#F1 Features: Fall of the Empire Part 3 – The tools of battle defined

Wheeling and dealing has been the Ecclestone way since he realised he wanted Formula One to be his life.

This year saw the 40th anniversary of an event which shaped Formula One. The Belgium GP was due to take place in Nivelles because the race in Spa had been in crisis since 1969. That year it was cancelled due to drivers concerns over the weather but plans were afoot to purpose build a permanent 6 mile circuit in Spa, though this would take some years.

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The proposed 1974 Belgium GP was to be run for the second time in Nivelles, yet the circuit organisation was declared bankrupt by a Belgium court and in February the Royal Automobile Club de Belgique announced that the race was unlikely to happen.

Ecclestone, then team owner of Brabham, was at this time also running the F1 Constructors’ Association and negotiating with track owners and race promoters on behalf of the teams. Bernie was obviously keen for the event to proceed and Marlboro and Texaco were prepared to sponsor the event – but more cash was required to see the race take place.

Bang and Olufsen were persuaded to also sponsor the race but there was still a shortfall being the prize money for the constructors. Ecclestone said he would stand this – and in return he organised the ticketing and received the gate receipts, programme sales and any trackside sponsorship money he could find.

The events of the weekend proved to be problematic. The timekeepers appeared to be using an abacus when they created a grid where Ferrari’s Clay Regazzoni was on pole and even his team conceded the time he was awarded was wildly optimistic.

Yet incredibly, 31 cars qualified and started the race – an F1 record which still stands – but most importantly, more than 70,000 people bought tickets and programmes and as Autosport writer Paddy McNally commented, “Bernie scooped the jackpot”.

Ecclestone learned a valuable lesson as part of this process. Freddy de Dryver, the CEO of Bang & Olufsen Benelux, according to his son stated, “I’ll put the money on the table but I need it to be the Bang & Olufsen Belgian GP. I want to be the main sponsor”.

Texaco, Marlboro and the RACB refused this point blank and so Dryver was set to walk away until Bernie put his hand on his shoulder, told him to sit down and the deal was done.

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How Ecclestone resolved the issue has not been reported. However, One version of events is that in a moment of inspiration, Bernie put it to the International Brands of Texaco and Marlboro, that to avoid further races collapsing, he was going to invite local national organisations from each country to sponsor races and in return put their name into the title of the event. Marlboro and Texaco were thus placated.

Further, the RACB were simply told to put up or shut up – and that was that.

Ecclestone later reflected with a smile, “We [I] didn’t know how it worked, we had to learn.”

The need to make something happen quickly, was clearly a hunter style of skill Ecclestone had developed, possibly during his pre-F1 days as a motorcycle dealership owner and salesman. Good sales people generally understand the pressure points required to convince people of their offer and can be persuasive from each side of a debate.

Yet the kind of deals which are done in the moment to achieve the immediate objective, often become problematic when they are part of an interconnected web of something much larger. The concessions made to secure one deal – will eventually prejudice other opportunities.

We learned last week that no amount of cash, Qatar can possibly conceive of offering, will see this gulf state host a Formula One race. This despite the facility at Losail, which hosts MotoGP each year, being generally considered as excellent and requiring minimal alterations to be accredited by the FIA for Formula One.

In a briefing given to journalists by Ecclestone 2 weeks before Christmas, this matter of a race in Qatar was raised, following the recent FIA meetings held in Doha.

Ian Parkes of the Press Association recorded that Ecclestone believes Formula One should have 3 events each year in the middle east, but a deal he did some years ago makes this impossible for Ecclestone alone to deliver.

A candid Ecclestone revealed. “I’ve a bit of a problem, which nobody knows about really, but I’m sure they soon will. When we went to Bahrain I made a deal with the people there.

“They said to me that as they were going to be something new in the area, would I give them a guarantee I wouldn’t stage another race in the Gulf, and I said yes.

“It was a typical Ecclestone handshake deal with the Crown Prince.

“But then Abu Dhabi wanted a race. I explained to them the position I was in, and I said to them, ‘You better ask the people in Bahrain. If they’re happy, I’m happy, if not, we won’t (go)’.

There have been recent meetings between the race organisers from Bahrain and Abu Dhabi who have discussed the matter with representatives from Qatar, as Ecclestone explains.

“Now this other race has been proposed [Qatar], so I put the people together and said ‘Can you sort this out between you?’. They haven’t managed to do it.’

“So they got together and that’s what happened”.

Asked whether Bahrain and Abu Dhabi have a right of veto over Qatar for as long as they stage Grands Prix, Ecclestone nodded and replied: ‘Yeah.

Bernie+Ecclestone+Luca+Cordero+Di+Montezemolo+452A0CLSzBclThe big news last week was that Bernie Ecclestone had ‘won’ his battle for control in Formula One, following CVC reinstated his statutory directorships to the Group of Formula One companies. However, at the same time, Luca de Montezemolo was appointed to the board along with Paul Walsh who had been tipped to oust Ecclestone from his role as F1 supremo.

Ecclestone’s negotiation skills will be put to the test managing these relationships which could be complex in terms of shifting allegiances.

Ferrari allegedly demonstrated their power in this forum, when Sergio Marchionne wielded the Ferrari veto to block the appointment of LdM as chairman. The veto was awarded to get a previous deal done  by Ecclestone some years ago.

In the latest of the negative F1 news stories, Bernie is to face more time in front of a judge – in Germany despite his humorous dig at the German legal system via his annual Christmas card.

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“BayernLB has filed a law suit against Mr Ecclestone, the family foundation Bambino and others and is asking for damages of €345million plus interest,” commented a BayernLB spokesman late on Friday.

BayernLB claims the man from Suffolk received unjustified commissions and undervalued its stake in Formula One when private equity fund CVC became the largest shareholder of the sport’s commercial rights in 2006. BayernLB will seek to demonstrate that Bluewater Communications were prepared to offer a higher price for Formula One than Ecclestone’s eventual preferred buyer – CVC.

“When the bank’s stake in Formula One was sold in 2005 and 2006 a board member was bribed. The sales contract was not negotiated, but it was finalised at terms dictated by Mr Ecclestone, which were disadvantageous for the bank,” the spokesman added.

And this is not the only fight Bernie has on his hands. He is adamant he will force a return to V10 engines in Formula One. And should the EU have their say, Ecclestone could lose his influence on the FIA and the regulations of F1, were the strategy group to be declared an illegal for of governance within the sport.

The vultures are circling, but there’s still fight the old hand yet.

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2 responses to “#F1 Features: Fall of the Empire Part 3 – The tools of battle defined

  1. Doesn’t really surprise me that his first real “deal” happend here. Belgium likes corruption. We might be the inventors of it…

    • I’m surprised Bernie didn’t give Bahrain just a ten year veto. But given the amount of money they’ve poured in, perhaps that’s understandable. If Qatar wanted F1 badly enough, I’m sure they would have it, but their sights are set on the FIFA World Cup, something even more corrupt than F1!

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