Putting Bernie Ecclestone on the spot

A chat with Bernie Ecclestone is always fun: irreverent at times, his oft-jaunty manner camouflages a razor-sharp brain that is three or even four moves ahead of the game at hand. This time the reason for the meeting is the question of football and a connection to premiums paid to Formula 1's 'big four' teams since 2013.

After three in-depth investigations the EU concluded that public support measures granted in Spain to seven professional football clubs gave them an unfair advantage over other clubs in breach of EU State aid rules. Accordingly the Commission directed that those funds be recovered from the clubs.

Although public monies were used, one particular comment in the verdict is particularly telling, namely that "The Commission's action ... keeps the playing field level for the majority of professional clubs who have to operate without subsidies. Such subsidies can enable bigger or smaller clubs to overcome their rivals".

That notion might sound very relevant to F1 followers accustomed to payments weighted towards the paddock's largest operations.

"The principle is the same in so much as the arrangements benefit a few select teams by distorting competition," says Force India's deputy managing director Bob Fernley, who triggered an EU investigation into F1's payment structure on behalf of his team and Sauber.

"It is therefore unfair and illegal. The EU will take action when and where such distortions arise, and I'm optimistic the EU will take action in this [F1] case."

Assuming Fernley is correct, and the EU directs that premiums paid by F1 commercial rights holder Formula One Management be forfeit, the consequences for the teams - Ferrari, Red Bull Racing, Mercedes and McLaren - could be catastrophic, for this year alone they collected between $100million and $35million each, with the total subsidies for the 2015 season (paid in '16) amounting to over $200m.

Now multiply that by four to take it account all seasons in the EU investigation's remit...

This begs the question: How would Ecclestone react to such a directive were it to happen?

After a brief discussion about whether the EU would have the right to intervene after Brexit - which it does, as illustrated by the fact that Commissioner Vestager has taken on, amongst others, American powerhouse Apple - and whether the whole debate is "a bit silly", Bernie admits it all "depends on what they decide they want to do".

Maybe so, but the bottom line is that EU directives need to be respected - as Microsoft discovered at its peril - and should that come to pass a team such as Ferrari, recently listed on the New York Stock Exchange, could immediately find itself out of pocket to the tune of $400m, with the same amount potentially forfeit going forward until 2020 when the current F1 commercial terms come to an end.

Imagine what an immediate hit of $120m would do to McLaren's coffers, particularly given the team's recent poor run of results, or how Red Bull boss Dietrich Mateschitz would feel about having to hand back an unexpected $320m. Would these teams survive such directives?

However, the more pertinent question is: should the EU actually find that the subsidies are anti-competitive and need to be returned, would FOM pocket the money, or distribute it equitably among all teams based on their respective performances since 2013? The temptation must surely be there to fill the coffers of CVC Capital Partners, the venture fund that controls FOM.

Ecclestone admits that Ferrari, for example, would be hard hit, saying "Yeah, it wouldn't make them happy", before stating "I wouldn't do anything, because we don't know [whether the EU will take such action, or what it would be]. You said 'If it actually happens'."

In which case, would Ecclestone spread the forfeit revenues equitably among the teams?

"No, if [the teams] give it to us, if we gave it - if that's what the law says - we'd follow the law, whatever it says. If it says it's got to come back to us, that's what it has to do."

The answer will be of mixed comfort to Force India and Sauber if CVC's investment funds do indeed retain any forfeited monies, for, while on the one hand the gap between the haves and have-nots would tighten up considerably, the smaller teams would not benefit from the larger 'pot' to settle the appreciable debts incurred in the interim.

However, there is more chance of McLaren employing rent-a-boss Colin Kolles to run its show than of CVC voluntarily giving up on any of the billions it has syphoned off F1 over the past decade - and therefore the disenfranchised teams can but hope the EU Commission not only agrees with their case, but decrees that the premiums should be distributed equitably.

With our chat taking place midway through F1's most congested calendar period ever - during the start of the fourth of six grands prix in eight weekends and second of four in five - what are the chances of 21 races next year, particularly as the perennial question of another race in the USA is doing the rounds as we speak?

"Probably 21," Ecclestone says wearily. So Germany and Brazil could remain? What about Italy and another race in the USA? Taking the last-named first, he is dismissive about trans-Atlantic progress; as for Italy it is a case of "It was all agreed, and then it changed... but we're hopeful."

And Brazil: "We would need to take a [fiscal] chance on Brazil [given the country's current economic and political woes]," while Germany could still happen [at Hockenheim] "if we subsidise them." However, it is clear he is bracing himself for a late-teens calendar.

A draft calendar should be available at the end of August (Spa time), he says, and then Kyalami briefly enters the discussion, where, again, Bernie does not see much hope: "Well, it's not big enough, I think. I might be happy to race at Kyalami, but I don't think anyone could be the promoter there and make it work. Unless the government gets behind us."

But, Bernie, they've recently spent £25m on improving the place.

"Yeah, yeah, [they've] done a good job. They couldn't run a race on that circuit and make it work, not economically, they couldn't."

With three current grands prix endangered, Austria glaringly devoid of crowds and no real prospects on the horizon, is this not proof that hosting fees - and, by extension, ticket prices - are too high?

"If you've got people that want to buy things and they're not complaining, I don't understand what the problem is."

But in Austria the fans voted with their wallets and stayed away.

He maintains that what promoters charge has nothing to do with him, which, taken in isolation, is a Bernie-ism in that it is absolutely correct - save that tickets prices are a function of hosting fees.

"We have lots of places where we race and nobody seems to complain. They don't even bother how many tickets they sell. For the Olympics, for example - you know how much the Olympics cost. Nobody complained [about London 2012]."

Ahh, his old hobby horse: state subsidies of other major events. But, of course, the IOC and FIFA World Cup are run by their federations, not a bunch of bankers. That point is neatly side-stepped.

During our preamble Bernie implied there were (again) syndicates sniffing about F1's commercial rights, but with nothing concrete said, is this simply sales technique applied by the greatest salesman in contemporary sport? However, the more folk walk away from a deal, the more F1 gets marked as unsellable, and therefore its owners should surely be low key about prospects.

Which leads us neatly to discussions about the post-2020 period, when existing contracts expire: Has he commenced discussions about new agreements with the teams? After all, there are only four years remaining under present contracts, which means that in strictly commercial terms F1 currently has a four-year shelf life. If discussions have not already commenced, when will they start?

"No, we don't need to yet," says Bernie - seemingly overlooking the fact that he told Autosport in Austria a fortnight ago that he hoped to "get something sorted out this year", with the expectation being that new sporting/technical rules would also come into force in 2021.

Then comes a twist to the interview: "Plenty of time [left]. I hope I'm going to be here to do [the negotiations] again, in three years."

Note that last sentence: it marks the first inkling that Bernie realises he may not be around forever; that the 86-year-old recognises his own mortality after all, despite brushing away such suggestions in the wake of an open letter from this writer, telling Autosport in April he intends "living another 35 to 40 years."

So I put it to him that there is, in fact, one man who has all the skill sets required to run F1.

In no particularly order these are: negotiating with teams, circuits, and broadcasters/media; dealing with federations, including the governing body; presenting to governments and parastatals; keeping sponsors and multinationals sweet, including motor manufacturers; employing the right people for any given activity, be it operational, sporting or legal; and generally acting as figurehead of a global sport.

"Who?" he asks eagerly.

MotoGP boss Carmelo Ezpeleta, who, arguably, does as good a job as Ecclestone in his own domain, and seems to be the only person suitably qualified to seamlessly replace Ecclestone given that the other candidate, Ross Brawn, seems disinterested.

"Ah, yes. He's a big mate of mine," says Ecclestone of Ezpeleta. "I'd be delighted to have him on board, [but] we couldn't afford him, or CVC couldn't afford him."

But, surely, if he's worth it, one can...

"With the deal he's got now, CVC couldn't afford him. He does alright. I don't do what I do for money. I'm in the lucky position that I don't need a job, I don't need the money, so that's how it is."

Which, by implication, places the burden of succession on Bernie's shoulders, particularly if he is not around in three to four years as he indicated could be the case, and loves F1 as much as he professes. Recognition that action needs to be taken soon cannot be too far away, either.