THE 2004 Formula One (F1) season has not exactly set pulses racing: with five races to go, Michael Schumacher, a driver for Ferrari, looks certain to win an unprecedented fifth consecutive championship. Behind the scenes, however, there has been a much more exciting battle over who runs and controls the sport. Barring a last-minute settlement, the dispute will become public in a British courtroom in mid-September.
Bringing the case are three large banks—Bayerische Landesbank, Lehman Brothers and J.P. Morgan Chase. Through Speed Investments, these have a 75% shareholding in SLEC Holdings, which in turn owns the cascade of companies that run F1 (see table 1). …
BERNIE ECCLESTONE is a survivor, but it has been a bad week for the British entrepreneur who has run the commercial side of Formula One (F1) motor racing almost single-handedly for nearly 30 years. He must have been mortified to read headlines pronouncing that he had lost a court battle, to which, strictly speaking, he was not even party, for control of the sport.
The case was brought by three banks against Bambino Holdings, which owns 25% of the firms that exploit commercial rights to F1, and two Swiss lawyers who act for Mr Ecclestone's family trust, the ultimate owner of Bambino. (Counsel for Bambino emphasised the “separateness” between Mr Ecclestone and Bambino, which are not synonymous.) …
WHILE the ten motor racing teams that are expected to compete in next year’s Formula One world championship tested their cars at the Jerez track in Spain, a drama of a different kind was unfolding in London’s High Court. On Monday December 6th, Mr Justice Park granted an application by three banks—Bayerische Landesbank, J.Pa Morgan Chase and Lehman Brothers—for a summary judgment against Bambino Holdings, a company owned by Bernie Ecclestone’s family trust. The ruling may be a first step in deciding who will eventually call the shots in one of the few truly global sports, with estimated commercial rights of around $800m.
Since the 1970s, when he spotted the potential to turn it into a lucrative sport, Mr Ecclestone has been Formula One’s ringmaster and the driving force behind grand prix racing. In making his ruling, the judge said that Bambino had “no real prospect” of defending the banks’ claim that the company, which owns 25% of the companies that run the commercial side of Formula One, had wrongly appointed two directors to another firm, Formula One Holdings (FOH), were such a case to come to a full trial. …
AFTER months of apparent posturing, Paolo Cantarella, the chief executive of Fiat, announced this week that the car manufacturers involved in Formula One (F1) will set up a new motor-racing series—apparently to be known as the Grand Prix World Championship—and will pull out of F1 in 2008. Mr Cantarella was speaking for a consortium comprising BMW, DaimlerChrysler, Fiat, Ford and Renault, which back five of the 12 F1 teams. Fiat owns Ferrari, a name synonymous with F1.
The car makers first threatened a breakaway in February when the Kirch Group, owned by Leo Kirch, a German media magnate, bought a big stake in SLEC Holdings, a group of companies that owns a large part of the commercial rights to F1. Mr Kirch gained control of SLEC (he owns 58.3%) in October, when the family trusts of Bernie Ecclestone, a controversial British entrepreneur who has run F1 since the 1970s, gave the necessary approval. The teams are bound to the current championship until the end of 2007 when the Concorde Agreement, a ten-year arrangement governing the relationship between the teams and SLEC, expires. …
THE Australian Grand Prix on March 4th marked the start of another season of Formula One (F1) motor racing. The race was won by Michael Schumacher in a Ferrari. But the event was marred by the death of a race marshal, who was killed by debris from a crashing car. While the race season has started so unhappily, a multi-billion dollar struggle is going on off the track for control of the rights to broadcast the sport. Some teams are even threatening to set up a rival championship.
Broadcasting F1 races has become a hugely lucrative business—each race, it is claimed, attracts around one billion viewers. The money that sponsors and advertisers pay to get their brands and products in front of this audience keeps F1 going. As always, one man looms over the fight: Bernie Ecclestone, a wealthy entrepreneur who over the past 20 years has turned F1 from an amateurish sport, watched mostly by enthusiasts, into a global television enterprise rivalled only by the Olympics and football’s World Cup. …
FEW people, except conspiracy theorists, would have expected so public a spat as the one this week between the two ringmasters of Formula One (F1) motor racing. Bernie Ecclestone, a fabulously wealthy British motorsport entrepreneur, is at odds, it would seem, with his longstanding associate, Max Mosley, president of F1’s governing body, the Fédération Internationale de l’Automobile (FIA).
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BERNIE ECCLESTONE, a fabulously wealthy British motorsport entrepreneur, already has an iron grip on broadcast media coverage of Formula One (F1) motor racing. Now he wants to control news and information on websites about F1. Hundreds of sites feature F1 as part of their general coverage, and several are devoted exclusively to the sport. So far Mr Ecclestone himself has done nothing to exploit F1 on the Internet.
After failing to persuade Ms Morris to hand over both domain names, Mr Ecclestone filed a lawsuit against her in California, alleging trademark infringement and misleading promotion of Formula1.com as a site he endorses (despite the fact that the top of every page of the site says it is “unofficial”). Ms Morris is countersuing Mr Ecclestone on antitrust grounds. It is probably no coincidence that Mr Ecclestone is to launch a magazine called F1 next February. He may just be stuck for a snappy domain name for the online edition. …
ON JUNE 28th, in the offices of the Fédération Internationale de l’Automobile (FIA) in Geneva, delegates from over 70 national motoring associations around the world, who comprise the FIA’s supreme body, its general assembly, met in extraordinary session and voted unanimously on a single resolution. It was to approve a deal, recommended by the FIA’s senate, to grant the FIA’s commercial rights to Formula One (F1) motor racing until December 31st 2110—ie, for more than 100 years—to one man, Bernard (Bernie) Charles Ecclestone. There was no auction for these valuable rights; Mr Ecclestone was the only bidder. The delegates were sworn to strict secrecy to ensure no leaks.
The price for such a sweeping concession: $360m, payment of most of which the FIA has deferred for many years. With this deal, Mr Ecclestone, through Formula One Management (FOM, the key trading company in his empire), has, in effect, sole rights to negotiate with and collect lucrative fees from the promoters who put on grand prix races. He also has sole authority to sell television rights worldwide for a sport whose 17 races each year pull in an aggregate TV audience of around 5 billion. …
“HE HAS a travelling bus; this bus is rather grander than the word ‘bus’ normally conveys and is, perhaps, more similar to the tent of a medieval king on the battlefield. There are the equivalent of courtiers who control access to the presence.” Thus an English judge in a recent civil case, summing up the style of a defendant, Bernie Ecclestone, who runs Formula One (F1) motor racing. Among those who have been admitted to the presence are the German chancellor, Gerhard Schröder, and the British prime minister, Tony Blair. Mr Blair’s Labour Party once received a £1m ($1.5m) donation from Mr Ecclestone (and had to return it after a brouhaha about a concession to F1 on tobacco advertising).
Mr Ecclestone’s dominance of F1 is deeply entrenched. He is a vice-president of the sport’s governing body, the Fédération Internationale de l’Automobile (FIA), and his family owns a company (Formula One Management) that has acquired exclusive commercial rights to F1. The unpaid head of the FIA, Max Mosley, recently noted that “The FIA, in conjunction with [FOM], essentially is F1.” …