Bernie Ecclestone, the Rumpelstiltskin lookalike who has spun gold for himself and Formula One with prodigious success, has been written off many times – and it is happening again with the news the sport could be bought by Liberty Media within a matter of days.
Some thought Ecclestone would not survive the bribery court case in Munich two years ago, which ended with Ecclestone paying £60m and the charges against him not proceeded with in the court. Others speculated the F1 CEO had lost his power for good when he stepped down as a director of the sport’s holding company, Delta Topco Limited, earlier in 2014. Yet Ecclestone, who has ruled F1 for 40 years, has a remarkable capacity for toughing things out and that is unlikely to desert him now.
He is likely to be involved for the immediate future should the deal with Liberty Media go through. In fact it would be foolhardy to dispense with his services straight away – and it would be about as complicated as the Brexit negotiations. Ecclestone, who prefers to work alone, has so many deals rattling around inside his head that the probability is Liberty Media would retain his services, at least in the short term. And as he will be 86 next month, this is hardly a long-term issue.
For a while Ecclestone may find himself working with Chase Carey, the executive vice-chairman of 21st Century Fox and a former business partner of John Malone, who is the largest landowner in the US and the chairman of Liberty Media. While Malone would be the new big man in Formula One, Carey, a graduate of Colgate University in New York state and Harvard Business School, could take over the running of the sport on a day-to-day basis and one day replace Ecclestone as the most familiar face in the paddock. He has been one of Rupert Murdoch’s key advisers.
But for the moment Ecclestone plans to go nowhere and he retains a stake of almost 15% in the business – he holds 5.3% of Formula One and his Bambino Trust has another 8.5%. The biggest shareholders are the private equity firm CVC Capital Partners, with a 35.5% stake and who are ready to sell after 10 years in the chair, and the US fund manager Waddell & Reed, with 20.9%.
The deal with Liberty Media is not certain to go ahead, for CVC are still thought to be in negotiations with RSE Ventures, which is run by the owner of the Miami Dolphins, Stephen Ross. But most people in the know believe a deal is on.
News that CVC are ready to sell was met with enthusiasm in the paddock. CVC’s co-owner Donald Mackenzie may have become a fan of F1 but the sport is no lover of CVC, who are perceived to have made a great deal of money from their involvement without putting very much back.
Three years ago in Monaco, the deputy team principal at Force India, Bob Fernley, launched a bitter attack on CVC, and even accused them of “raping the sport”. He added: “They are the worst thing that has ever happened to Formula One. They have done nothing for the sport.” In 2006 CVC bought a majority stake in F1 for around $1.2bn. Since then they have made an estimated £4bn from the sport.
Of the potential takeover, Christian Horner, Red Bull’s team principal, said: “It could be a really exciting deal for Formula One if it happens … but for a new group to come in without [Ecclestone] being there would be very difficult, so I’d assume he’ll be around for some time.”
Toto Wolff, the head of motorsport at Mercedes, added: “If there is an investor that wants to buy the shares it is good news for Formula One. It is good news that an American media company buys Formula One.”
Americans, as F1 has already seen in Austin, know how to put on a show. They would be likely to put more investment into a sport where more than half the teams are suffering genuine financial hardship. It is very difficult to survive in F1, let alone thrive.
The sport is already set for technical changes next year, with wider tyres and faster cars in an attempt to brighten up the product in the wake of declining crowd figures and falling TV audiences. That will not be helped by the decision to sell exclusive TV rights to Sky, meaning it will be off terrestrial TV in a couple of years.
But changes on the track will be nothing compared with a takeover, which would mean a complete shake-up of how things are done. This could be great news for F1 and its estimated 40 million fanbase. For now at least, it may not mean the end of Mr E, the inimitable Bernie Ecclestone.
