Monday February 14th, 2000

The European Commission shrugged off a threat today that Formula One motor racing could leave Europe if the European Union demands changes to the organisation and commercial agreements governing the sport. "They have already levelled so many accusations and threats, this is just another one," Commission spokesman Michael Tscherny said.

A report in Monday's Financial Times said the chief executive of Silverstone Circuits, which hosts the British Grand Prix, had said that a Commission move to force Formula One to renegotiate broadcasting rights could drive it away.

"There is no fundamental reason why all the grands prix could not be held outside the EU," Denys Rohan told the newspaper.

The EU's anti-trust watchdog last June formally objected to the rules of the FIA motor race governing body and the commercial rights owned by the Formula One Administration company of Bernie Ecclestone, especially in broadcasting.

Its probes, which followed notification of the FIA rules in 1994 and a formal complaint in 1997, have caused plans for a flotation of the Formula One company to be put on ice.

British newspapers said on Monday that Deutsche Bank subsidiary Morgan Grenfell turned down an option to acquire a 50 percent stake in the Formula One company also blaming the dust-up over broadcasting rights for this.

Last October Morgan Grenfell said it had agreed to buy 12.5 percent of Formula One for about $325 million and would bring in other investors to take the holding to 50 percent.

There is no deadline for the Commission to conclude its investigations, but it will hold a hearing at the beginning of April, Tscherny said.

The FIA dismissed the EU probe earlier this month as "lamentable", expressing confidence it will ultimately win the dispute and challenging EU regulators to hold a public, not closed-door, hearing for the sake of transparency.

Tscherny said the Commission had nothing against allowing the press into the meeting, but noted it would need to ask other participants whether they agreed.

Hearings give companies under investigation the opportunity to confront detractors and to put their case directly to antitrust experts from the EU and national capitals.