IT’S A CAR CRASH!
Bernie admits F1 is facing a threat to its existence as shutdown leaves teams on the brink
BERNIE ECCLESTONE is locked down at his coffee farm in Brazil. At 490 acres it is literally the size of Monaco, and, with coronavirus lurking, staff who live on site go out a couple at a time to do the shopping. The gates are closed but the phone is ringing for the man who created modern Formula One. I ask him if the pandemic menace is the biggest threat to the sport that he has ever known. After a pause: ‘Yes.’ Aged 89 and hardened by a life of deal-making that took him from his Bexleyheath car showroom into the confidence of presidents and princes, he is not given to panic or fretting. He is, however, concerned by the hiatus in Grand Prix activity that imperils what was a near $2billion-a-year business.
The backdrop is that racing is suspended until the summer at least; the British Grand Prix in July is likely to be postponed, perhaps this week; the teams are taking FIA- mandated factory closures moved from August to now and, it can be revealed, those are likely to be extended.
And, although no team principal wants to speak on the record, The Mail on Sunday understands from high-placed sources that several teams, possibly all of them, are in discussions with t heir HR departments and l awyers about putting hundreds of staff on furlough to see them through the lull. Others will be redirected to making ventilators for the health emergency.
In a frank interview, Ecclestone sees reason for hope but only if the sport follows a tough prescription to live within its means and places pragmatism ahead of rampant egotism.
‘Let’s look at a good side and it takes six months to tidy up this pandemic and there is no longer a problem, it is still not easy for Formula One to put on races,’ he says. ‘It’s not like sowing a seed. There are an awful lot of things you have to do. ‘You have to get the promoters to take a risk on staging events not knowing if they are going to get the public in or not. You can’t stage a race if it’s -10C. And people usually plan what they are going to do; they don’t just wake one day and say let’s go to Silverstone or wherever else. ‘ And even if all that is sorted, you then need participants. And the next question is: are they alive and well to perform? And that i s another t hing again. Even a smaller team like Williams, t hey have staff to pay and bills to pay, and it’s not easy for them if they are not getting t hei r r e venue from racing.’ As it stands, the s p o r t ’s chief executive Chase Carey, who took over from
Ecclestone when Liberty Media bought the sport for £6bn in January 2017, has said he wants to stage between 15 and 18 races later in the year. He has been granted flexibility by the stakeholders to remould the calendar as he sees fit.
It is understood that teams are frustrated by Carey’s slow-moving, ultra- consensual approach. One insider told The Mail on Sunday that while consultation is fine — a trait for which Ecclestone was not famed — ‘full-blown democracy is going too far’.
It can also be revealed it was the teams who pressed Carey, a former 21st Century Fox chief executive, i nto i ssuing a st atement l ast Monday, in which he took the bull by the horns in stating that racing would reconvene despite the slew of eight postponements so far.
The Mail on Sunday also understand that Carey, 66, has privately spoken to the teams and FIA about holding three races on back- toback-to-back weekends followed by a one-week break, and of staging two races on the same track on consecutive Sundays, to cram the quart of a season into a pint pot.
All the while, the money problems are mounting up for Liberty. Their three big revenue streams — in decreasing order of financial magnitude: race hosting fees, broadcasting rights and sponsorship — are all under threat.
Formula One, l i s t ed on t he NASDAQ under the ticker FWONK, has fallen dramatically in recent weeks, before and after the cancellation of the first race in Melbourne earlier this month. In 30 days up until March 17, the stock dropped by 60 per cent. It has, however, shown signs of revival in recent days.
At the s mal l e r t e a ms, the situation is critical. The absence of racing cuts out a regular revenue stream, placing them on the breadline, though they do still receive their slice of last year’s £720million prize-money fund.
A budget cap of £150m is due to be introduced next season. Talks are under way to slash that further. The sad corollary is that jobs will be shed among workforces that in the UK — where seven of the 10 teams are based — range from Wil l i a ms’s 6 5 0 e mployees to
Mercedes’s 1,500. McLaren employ 850 people on their F1 programme. What would Bernie do? ‘In older times when people didn’t have such big staff and they ran into problems I’d always bail them out, give them a while to hand me the cash back — or sometimes we forgot to collect the money. Now it’s different scale money,’ says Ecclestone, who is with his Brazilian wife Fabiana, 43.
‘It’s a different world, too. Then it was on a very personal basis. They would ring up and say, “Bernie can you help?” Like dear Frank [Williams]. Nobody would then say, “You helped Frank, how about me”.
‘You did what you thought was right. Liberty are a very successful company and Mr [John] Malone [the American owner] is a very, very good business operator and he will look to see if he needs F1.
‘I would say: we think F1 is a good business and then put a big, big chunk of money behind it — to say, this is what we will invest in it.
‘I would buy all the promoters, who do a super job, take the risk from them. I’d then be in charge of running the races. That would be the first thing.
‘Then I would try to preserve the teams. I’d talk to them in a very nice way: tell them to change the way they operate. Tell them they are spending too much money — no, you’re wasting too much money. These bloody great motorhomes, for example. This is where sometimes egos get in the way.’
New rules and regulations were due to come in next season. They are being delayed a year to save an outlay now. Ecclestone would go further. ‘I wouldn’t change the rules for three years,’ he says.
‘ Liberty need t o completely reshape things. The biggest change I would make is to create a teams’ championship. You would still have the drivers’ championship for everyone and a constructors’ championship for the big four or whatever.
‘Then I would give the less welloff teams two chassis, two engines for the season and let them run for £30m a year [Ferrari and Mercedes spend more than 10 times that].
‘I would then have rules and regulations — taking in the weight of the cars and engine capacity — that I knew full well meant the teams with that sort of budget would have a good chance of getting on the podium and with luck win a race.
‘ At t he end of t he year t he team that has done best on that budget would win t he t eams’ championship.’
Will Ecclestone, 90 in October, return to buy the sport back?
‘No chance,’ he says.