di Montezemolo has set a December 31 deadline for Formula One promoter Bernie Ecclestone, three investment banks and the carmakers to agree on the future ownership and financial structure of F1.

If no deal is reached, F1's big carmakers will commit themselves to launching the rival championship they have begun preparing, which is due to start in 2008 after current contracts expire, Mr di Montezemolo said.

The carmakers - Ferrari, Renault, DaimlerChrysler, Ford and BMW - set up the Grand Prix World Championship (GPWC) company more than a year ago to launch the rival competition. This followed Mr Ecclestone's sale of 75 per cent of SLEC, F1's commercial rights holder, to German media groups that have since collapsed and whose stakes are held by three creditor banks.

Mr di Montezemolo said: "We [the manufacturers] would like a solution with Mr Ecclestone and the banks. If not, it will be bad, but it won't be a tragedy." He added: "While Bernie Ecclestone was the owner, everyone accepted most of the arrangements . . . But things have changed. The carmakers have a bigger presence, and the cost of racing becomes bigger and bigger.

"In no other sport are the teams deprived of a share of two of the three main revenue streams - trackside advertising and ticket sales - while having to share just 47 per cent of the gross income from TV rights."

Mr di Montezemolo said the three creditor banks - Bayerische Landesbank, Lehman Brothers and JP Morgan - "know nothing about F1. How can we accept that?" He warned that either the banks and Mr Ecclestone, whose Bambino family trust retains the remaining 25 per cent of SLEC, agreed to share more of F1's spoils or the value of their holdings in F1 would shrink to zero as the GPWC championship took off. "The simple truth is that without the carmakers they cannot make a championship."

The GPWC has offered the prospect of doubling the teams' income within the first five years of the rival championship starting. Mr Ecclestone is believed to be preparing a counter-offer, which could involve the teams receiving a larger share of total revenues in exchange for a commitment to stay with F1 until at least 2015.

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