ANALYSIS: What Bernie Ecclestone's resignation means for F1

ANALYSIS: What Bernie Ecclestone's resignation means for F1

Formula 1

ANALYSIS: What Bernie Ecclestone's resignation means for F1

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So…things are finally beginning to happen after months of speculation, and on the day that a German court at last revealed that they are to put Bernie Ecclestone on trial for bribery in April, the real question is what effect it will have on Formula 1 that its long-standing ringmaster has simultaneously tendered his resignation as a director of the Formula 1 group.

 

First, let’s look at the whys. The moment that the German court found banker Gerhard Gribkowsky guilty of corruption and taking bribes, it was clear that Ecclestone, said to be the source of the bribe, was in potential trouble. Last year the court served him with a bill of indictment which required him to respond to the accusations of bribery and corruption. Since then, his lawyers have been working overtime, but their efforts have clearly not persuaded the court and now he must stand trial.

 

The immediate effect was his resignation, for while CVC Capital partners – the private equity company which owns the rights to Formula 1 – might appreciate only too well that he is the one who knows the most about their cash-cow sport, it would clearly be untenable for a man facing criminal charges to remain on their Board. Interestingly, however, he remains chief executive officer as chairman Peter Brabeck-Letmathe and his deputy Donald Mackenzie now take overall charge of affairs.

 

“After discussion with the Board, Mr. Ecclestone has proposed and the Board has agreed that until the case has been concluded, he will step down as a director with immediate effect, thereby relinquishing his board duties and responsibilities until the case has been resolved,” a company statement said. “It is in the best interests of both the F1 business and the sport that Mr. Ecclestone should continue to run the business on a day-to-day basis, but subject to increased monitoring and control by the Board. Mr. Ecclestone has agreed to these arrangements.”

 

The first effect is that Ecclestone’s normal modus operandi of doing things his way, as he pleased, will to an extent be curtailed by this increased scrutiny. The second comment suggests, perhaps, that CVC’s inherent desperation to retain him as the chief executive could be an admission of the paucity of their understanding of a sport from which they have taken much without ever, it seems, giving anything back.

 

And yet it is also a smart move; it gives the appearance of propriety, while enabling things to carry on pretty much as they are…at least until the court reaches a verdict. Since that could be as early as May, it should not be too debilitating for the sport’s image as the legal wheels start to grind. Ecclestone will, of course, have to devote much time to his legal defense but, he said, alluding to recent appearances on another matter in the London High Court: “With the Constantin testimony I was out of the office for four days, but I could still work in the late afternoon and evening.”

 

It’s clear that he has been expecting to be charged for some time, and while some speculators have fancifully wondered if he would flee to perhaps Brazil, Bernie has always maintained that he will duly appear in court. “I am only interested in proving my innocence,” he has said.

 

There are two schools of thought about his current situation, and his possible future. Some believe that F1 cannot possibly operate properly without him, and that were he to step down altogether, either voluntarily or because of the possibility of a prison sentence, the lack of a defined succession would mean four or five people would have to fulfill his myriad roles. In common parlance, he knows where the bodies are buried, and is the master of negotiating the new-style races that have expanded the sport globally in the past decade. What CVC has done is buy itself the time to identify a new chief executive and Board member to lead the sport, should Ecclestone duly be found guilty. If that were to happen, his rule in Formula 1 will finally be over, a little more than four decades after it began.


Red Bull boss Christian Horner has been touted by Ecclestone as his choice as successor. In Brazil last year he said: “Christian would be ideal for my job. We could have a transitional period. It needs someone who knows the sport. If someone comes in from outside, a corporate type, I don’t think I could work with them. It wouldn’t last five minutes. People deal with me because they know me. I’ve known them for a long time and they trust me. They know I’m straight with them. That’s how it is with Christian. I hope we can do it.”

 

“First of all it’s flattering,” Horner told this writer at the time. “But I think Bernie is going to be here hopefully for a long time to come and it’s for the benefit of the sport that he stays in the rude health that he is in. It’s unimaginable that any one single person could replace him. He’s still in great shape, and still doing some massive deals for F1. You only have to look where he’s taken us recently.

 

“So, although it’s very flattering that he has mentioned me as he has, my focus is very much on Red Bull Racing and the job that I’m performing.”

 

Nevertheless, that does not explain why Horner and Ecclestone dine together at every race, and were said to have spent a week or two together on a private yacht last summer. Has the master been grooming his pupil?

 

Detractors say that Ecclestone’s old-school benign dictatorship and some of his tough guy, get-it-done-regardless methods belong in a different era and that they have long militated against the sport’s 21st century image with the new breed of seen-to-be-squeaky-clean corporations that have the global reach and funding that race teams are desperate to tap into as so many of them struggle to sustain their increasingly unrealistic spending patterns.

 

Removing Ecclestone altogether could finally speed up the move toward a stock market listing, something he has long resisted but which would confer a degree of respectability upon a sport still seen to be a little leery in some quarters. And it would alleviate problems associated with increasingly complex corporate law that precludes major companies being seen to do business with individuals who have been indicted, let alone charged.

 

Only the most naive would ever rule out the possibility of the 83-year-old ringmaster being able to prove his innocence and bounce back to pick up the F1 reins, but his critics and enemies believe that we are watching the end game, the final chapter of the Ecclestone era which brought riches to both the sport and to many of the team owners who, back in the 1970s, were content to hand him responsibility for running things while they focused on winning races.

 

If that were to come about it, remains to be seen whether CVC has the wit and understanding to put the right person in charge of the sport, and whether Formula 1 could thrive under a regime with a completely different view on business. Or whether the end of Ecclestone’s reign might coincide with a downturn in popularity as other sports and hobbies move to center stage.

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