The case is set­tled – not the suc­ces­sion

F1 Racing - - INSIDER -

Such a model was planned for F1 be­fore the poor health of the global econ­omy, and the un­cer­tainty sur­round­ing the court case, put the brakes on the whole process. CVC ended up sell­ing off half of its orig­i­nal 66 per cent. Cru­cially, though, it re­tains over­all con­trol. When of­fered the chance by pros­e­cu­tors, Ec­cle­stone availed him­self of Sec­tion 153a of Ger­many’s crim­i­nal pro­ce­dure, which lets ac­cused par­ties set­tle cases in ex­change for a fee paid to the state and/or a recog­nised char­ity, sub­ject to the judge and pros­e­cu­tion agree­ing. Un­der this pro­ce­dure, which ex­ists to ease the ad­min­is­tra­tive bur­den on the court sys­tem and bring to a swifter con­clu­sion cases where judg­ment is dif­fi­cult, the sum is de­cided based on the sever­ity of the al­leged of­fences and the ac­cused’s means - hence the head­line-grab­bing gure of £60mil­lion, with £600,000 go­ing to a child hospice foun­da­tion and the bal­ance to the Bavar­ian state. Thou­sands of cases are set­tled thus ev­ery year, though this one sets a record.

So Ec­cle­stone re­mains at the helm of For­mula One Man­age­ment. CVC had un­der­taken to sack him if, in the words of co­founder and chair­man Don­ald Macken­zie, it had been “proven that Mr Ec­cle­stone has done

“F1 will still be be run by an oc­to­ge­nar­ian with no in­ten­tion of hand­ing over the reins”

any­thing crim­i­nally wrong”. The set­tle­ment closes the door on this, and, while a court state­ment made clear civil ac­tion could not be ex­cluded, Judge Peter Noll’s part­ing shot to Ec­cle­stone was, “I as­sume we will only see one another again on tele­vi­sion.”

The trial had been held for two days a week since April to en­able Ec­cle­stone to con­tinue to dis­charge his du­ties, and within hours of the set­tle­ment he was back at his desk in London. While Ec­cle­stone’s stamina is re­mark­able, surely the les­son of this lengthy and ex­pen­sive court case, in which an 83-year-old with a his­tory of heart dis­ease faced the prospect of a jail term if found guilty, is that CVC need to de­vise some form of suc­ces­sion plan­ning. And they must an­nounce that plan to ap­pease the anx­i­eties of the gov­ern­ing body, teams, part­ners, spon­sors, broad­cast­ers, pro­mot­ers, and that oft-for­got­ten group – the fans.

There was univer­sal fear in the pad­dock about F1’s fu­ture should Judge Noll pro­nounce Ec­cle­stone guilty with no suit­able re­place­ment in sight, for the sport faces cash-strapped teams, dis­ap­pear­ing spec­ta­tors, di­min­ish­ing TV au­di­ences and dwin­dling spon­sor­ship rev­enues across the board. Yet CVC ap­peared to have no con­tin­gency plan to deal with th­ese chal­lenges. When Ec­cle­stone was rst charged, a deputy was not ap­pointed to man­age the business – in­stead, de­ci­sions and agree­ments were es­ca­lated to Macken­zie’s of­fice. This surely points to a suc­ces­sion vac­uum. CVC have en­joyed an es­ti­mated 500 per cent re­turn on their orig­i­nal in­vest­ment, and have ap­proached the mar­kets for a bil­lion-dol­lar loan to pay share­holder div­i­dends. That loads F1’s debt pile, a move ob­servers fear spells a phased exit, pos­si­bly as soon as late 2015.

The route could be via the sale of CVC’s re­main­ing 35 per cent, or an IPO [Ini­tial Pub­lic Of­fer­ing], likely in Sin­ga­pore. After two aborted at­tempts – one of which stalled at the blocks – the money mar­kets are scep­ti­cal, which does not bode well for a ota­tion.

Ei­ther way, F1 will still be over­bur­dened by debt. And it will still be run by an oc­to­ge­nar­ian with no in­ten­tion of hand­ing over the reins. From that per­spec­tive, the Mu­nich set­tle­ment has not changed any­thing.

Bernie Ec­cle­stone with his lawyer, Nor­bert Scharf, in Mu­nich. Ec­cle­stone has set­tled his bribery case for a record £60mil­lion

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