|Rediff India Abroad Home | All the sections|
Ecclestone faces hard year ahead
Alan Baldwin | January 10, 2005 11:49 IST
Some businessmen might consider 74 a good age to ease up a bit.
Not Formula One's commercial supremo Bernie Ecclestone, who can expect to have more on his hands than ever this year despite billions in the bank and triple heart bypass surgery in his recent past.
The diminutive dynamo who has ruled Formula One for the best part of three decades faces a determined challenge in what promises to be a decisive period for the future of the cash-laden but troubled sport.
A ruling, delivered by a British High Court judge last month, has altered the Formula One landscape but no-one can say for sure how the next few months will pan out.
Much will depend on Ecclestone, his deal-making skills and how much power he is forced to relinquish. He must contend with both the banks that own 75 percent of Formula One's holding company SLEC and major carmakers who are threatening to launch a breakaway series from 2008.
The banks, who want to safeguard a billion-dollar investment, are chipping away at Ecclestone's power base and may seek an agreement with the carmakers who want most of the revenue pie rather than just a thin slice.
"(The judgment) seems indeed to be a turning point in the future of Formula One," the carmakers' Grand Prix World Championship (GPWC) company said last month after the banks won a dispute over the appointment of directors to the board of Ecclestone's Formula One Holdings.
There are sure to be more legal challenges to come and meanwhile time is running out.
Luca di Montezemolo, president of champions Ferrari, has said he is not sure who is in control of the sport but change will come regardless.
"From 2008 there will be one Formula One world championship and the decision on this will fall in 2005," he said in an interview with Germany's Welt am Sonntag newspaper.
"I know that Ecclestone has certain rights in relationship to the Formula One name but that's not a problem for me," he added.
"Whoever rules over the new Formula One must know that there must be big changes to profit-sharing and the say of the teams and manufacturers."
The GPWC is moving ahead with its planning and intends to meet the 10 team bosses some time before the start of the season in Australia on March 6 to present their latest blueprint for the future.
While some hold that the time has come for a different, and more transparent, way of doing business, others suspect Ecclestone still has plenty of tricks up his sleeve.
"Don't ever make the mistake of underestimating Bernie," Austria's former champion Niki Lauda declared in the Guardian newspaper recently.
"He probably knew before the court case started that he would probably lose. He is the perfect businessman who knows you just have to ride out the short-term ups and downs of this game.
"All his enemies may be happy and laughing but they'd better enjoy it while they can because they may be crying soon."
Ecclestone, who will be 77 when the existing 'Concorde Agreement' governing the sport expires in 2007, has dismissed suggestions that his grip has been substantially weakened.
He told the Financial Times that even if the banks -- Germany's Bayerische Landesbank, JP Morgan and Lehman Brothers -- sought control of his key Formula One Administration and Formula One Management companies they would still not be able to do a deal with the carmakers without his backing.
Ecclestone remains chief executive of Bambino Holdings, which originally sold the 75 percent stake now controlled by the banks to Germany's failed Kirch media group.
"If they had done anything like the due diligence they should have when they lent Kirch the money, they would have realised that, because of the way the shareholders' agreement is structured, they can't do a thing without Bambino's permission," Ecclestone said.
That assertion may also be challenged in the courts eventually. And while Ecclestone, the banks and carmakers are squaring up to each other, so too are the teams and International Automobile Federation (FIA) governing body.
They are due to meet on January 28 to discuss more ways of reducing costs to protect small teams such as Jordan and Minardi whose Formula One survival hung in the balance last season.
"If we do not do something this year, we will have the same crisis in 2006 and we won't get 10 entries (on the grid)," FIA president Max Mosley warned in December.
"This sport desperately needs new blood. We need to attract new teams. We have attended to safety as much as we can for next year. Now we must urgently look at costs.
"Why do teams need 100 people working on electronics? It takes 1,000 people to put two cars on the grid. If anyone thinks that does not need sorting out they don't know what they are talking about."
Factor in rule changes, with tyres and engines having to last far longer, as well as big moves on the driver merry-go-round, and 2005 promises to be a lively season.
Formula One: The Complete Coverage