If you think Bernie Ecclestone is sitting pretty, legs up on his yacht with the finest of champagnes and relaxing in his new-found retirement, then I think you’ll be surprised when I say that he’s possibly setting himself up for a quiet takeover of the sport.
It is hard to think that the Grand Master of wheeling and dealing, and the “father” of modern Formula One who worked his ass off to make the sport into a multi-billion dollar industry, is retiring at all.
Succumbing to retirement in your late 80s usually means a fast track to ultimate retirement. You know, the one that you never wake up from. And as we all know, it has been the business of running the world’s fastest sport that has kept the octogenarian alive and kicking.
But there is evidence that shows that Bernie isn’t exactly fully out of F1, and maybe working on a coup to get F1 back.
In the early 1990s, Australia’s then richest man- Kerry Packer- had a famous saying: “You only get one Alan Bond in your lifetime, and I’ve had mine.” The story behind this quote was that Alan Bond- the Australian businessman who was behind the nation’s historic America’s Cup win in 1983- was in a spending spree during the late ‘80s with new found wealth from what would later transpire to be from scandalous dealings, and later jailed, and during this time was hungry to own Australia’s biggest TV channel: Channel 9.
Kerry was reluctant to sell this major family asset that his father- Sir Frank Packer- had founded in the early 1950s. But upon further investigation into Bond during negotiations, Kerry could foresee the extravagant and dodgy businessman’s future. So he sold Channel 9 to Bond for $1 billion dollars.
To cut a long story short, sure enough within two years Alan Bond went bankrupt and Kerry Packer scooped up Channel 9 for a mere $250 million. A swan song and one of the nation’s most cunning business deals.
Bernie has already had one “major” Alan Bond in his lifetime. Remember when the German media company EM.TV purchased a 50% stake in F1 for $1.65 billion, which was later taken over by company Kirch- due to EM.TV’s bankruptcy- who purchased a further 25% stake from Bernie at $1 billion. Then when Kirch went bust CVC and Bernie scooped F1 back for a lot less.
But does Bernie have another potential “Alan Bond” in the making, with Liberty Media?
Let’s look at some of the evidence that Bernie is working his magic behind the scenes to position himself for another bargain bin purchase of his baby: Formula One.
Since Bernie’s redundancy at the start of 2017 we’ve seen the Malaysian Grand Prix get out of their F1 contract a year early, Silverstone now pulling out of their contract, the Singapore Grand Prix uncertain of contract renewal, and a few legendary F1 circuits from yonder- such as Imola, Magny-Cours and India- pop their heads up offering to purchase rights at an amount a lot less than the fees they use to pay, which caused them to stop hosting F1 in the first place.
Speaking to a few race promoters in Asia and Europe recently, it seems to be that Bernie isn’t fully out of Formula One and is actually trying to devalue the sport in order to hurt Liberty and force them to sell back to the Grand Master at a discount price.
Not wanting to be named in this article, I have it from a good source that Bernie is now going back to circuit owners and highlighting a loophole in the contracts- that he sold to them in the first place- that allows circuits to either get out early, or pay a lot less than they should.
Is Bernie now becoming best friends with the same circuits and promoters he spent decades over-charging? Why would he be doing this?
Liberty Media purchased Formula One using debt. Without knowing the exact terms of their purchasing contract, this means that they are under strict clauses to repay this debt within a specified time frame, and failing to do so could force them to sell their F1 asset at a very low price to cover their debt repayments.
Liberty’s purchase of F1, like any business that is bought and sold, was based on making the same amount of money CVC and Bernie have been making the past decades, with the potential of making a hell-of-a-lot more if they can turn the sport around and increase the fanbase, spectacle and viewership.
Now if circuits start to pull out of their contracts early or demand to pay lower fees, then this will affectively cause a drop in revenue for Liberty, which will in turn have a negative effect on their ability to repay their debt.
This would surely help Bernie to make an offer to take the devalued F1 asset off Liberty’s hands at a much discounted rate.
And let’s not forget that the current Concorde Agreement- another Bernie designed and implemented contract- runs until December 2020, at which point the FIA and competing teams will have more negotiating power and will be looking for the best financial and governing deal on offer.
Sure Liberty are doing an impressive job turning Formula One around for the better in such short time that they’ve been in control, with the increased production and distribution of F1 videos on social media, and the amazing London Live demo run on Wednesday. And with their experience of making American sports such as Baseball and NFL into the spectacles they are, Liberty definitely know what they’re doing.
But as the saying goes: “Keep your friends close, but your enemies closer.” Bernie still has all the valuable assets in his pocket. The relationships with circuits and promoters, and his relationships with the teams who are forever in Bernie’s debt. Is Liberty being too naïve letting Bernie off the leash?
Even though us Formula One fans, and people who work in the industry know that in the past 15-20 years Bernie has been too greedy and not doing anything to attract young fans and grow the sport, maybe Liberty’s dismissal of one of the world’s most cunning businessman may have left him free to start picking apart Formula One from behind the scenes, and structuring a coup to take over once again.
We’ve seen Bernie do much more cunning and ruthless deals in the past 67 years of Formula One. Let’s not be quick to discount that he has alternative plans for Liberty and F1 over the next couple of years.