Goodbye to F1’s Ringmaster
The end of Bernie Ecclestone’s reign as boss of Formula One is no less significant simply because it was anticipated. Since the Liberty Media takeover of the sport was outlined last September it was clear that Bernie’s time in F1 was accelerating towards the finish line. Now that this seismic change has occurred, many will not only reflect on his commercial governance of Grand Prix motor racing, but wonder what the future will hold under owners eager to grow it even further.
It is not hard to guess the narrative of the career-obituaries which will be written in the coming days. How the son-of-a-trawlerman from Kent built a successful car and motor cycle business, dabbled in racing before getting involved in driver management, bought the Brabham Formula One team and ultimately took over the commercial running of the World Championship in the mid-1970’s. Simply put he created the business model which saw revenues flood in from circuits, television companies and sponsors.
In so doing he made himself, and the owners of the top teams, very wealthy indeed. These days he is often blamed by observers for the parlous state of Formula One’s smaller teams and the uncertainty over traditional race venues. Meanwhile he has focused on the bigger picture for F1 as a business, working a solution to the 2005 EU ban on multi-billion dollar tobacco sponsorships. A loss of revenue, incidentally, from which most of the teams have never fully recovered.
Following FIFA and the IOC, he has sold Formula One to countries and city-states since the late 1990’s, creating a cash-cow from which the teams have benefitted to the tune of around USD$800m a year. The globalisation of Formula One has taken it far beyond its European heartlands to countries including Malaysia, Singapore, Bahrain, Abu Dhabi, India, China, Russia and Azerbaijan. It did not go down well with the media, fans and some teams that he sold F1 in 2005 by means of a debt-funded buy out to private equity firm CVC Capital Partners, but as CEO he sought to keep the business stable and shareholders happy with sustained profitability and substantial dividends.
I first met Bernie properly when he invited me to dinner at the 1991 Brazilian Grand Prix. During an enjoyable and fascinating 3 hours he explained that Formula One should ideally have 10 teams, each owned by a car manufacturer. More than 10, he said, was unsustainable. This came as a shock, since there were 18 teams that year.
He believed that anyone wanting to enter Formula One should have relevant experience, attract their own sponsorship, possess the shareholder funding to sustain their development, and race to win. Twenty five years later it is not hard to understand why he has had little time for the minnows who have neither the management expertise, commercial nouse nor technical strength necessary to add value to ‘the show’. To be blunt, why should he hand over tens of millions of dollars to the here-today, gone-tomorrow, dreamers?
And yet, in 2009, he not only worked with FIA President Max Mosley to bring in three new privately owned teams in the wake of a skittish withdrawal from F1 by Honda, Toyota and BMW, but privately funded the development of the customer Cosworth V8 engines which fresh entrants could lease for a mere £5m per season. He ultimately gifted these teams payments of USD$10m a year for just turning up, even though none of them had a viable business plan.
In September 2010 one of the new teams owed Cosworth a substantial engine payment. On the Friday morning of Monza, the relevant team boss proffered me a hand written Eurocheque for the sum owing. This wasn’t worth the paper it was written on, being the kind of cheque that takes several weeks to clear during which time it can be cancelled. I refused it and told the team principal this meant the withdrawal of our engines. Pausing, we walked down to Bernie’s motor home and emerged, ten minutes later, with a solution. Bernie would redirect one of his team payments to Cosworth, thus clearing the debt and enabling me to release the engines for use.
This was how Bernie worked, and it worked for Formula One for a long time. Jordan Grand Prix would never have survived was it not for a one-off payment from Bernie that Eddie Jordan was later able to repay when the cash flow improved. On another occasion an attempted team revolt against Bernie failed when the January TV-revenue payment failed to turn up. EJ called him and was told, if you want the TV money you’d better stop messing about with the politics. Eddie ended the politics, and we got paid.
In 2005 I took two senior film executives to see Bernie in order to secure the rights to launch Disney Pixar’s movie CARS at the Spanish Grand Prix. We tried to think of every question he could possibly ask us in the meeting, but ‘What is Walt Disney?’ was not one of them. It was brilliant, pure Bernie. He always enjoyed unsettling the other party in a negotiation. In 25 minutes we had a deal, however, and with a smile he said there would be no problem unless Disney Pixar used the F1 logo or name in which case ‘you’ll be hearing from my lawyer’. CARS had the benefit of having its European launch at a Grand Prix, and Bernie had 250 star-struck movie media turn up along with lead man Owen Wilson.
Bernie loves being contrary when questioned. In this regard I would say that most of the media, most of the time, never understood him. The unexpected answers, shocking quotes, politically incorrect statements and terse one-liners; all were calculated to amuse Bernie, frustrate his interrogators and feed the headline-generating machine. Of course some of it was ill advised – not that he listened to much advice – but when your day-to-day work is striking complex deals at government level for tens and hundreds of millions of dollars, most journalistic questioning is nothing but a source of amusement.
In 1998 I accompanied Damon Hill into the paddock of the Canadian Grand Prix and was surprised to find a couple, wearing Jordan team merchandise and caps, waiting for us. They had full paddock passes around their neck and, when we stopped to talk to them, the lady concerned explained that she had simply written to Bernie and told him that she wanted to give her husband a truly memorable birthday present by taking him to Montreal. Bernie replied, organised the passes and gave them unrestricted access for the weekend.
You won’t read many stories like that in the days ahead, probably because Bernie never liked anyone to undermine his hard-man image. Witness his decision to grant a photograph of his severely bruised face to be used in an advertisement for Hublot watches shortly after he was mugged in London at the age of 80. The strapline? ‘See what people will do for a Hublot?’
He was not averse to using strong-arm tactics. He used divide-and-conquer so often it is a marvel that so few teams, promoters or TV executives ever saw it coming. He had the benefit of experience, knowing that he only had to rely on the greed of others to split the most unified consortium. Some will celebrate the end of his tenure, most especially those whom he has outsmarted and outgunned during his four decades in control of Formula One. He is irreplaceable, both because it is undesirable and unachievable. The sport will enter a new era, led by a group of talented executives with big ambitions for the future. Who knows what Bernie might still do within the sport, even if on the fringes of it, but one thing is for sure. There will never be his like again.