Bernie Ecclestone is a pint-sized potentate who amassed an enormous fortune after he talked the Formula One teams into handing over their birthright to him 40 years ago. Since then, Ecclestone has exercised total dominion over all the commercial rights associated with the sport — sanctioning fees from race promoters, income from sponsors, payments from television networks, and licensing fees from the sale of hats, jackets, and other mementos.
The arrangement was supposed to free the teams to concentrate on building race cars while Mr. E, as he is known to his friends (both of them), took care of the business side of things. This semi-symbiotic relationship has been very good for Ecclestone, who at age 85 is now one of the world’s wealthiest men. Meanwhile, the sport’s top teams have been busy helping new teams get started in what is known as the pinnacle of motorsport much as sharks help minnows learn about life in the ocean. In other words, they hogged all the money for themselves and left the smaller teams to fight over the leavings.
In a flurry of financial machinations worthy of the best Wall Street wizards , Ecclestone has put the commercial interests of the sport through an array of transactions designed to keep the sport afloat — and maximize his personal gain. At present, the commercial rights are owned by Delta Topco, a Jersey–based company which in turn is owned by CVC Capital Partners, Waddell & Reed, and LBI Group. Ecclestone continues to run things, though, as a service to the investors.
Today, the sport of Formula One is valued at $8 billion. Ecclestone said in an enigmatic statement in October, “Our shareholders are in a position at the moment where they have to lose some, or all, of their shares shortly.” He offered no explanation for why that would be the case. or why anyone would want to spend $8 billion on a sport that is riven by internal strife and dissension.
Bernie followed that up a few days ago by announcing that Formula One will likely be sold before the next racing season begins in March, 2106 according to GrandPrix.com. “I think they (CVC) will make up their mind in the next few months. I hope that before the start of the 2016 championship in March, we will have decided if we sell — or not.”
Interested parties in Formula One include Miami Dolphins owner Stephen Ross, Sky — Qatar’s sports investment arm, international telecommunications company Liberty, the billionaire father of Williams test driver Lance Stroll, Red Bull TAG team owner Dietrich Mateschitz, CVC’s Donald Mackenzie or even Ecclestone himself. Ecclestone says, “There are probably only four people who could buy it. Only they have the amount of money.” As for whether he will be retained as CEO, Ecclestone added: “That’s a question that only the owner can really decide.”
Fan interest has fallen alarmingly in recent years. That’s largely because Ecclestone, who may have been borne during the reign of Queen Victoria, sees no need for streaming coverage of the racing across multiple digital platforms. He is so stuck in his ways, he forced the organizers of a race in Singapore to install $6 million worth of lights so the cars could race at night while he and his cronies were enjoying luncheon back in Jolly Olde England. The fact that nighttime racing proved to be highly popular with the teams and with fans is merely incidental.
Financiers care not one whit about racing. All they care about are quarterly dividends. New owners will ratchet up all the fees they can to help maximize their profits, much as new landlords always boost everyone’s rent. Will the future of Formula One be better under new owners? Let us know what you think in the comments, below.