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Ecclestone enters the court in Munich: In what state will he leave it?
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Posted By: James Allen  |  24 Apr 2014   |  9:10 am GMT  |  42 comments

F1’s commercial supremo Bernie Ecclestone will appear in a Munich court this morning on the first day of his bribery trial, that is expected to last well into the Autumn. The case, slated to run for 26 days, will run for months as the judge has scheduled a limited number of days in court each week to allow Ecclestone to continue to run the multi-billion dollar F1 business from his office in London.

What’s behind it?
The 83-year-old is accused of paying German banker Gerhard Gribkowsky around £26 million in bribes in 2006 in order to smooth the sale of his bank’s shares in F1 to Ecclestone’s preferred buyer, CVC Capital Partners. Gribkowsky has already been found guilty of corruption, tax evasion and breach of trust and is serving and eight-and-a-half year sentence. He was convicted by the judge who will preside over Ecclestone’s trial –  Peter Noll.

What are the likely arguments?
Court papers released last week ahead of the trial show that prosecutors intend to prove that Ecclestone paid the money because he feared losing his grip on the sport he had built up since the late 1970s.

Ecclestone, however, believes he has a strong defence. Central to his rebuttal of the accusations is his insistence that the money was paid because Gribkowsky was blackmailing him about his UK tax affairs. However, this was dismissed as “implausible” by a London judge last Christmas, during a separate civil hearing into whether the payment from Ecclestone to Gribkowsky had lowered the value of a stake held by a firm called Constantin Medien.

Ecclestone won that case, but at a cost to his reputation and his standing going into Munich. The judge in the London High Court case describing Ecclestone as an “unreliable witness” and confirmed that the F1 chief had made “an illegal payment”. Ecclestone responded by saying that the judge had not heard the full story, which he believes will come out during the Munich criminal trial.

According to German media sources, around 40 witnesses, including Gribkowsky himself, are expected to testify, with Ecclestone’s own testimony, which could come in the early phases of the hearing, likely to be the highlight.


What happens if…?
CVC’s managing partner Donald Mackenzie has said that Ecclestone would be replaced if he were found in Munich to have done anything illegal. CVC is believed to have earned over £5 billion out of F1 in eight years and plans to earn more in the coming years, regardless of whether Ecclestone is convicted.

Whatever the outcome of the trial, Ecclestone has said that he plans to step back from running F1 full time and take a more strategic role in due course. The Daily Mail wrote last week that Ecclestone’s in-house lawyer Sacha Woodward Hill is set to fill his shoes while he is in court, but not as a long-term successor. She was his preferred choice, before he appeared to anoint Red Bull boss Christian Horner. Horner has distanced himself from the idea and in any case Ferrari has a right of veto over Ecclestone’s replacement as CEO and it has said privately that it would exercise it if Horner were formally proposed for the role.

It is now thought that Ecclestone’s successor will come from outside F1 and will be backed by a younger management team, which will feature some bright talents from the current F1 paddock in areas like sponsorship, rights negotiation, team and FIA mediation.

It is noticeable that with the uncertainty surrounding Ecclestone’s future – and therefore the commercial direction of the sport – some big beasts from F1’s past 40 years have started to reassert their influence the sport, with Ron Dennis returning to McLaren, Niki Lauda at Mercedes and Luca di Montezemolo, Ferrari’s president, saying this week that he planned to spend a lot more time in F1.

Without the strong hand of Ecclestone many fear that F1 could degenerate into a land-grab by powerful figures from the various corners of the sport. The flip side of that is the possible appearance of a more joined-up approach that builds on the already huge popularity of the sport, takes it to a new level and derives more income from a wider audience via new content distribution strategies.

The next few months will be fascinating.

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42 Comments
  1. Random 79 says:

    “Gribkowsky has already been found guilty of corruption, tax evasion and breach of trust and is serving and eight-and-a-half year sentence. He was convicted by the judge who will preside over Ecclestone’s trial – Peter Noll”

    Cue the ominous music…

    1. Gaz Boy says:

      Jaws theme tune?
      Hate to use a metaphor about sharks, but……

      1. Random 79 says:

        That’ll work :)

  2. AndyFov says:

    Ferrari have a say in the selection process? Ah, so that’s why Stefano’s made himself available? ;)

    1. Random 79 says:

      Because Jean Todt worked out so well for them ;)

      1. AndyFov says:

        On balance they’re perhaps better off focussing on engineering rather than politics then.

        That’ll call for a seismic shift in operations at Maranerllo.

      2. Random 79 says:

        Agreed.

        If all the teams just focused on making their cars go fast instead on screwing each other I think half their and F1′s problems would be solved.

  3. Gaz Boy says:

    Didn’t the UK Civil courts declare that Mr E had been guilty of corruption?
    Still………..I won’t comment, I don’t know how the German justice system works. What I do know is the Germans, like most Northern Europeans, have very low corruption in their nation as they like business to be done with transparency – that surely must count against Mr E.
    Watch and wait…………….

  4. PxB says:

    Well, anyone looking to put a management team together will be spoilt for choice.

    I guess it’s just a coincidence that Messrs Whitmarsh, Domenicali and Brawn are all at a loose end right now?

  5. kenneth chapman says:

    this case is quite fascinating and the outcome will certainly have repercussions for some time.

    what i fail to understand is this. if the grib was found guilty of accepting a bribe and subsequently jailed then the only other person involved with the transaction surely by logical extension, must have paid the bribe!

    maybe this too simplistic and i’m sure some of the legal experts here will enlighten me in due course. if ecclestone is found not guilty of paying a bribe then will the grib be pardoned?

    1. MikeW says:

      Logic and the law are two different bedfellows.

  6. The Spanish Inquisitor says:

    He need to pay his lawyers so he will leave …. as rich as he enter….

  7. Stuart Harrison says:

    It’s hard to get any sense out of Bernie at the best of times, I can’t see how a court of law would stand much chance when Bernie has so much to lose.

  8. james stringers says:

    Great piece James. It will be fascinating to hear Bernie’s performance at the testimony. I’m sure he’ll get the last laugh one day through his best-selling memoirs!

  9. Kyle says:

    I didn’t know it was the same judge that sent whathisname away. I think he is going to be eating porrige. Could be good for the sport, could also be very bad. Time will tell.

  10. justafan says:

    Looks like the dogfights behind the scenes will be more interesting than the on-track-action.

  11. Mitchw says:

    I can’t wait to see old Bernie beat the law. He’s guilty as sin, abused the Trust just as Grinkowski knew and twisted his arm about. And all this makes me cheer for the tiny terror.

  12. franed says:

    We seriously need to know the conditions of the 100 year lease of the commercial rights.
    There may well be adequate grounds for calling breach of contract.
    The financial structure of the sport desperately needs to be re-organised from top to bottom so as to allow the circuits to flourish and ticket prices to be lowered to merely outrageous. Currently the year’s circuit earnings all go to support the GP.
    This needs to happen before sponsors discover the limited life of the current indiviual deals that replace the CA.
    However the EU Commission made it plain that the commercial rights may not be operated by the owner (FIA) We need the money to stay in the sport, an FIA Trust perhaps?

    1. Steve Zodiac says:

      Ummm, seems to me that with this corrupt business along with the new crap cars, pay drivers and the utterly outrageous costs of running a GP that F1 is knackered and on it’s last legs. Maybe it’s time to start something new, still high tech but faster, noisier and fairer.Before the costs (which seem to be mostly for enriching certain people rather than to improve the sport)got out of hand, we had, testing days to go to all year round, we had lots of pre GP practice, we had unlimited running during qualifying, we had F1 warm up on Sunday morning and we had exciting races.

  13. hippyneil says:

    Rich old white men do not go to jail. This much we know.

    If found guilty, he will most likely be fined (some spurious amount that will sound a lot but won’t really make a dent in his wealth and/or be covered by CVC/other partners) and possibly “banned” from being in charge of anything again.

    If not,I foresee a lot of muck-raking going on over the next few months and I’m sure we’ll get some juicy stories that may contribute to the end of Ecclestone’s reign by themselves.

    Either way, I think it may be difficult for him to carry on, certainly in the way he has previously anyway.

    What will be interesting to watch is the power play that will rise and dip as the trial goes on and whether people will think he will be convicted or not.

    I think it’s unlikely his replacement will be from a team so don’t look at Horner and co as wanting his job. In fact I don’t think they do. They just want to be in the best position to exert as much influence on whoever takes over as they can and people like Dennis and Montezemolo have fenced with Ecclestone for so long they may think they’ll have an edge over them.

    On a lighter note, I think this would make a great Judge Judy show. She doesn’t take any bull from anyone.

  14. Richard says:

    I think the time for Bernie to “retire” is long overdue, and I think it quite lightly it may end up a forced retirement. If Bernie is found not guilty of bribery surely that must reflect on the recipient. All depends on how convincing the “full story”is!

  15. Bart says:

    If Bernie’s not allowed to run the sport anymore, I do hope they find someone sensible and strong enough to withstand pressure from Stuttgart, Maranello, Woking and Austria

  16. Paddy says:

    Means nothing if the racing is boring….

  17. Gareth Jones says:

    He won’t go down – He’ll bribe the judge !

  18. Jota180 says:

    Trying to unwind and make some sense of what Bernie did or didn’t do,say,pretend/bluff will be near impossible for the court IMO.

    I was watch a film last night about the 500cc motorbike grand prix riders of the 80s.
    At one point Kenny Roberts recalled a meeting with Bernie.
    Kenny at the time was riding for Yamaha but not being offered the deal he thought he deserved for the following year, he had very little leverage with Yamaha as the seats at Suzuki and Honda had already been taken.
    When Bernie heard, he told Kenny to come to the next F1 GP as a guest of Brabham and have dinner with him and his lawyer where everyone would see them. The following morning Kenny wandered into the Brabham pit and was chatting with Bernie, as they parted, Bernie gave him an envelope which Kenny just pocketed.
    There was nothing in the envelope but it did the job, tongues were wagging that Kenny would be Brabhams #2 driver the following year. Yamaha substantially upped their offer to keep Roberts for another 2 years

    1. H.Guderian (ALO fan) says:

      hahah!!!
      Great story.

    2. Alex says:

      And what did Bernie earn or gain of that? I’m sure he didn’t do it as a favor.

      1. Jota180 says:

        Apparently he did, just to help KR
        That and the enjoyment of simply doing it.

  19. Phil Glass says:

    From what we’ve heard so dar, Sacha sounds a lot more competent than any other names touted as future F1 supremos.

    If she does a good interim job, why look beyond her?

  20. Harvey says:

    If Bernie paid a paltry 26 million pounds as a bribe because Grib was blackmailing him over his UK tax affairs, you have to wonder how much Bernie is hiding in offshore accounts, Swiss banks, daughters’ bank accounts etc. Why isn’t he on trial in the UK for tax evasion?

    1. Gaz Boy says:

      It’s because since Brown and Blair came in circa 1997, New Labour and now the Con-Dems will bend over backwards to appease and placate dodgy billionaires who, ahem (cough) “reside” in the UK.
      Don’t ask me why, that’s just how it is.

  21. patrick says:

    Hang on in there Bernie,
    D-Day was seventy years ago…
    The Best of British Luck!

  22. Peter Freeman says:

    If he is found guilty, then I would like to see an enquiry into HOW the FIA sold him rights for 100 years in the first place. 100 years is not a reasonable deal to make. If one bribe has been paid, has another? Right now the fact that the sport does not own it’s own rights to make money out of its self is very damaging. How many years are there still to go before the 100 are up?

      1. Sebee says:

        Another words, Bernie has to start planning the renweal negotiations.

      2. Random 79 says:

        Just be sure to keep us posted :)

  23. foreverf1 says:

    While an Englishman is tried in a German court, an Italian wields all the power in F1.

  24. sej82 says:

    I like Bernie Ecclestone, I’ve watched every GP since Fuji in ’76 and much of my F1 enjoyment has been thanks to him. I hope he gets off this charge, and who knows he just might. Remember, this is the man who gave the ruling Labour party a £1 million ‘donation’ to help F1 get an exemption to the ban on tobacco advertising – and then amid the controversy the Labour party had to return his money. What a result!

    I’ve enjoyed following Bernie’s managerial manoeuvering sometimes as much as the racing, but it’s time we had someone new in charge.

  25. roberto marquez says:

    A lot of people complain about Bernie s doing,but I think the sport and specially its international coverage owe him quite a lot.I hope we will not miss him in the near future;that he made a lot of money doing it ,that is part of his ability please do not envy him for that.

  26. Matt says:

    Doesn’t Gribkowsky’s conviction paint him as an unreliable witness?

    1. Random 79 says:

      He can be as reliable as you want, it just depends on how much you’re willing to pay him ;)

  27. kenneth chapman says:

    if, as bernie states, he was ‘lily white’ and had no case to answer if the british inland revenue went for him then why pay the ‘grib’ $44million in blackmail fees?

    bernie would have us believe, vis-a-vis his payment, that this was cheaper of the routes to be taken. therefore he was expecting the costs to defend his position as being in excess of $44million? that is an awfully high legal bill. i know that barristers are ridiculously rewarded but this seems to be over the top.

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