A difficult time for Ecclestone
Discussion
http://www.telegraph.co.uk/sport/motorsport/formul...
Below is an extract of the article.
[Bernie Ecclestone has] . . . a $171 million damages suit, filed against him earlier this year, [is] due to begin in London's High Court on Tuesday morning.
The suit is the first of several cases around the world, all linked to ongoing bribery allegations in Germany, which may ultimately determine whether Ecclestone remains as chief executive of a sport he has presided over for 40 years.
The central charge against Ecclestone, which is still being investigated in Germany, is that he paid $44m in bribes to a German banker in order to engineer the sale of the sport to current owners CVC Capital Partners in 2005. The Munich state prosecutor has indicted Ecclestone on charges of bribery and a German court is now deciding whether the case should proceed to a criminal trial.
. . . there are rumours in Germany that the case could now be moved forward, possibly to as early as next week.
[The case in London] . . . media company Constantin Medien, a former shareholder in Formula One, will argue that Ecclestone and three other defendants deliberately undervalued Formula One when private equity firm CVC bought into the business in 2005 . . The case is expected to last around three to four weeks.
In the United States . . . an American private equity firm Bluewaters Communications Holdings has filed a $650m (£408m) lawsuit at the Supreme Court of New York State [against Ecclestone].
Ecclestone has missed the last three Formula One grands prix, in Korea, Japan and India . . . "It's not ideal. . .” he said of the High Court case.
Below is an extract of the article.
[Bernie Ecclestone has] . . . a $171 million damages suit, filed against him earlier this year, [is] due to begin in London's High Court on Tuesday morning.
The suit is the first of several cases around the world, all linked to ongoing bribery allegations in Germany, which may ultimately determine whether Ecclestone remains as chief executive of a sport he has presided over for 40 years.
The central charge against Ecclestone, which is still being investigated in Germany, is that he paid $44m in bribes to a German banker in order to engineer the sale of the sport to current owners CVC Capital Partners in 2005. The Munich state prosecutor has indicted Ecclestone on charges of bribery and a German court is now deciding whether the case should proceed to a criminal trial.
. . . there are rumours in Germany that the case could now be moved forward, possibly to as early as next week.
[The case in London] . . . media company Constantin Medien, a former shareholder in Formula One, will argue that Ecclestone and three other defendants deliberately undervalued Formula One when private equity firm CVC bought into the business in 2005 . . The case is expected to last around three to four weeks.
In the United States . . . an American private equity firm Bluewaters Communications Holdings has filed a $650m (£408m) lawsuit at the Supreme Court of New York State [against Ecclestone].
Ecclestone has missed the last three Formula One grands prix, in Korea, Japan and India . . . "It's not ideal. . .” he said of the High Court case.
Durzel said:
He won't see the inside of a prison cell. There will be appeals and various other legal contortions for as long as he is alive. Can't see it making much difference to F1 either to be honest.
Whether he is imprisoned is of no account. The effect of a either a finding by the London court or a decision to prosecute by the German on could have a considerable effect on the sport. Even the threat of this litigation and the bribery case would appear to be sufficient for the sale of the rights to be suspended. I doubt his authority will be undamaged already and such decisions would further limit him. He's been the controlling influence on the sport for many years but this might well see the end of what has been a rein. Things will be different once he's gone.
Edited by Derek Smith on Monday 28th October 21:01
I've been reading his biog (penned by Sid Watkins' wife incidentally) and he has been through some crazy shenanigans. I doubt this latest thing will cause him much stress to be honest. Many have said that his borderline senile facade is exactly that - the biog suggests that this is quite true.
miniman said:
I've been reading his biog (penned by Sid Watkins' wife incidentally) and he has been through some crazy shenanigans. I doubt this latest thing will cause him much stress to be honest. Many have said that his borderline senile facade is exactly that - the biog suggests that this is quite true.
I don't think that is the point. Whether he's senile, or just acting it for some strange and unfathomable reason (perhaps the Guinness mitigation?) it is the effect on F1 that is important. The market response to these court cases is beyond his control and that is what is important to any flotation.Whoever controls the rights has authority over the sport. Todt seems emasculated. The income from F1 stopped some time ago. The constructors, or some constructors, have been bought off and so FOCA is focaed, neutered as a force with any say. The only power source is the rights holder. At the moment it would appear that its plans are on hold awaiting some form of clarification over these cases.
I have no idea what might happen and I would suggest nor does anyone else involved. These are court cases and open to the winds of influence.
I would suggest, though, that the situation has hit the plans to float the rights.
If you had a few Euros in your pocket and were wondering what to invest in, would you consider F1? The most fundamental rule change in the sport's history is about to go live. No one has any real clue as to what this will do to it, whether there are enough teams to make a go of it. Ecclestone has been reported as having helped one team overcome a financial crisis. That, I would suggest, was an essential. If one team dropped out then the feeling might be that others would follow.
Merc was not, rumours suggest, overwhelmed by the way it were treated over the concord agreement.
F1 runs best when there is some form of control over disputes, some suggest better still when the influence is benign, although one wonders when that actually happened.
Ecclestone's story might be inspiring or tug at the heartstrings as much as any X-Factor contestant, but the fact remains, F1 is a global sport and having someone at the head of it who is being pursued through a number of courts is not what investors want.
We had Ecclestone's little me exposed in the papers as a person who buys women to beat and for a while he could not attend certain venues where shaking hands with people was a requirement. Then a very odd civil case decided that the theme was nothing to do with nazisim and everything was deemed to be above board and Sundays in church. Yet nothing had in reality changed. He was still what he appeared to be. Yet the smoke and mirrors meant he was back in the fold.
Ecclestone needs to be in this fold. That is if he wants to stay in it, which is not a given of course, and I feel unlikely.
We have just had India losing its GP for reasons that are not totally clear. This is counterbalanced to an extent by the suggestion that there will be 20+ races next season. But that is jam tomorrow, and this is with an entirely new formula.
This is not good for us. I don't think F1 as such is under threat but its potential is.
It is in effect a new formula next season. That alone is reason to be concerned. Add scandals and the result is more open to vagaries of circumstance.
miniman said:
I guess what I am observing is that whatever the outcome, it will be what Bernie planned. Whether that is good or bad for the sport is moot; I think that everything he does is carefully calculated regardless of the eventual "winner" or "loser".
I'm not sure Ecclestone is completely in control of what is happening at the moment. I am more or less convinced that he would have wanted to avoid the series of court cases, one of them probably criminal. He can't stop them, though. The image I get of of vultures circling. Or is it wolves, when they see an injured herd animal?Ecclestone is, of course, anything but a herd animal. Friends and associates with power and authority seem to be few. He's not needed them in the past but then there hasn't been a queue like that outside Balham tube station, all waiting for a piece of him.
There is the possibility, probability according to some reports, that the German case can be settled by way of an agreed 'fine' and there is no likelihood of imprisoning someone of his age and a court case will cost a lot of money. Further, that way both parties can put their own spin onto the outcome. I can't comment, I know nothing about the law in such matters in Germany.
The idea of Ecclestone pulling strings to have £multi-million lawsuits against him is difficult to support.
I doubt Ecclestone is on the ropes, but that he is not enjoying the processes would seem to be the most mild of assessments. I can't see any way he can make money from the current situation. I can't see any way it is helping with the value of the commercial rights, the sale of which has been put back a number of times. I can't see how selling the rights next season, with all the new regulations making it virtually a new formula, is a good idea.
I get the feeling something is about to be revealed about Ecclestone, and it will show the reason for all this rush for litigation at precisely this time.
What I can see is that the current situation, with so many unknowns, will hurt F1 when it might be at its most vulnerable for years.
im understanding if Ecclestone is convicted merc will pull out of F1 as they will not deal with criminals..
They have also apparently threatened F1 and interestingly the updated concorde agreement hasn't been signed by most teams either due to these court cases. If its true I don't know, but an alternative to F1 might be on the cards bypassing Ecclestone.
They have also apparently threatened F1 and interestingly the updated concorde agreement hasn't been signed by most teams either due to these court cases. If its true I don't know, but an alternative to F1 might be on the cards bypassing Ecclestone.
V8Dom said:
im understanding if Ecclestone is convicted merc will pull out of F1 as they will not deal with criminals..
They have also apparently threatened F1 and interestingly the updated concorde agreement hasn't been signed by most teams either due to these court cases. If its true I don't know, but an alternative to F1 might be on the cards bypassing Ecclestone.
From what I can understand, a conviction is not required. Just the criminal court case might be enough to stop him being 'in the road'.They have also apparently threatened F1 and interestingly the updated concorde agreement hasn't been signed by most teams either due to these court cases. If its true I don't know, but an alternative to F1 might be on the cards bypassing Ecclestone.
I don't see Ecclestone staying in any case. Once the float happens, if it does, then that will be it for him. If it doesn't happen then it might well be felt he has mishandled the situation as they might feel he has been the cause for the delay.
If the new formula is not taken up enthusiastically, then the value of the rights drop. It was not for nothing that the float was scheduled before the new season.
CVC has taken a vast pot of money out of F1 since they paid Bernie for his shares in the companies that 'run' F!. CVC borrowed the money and one believes are paying back a variety of financial institutions...in addition to selling off their remaining shareholding. The issue here is......does f1 have a successor to Bernie, somebody who understands the politics, the money and has the high level contacts he has. Maybe in 5 years time, but not today or tomorrow. bernie still pulls the strings and certainly one of these cases (in Switzerland) seems driven by greed and by people who were shooting way above their league. The German case is very different.....nothing wrong with offering a bribe......accepting it is a crime. They may find Bernie guilty of something but I doubt enough to upset Mercedes etc. The car companies need motorsport, they need the massive global coverage F1 offers and the future of the sport lies with one overall boss pulling the political strings......
As an aside anybody been following the sale of JMI (Zac Brown's sponsorship agency)? he turned down the Indy car CEO job, but has recently re located to London and I can imagine one or two organisations backing him as a possible figurehead for the sport. Am ex driver, business builder and somebody who understands F1 owners fragile ego's, car companies investments and exposure needs, corporate sponsorship costs, hospitality, TV and digital rights and has done big deals with financiers and major governments......just a thought!
As an aside anybody been following the sale of JMI (Zac Brown's sponsorship agency)? he turned down the Indy car CEO job, but has recently re located to London and I can imagine one or two organisations backing him as a possible figurehead for the sport. Am ex driver, business builder and somebody who understands F1 owners fragile ego's, car companies investments and exposure needs, corporate sponsorship costs, hospitality, TV and digital rights and has done big deals with financiers and major governments......just a thought!
belleair302 said:
CVC has taken a vast pot of money out of F1 since they paid Bernie for his shares in the companies that 'run' F!. CVC borrowed the money and one believes are paying back a variety of financial institutions...in addition to selling off their remaining shareholding. The issue here is......does f1 have a successor to Bernie, somebody who understands the politics, the money and has the high level contacts he has. Maybe in 5 years time, but not today or tomorrow. bernie still pulls the strings and certainly one of these cases (in Switzerland) seems driven by greed and by people who were shooting way above their league. The German case is very different.....nothing wrong with offering a bribe......accepting it is a crime. They may find Bernie guilty of something but I doubt enough to upset Mercedes etc. The car companies need motorsport, they need the massive global coverage F1 offers and the future of the sport lies with one overall boss pulling the political strings......
The lack of information is the main problem. Recent strategy seems to be short-termism. That, allied to any apparent succession planning is of concern.There have been rumours in the past but all of these have turned to nought.
I think you will find that the offering of a bribe is an offence in this country. The German legal system is a little different to ours I know, but my belief is that it is stricter when it comes to corruption offences.
The car companies do not, I fear, need motorsport unless other car companies participate.
Audi feel that motor sport gives them decent returns but they do not participate in F1. 22 races pa might see a number of car companies feel that F1 isn't for them.
That would not be the end of F1 of course, at least by itseelf. It's run without mainstream car manufacturers before, and successfully. Indeed, one FIA president, for reasons that were subject to rumour, put in place procedures that would have made their tenure all but impossible apart from as sponsors had not he been ejected.
Remember that F1 was not always the pinnacle of motor sport. In my youth sports car racing vied with F1 for that position. It wasn't until the 3-litre formula, or rather the Ford DFV being freely available, that secured its position.
Derek Smith said:
...
The car companies do not, I fear, need motorsport unless other car companies participate...
They might not need motorsport but they know know the benefits, very fast development is one of the main ones.The car companies do not, I fear, need motorsport unless other car companies participate...
That is why they go motor racing - the other benefits are a side effect.
They do not spend millions just because a.n.other car company does.
They do it because it will be good for them.
skeggysteve said:
Derek Smith said:
...
The car companies do not, I fear, need motorsport unless other car companies participate...
They might not need motorsport but they know know the benefits, very fast development is one of the main ones.The car companies do not, I fear, need motorsport unless other car companies participate...
That is why they go motor racing - the other benefits are a side effect.
They do not spend millions just because a.n.other car company does.
They do it because it will be good for them.
REALIST123 said:
Really? That's certainly not why they go into F1. I struggle to think of any F1 developed technology that has found wide use in road cars. I can think of more that have found their way from road cars into F1.
+ 1It's just done for publicity, why else would Red Bull and Benetton get involved in F1.
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