Ecclestone, Horner and the future of F1
Red Bull Racing
Posted By: James Allen  |  27 Nov 2013   |  8:20 pm GMT  |  83 comments

“Christian would be ideal,” Ecclestone told reporters in Interlagos, when speaking of his successor as CEO of the Formula 1 Group. “I would be happy to hold his hand. We could have a transitional period. It needs someone who knows the sport.

“If someone comes in from outside, a corporate type, I don’t think I could work with them. It wouldn’t last five minutes.”

Was he serious? Why was he saying this now? The comments by the 83 year old, made on the eve of the final race of the season, have intrigued everyone who works in the sport.

And yesterday Ferrari’s Luca di Montezemolo dismissed it as one of Ecclestone’s famous jokes, “As the years go by, he more and more enjoys making jokes and I’m happy he still has the desire to do so…” the Italian said. One often overlooked detail is that, as a member of the new F1 board and representative of the Longest Standing Team, Ferrari, Montezemolo has a say in the appointment of a new CEO.

It was the first time that Ecclestone had publicly anointed a successor. Privately he is known to have suggested his in house counsel Sacha Woodward Hill as a possible successor in the past, but CVC has been considering a number of candidates from business figures known to their group.

Ecclestone has controlled F1 with an iron grip for over 30 years. His vision for the distribution of TV rights, building a platform of live mass market coverage globally, has turned F1 into a business with in excess of $1.5 billion turnover annually. This divides up into TV rights, circuit hosting deals and other sponsorships. But the media landscape is changing fast and F1 has been forced to go to some pay platforms in key European markets recently, like UK, France and Italy, in order to find the money. This has impacted on the total live TV audience size. The years that lie ahead present as many challenges as opportunities.

The skills needed to run a media business like F1 are quite different from running a team.

CVC, the main shareholder, which bought a controlling interest in the sport in 2006 for $850 million, has already seen a four fold return on its investment and if it is able to float the business eventually, as planned, it expects that to be a 10 fold gain. According to the Financial Times, “CVC’s preliminary investment review, drawn up after initial due diligence on F1, suggested it could exit ‘in a range of 10 to 14 times ebitda.’ ” (Earnings before interest, tax, depreciation and amortisation)

But the last two weeks have seen a torch being shone into the recesses of the sport, as first Ecclestone and then last week CVC’s managing partner Donald MacKenzie appeared in the witness box at the High Court in a $170 million lawsuit, being brought against Ecclestone and other parties (but not CVC) over the sale of F1 from Bayern LB and other banks to CVC in 2006.

And in MacKenzie’s testimony he spelled out quite clearly that, although CVC satisfied itself that the $44 million payments Ecclestone made to Bayern LB’s Gerhard Gribkwosky were not bribes to sell the company on his terms, he was clear that if Ecclestone is found by the courts to have acted illegally they will fire him as CEO.

“We said we need to think of a replacement for Ecclestone,” MacKenzie added in the High Court. “It won’t be easy. And we’re still thinking of one, trying to find one.

“There have been many, many times where I thought I was going to lose all my money, right up until 2012,” he added. “This company has been an alarming company to own.”

The question of who might succeed Ecclestone has been front of mind for many in F1 for years, as the ringmaster reached and passed 80 years of age.

It is interesting that he anointed Horner as heir; the pair have become close in recent years and Red Bull has sided with Ecclestone on a number of key battlegrounds.

It’s a mug’s game trying to second guess Ecclestone’s motives, as often they are things that no-one could imagine. But in this case the anointing of Horner served several purposes.

First, on a basic level, it drew significant media attention to the final race of the season, which risked being overlooked with the championship already decided.

It was also a strong statement of being in control, after MacKenzie’s comments about firing him if he has done anything wrong.

It also showed that whatever happens in the legal processes that lie ahead of him, Ecclestone believes he will be in charge of selecting and mentoring his successor.

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1

I think Michael Schumacher has potential to take on a role. He is very media savvy, very driven towards success, obviously has good negotiation skills and F1 is his life. Whether he would want to put his family through all that would be a big question. I can see Horners appeal, more so than Ross Brawns, hes an engineer not a salesman, but I believe the next head honcho will come from outside of F1 but with a Motorsport background. Whoevers running NASCAR would be a good change from Bernie as it would probably give the fans a lot more access.

2

Ferrari Guy #1: What is Bernie doing?

Ferrari Guy #2: He wants to market F1 to a younger audience so he’s practicing his hip-hop.

Bernie: East to the west and…er…back to the east yeeeah boy!

3

Surely more likely to be someone from an area such as the English premier league who is used to the demands of organising and pumping up of global tv contracts etc?

4

as he said himself, ‘if you’re going to point a gun to my head, make sure you have the balls to pull the trigger and make bloody sure there is a bullet in it.’ he doesn’t threaten he just does what he wants to. so horner is no bluff.

5

i think ecclestone knows exactly what his job is and is in the best possition to know which candidate can do the job well.

6

While it is undeniable the impact that Ecclestone has had on the sport and it is also easy to criticise him I do believe it is time for change. I have absolutely no idea who could replace him though. I have heard a few names banded around here and in other places but none of them seem convincing. The idea of promoting someone from within the sport seems a good idea on paper but there is far too much conflict of interest (not that that has ever been an issue for the sport in the past). Bringing in someone from outside the sport doesn’t seem like a great idea either, no matter how cut throat the business(s) they may be coming from are, I feel that that will pale in comparison to F1.

Will Bernie’s successor have anywhere near as long a reign as him? Will they try to get the teams to work together for the good of the sport or continue with his divide and rule approach? It would be great if they could try and give something back to the fans and finally start to incorporate the new media!

7

Taking Horner out of Red Bull would be appreciated by those who don’t agree Vettel is an exceptional champion. Technical and management/operational sides do matter a lot. Let’s see.

Dennis would be fine candidate. He knows the sport… and he is corporate type already. If he wills, he would probably have a chance.

Briatore. That man would make a show! There is a small problem with legal side. But it is all fixable in courts.

8

“Taking Horner out of Red Bull would be appreciated by those who don’t agree Vettel is an exceptional champion.”

The shortsighted?…

9

Bernie’s successor=Mansoor Ijaz

10

Well,

it looks like Mr. E is loosing it, and already is just a facade CVC is moving around, while the real movers and shakers quietly work in the background.

It is rather noticeable during Mr. E’s interviews, and now di Montezemolo’s seems to be politely dismissing him with his “joke maker” remark.

Personally, I don’t think Horner or Brawn would make a good bernie. Not even Ron Dennis 🙂 From the F1 insiders, only Tony Fernandes, perhaps?

11

The majority of these posts are hilarious, or perhaps delusional. Ross Brawn? Seriously? Ron Dennis? Really?

Folks, FOM is a media property whose principal revenue streams are television rights and live events fees. Managing this business has nothing to do with managing a formula one team.

And the assertion that Bernie will maintain control of succession is simply naive. The Board of Directors controls CEO succession and the Board of Directors is controlled by the voting shareholders, not Bernie, not Ferrari, not the FIA nor anyone else. Does Bernie’s opinion matter and does he have influence with the board? Of course he does as they value his experience and opinion. But in the end, Bernie does not control this decision.

12

James, what do CVC think about Horner? You say they have been considering a number of candidates but does that include Horner? I had a Google and all I could find is this article which comes from a paper I trust but it isn’t clear if the source is CVC itself as it just says it is someone ‘close to CVC’

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/privateequity/10193465/Ecclestones-successor-will-be-from-outside-F1-CVC-reveals.html

13

Is there any reason why Bernie might feel the need to do his friend, Christian, a favour by ‘singing his praises’ with the intended audience being Red Bull?

14

We he is hardly in a weak position at the moment – having just won the world titles for four years in a row

And from Red Bull’s statement afterwards, it shows that they weren’t crazy about the idea!

15

Firstly, anybody that refers to Redbull Racing as a drinks company is just plain ignorant. I’m no fan of the team, nor do I buy the beverage, but not only is Redbull Racing a legitimate F1 team, Redbull are involved in virtually every level of motor and extreme sport across the globe. They’ve also been involved in F1 for many, many years before buying a couple teams. So I highly doubt they’ll simply disappear once their good run comes to an end. Besides, what gives a car manufacturer any more right to compete in F1 than a soft drink manufacturer? F1 cars are about as related to road cars as they are to soft drinks.

Back on topic – we love to hate Bernie, but compare F1 to the state of MotoGP & WRC, each supposed to be the pinnacle of their respective genres. You have to give him credit, because even though the sport is going through a tough patch, we still have 12 proper teams, all building their own cars and turning up for every race. And interest in the sport is still at an unbelievably high level.

There may be challenges facing the sport, but if CVC have already seen a four fold return, they aren’t nearly as daunting as those facing the two other series.

16

@WarrenG

we still have 12 proper teams, all building their own cars and turning up for every race…

12 teams? I thought there were only 11 – several of which cannot pay their bills and are in serious financial difficulties, also viewing figures are in decline. But apart from that, it’s all going swimmingly 😉

17

EJ or Luca Montezemolo as Bernie successor LOL!!

18

Can’t ever see Bernie being serious about Horner – especially after the “this is silly” comment to Vettel in Malaysia.

19

Mr. Ross Brawn should be da man. Horner is still young and wanna get the best out of RedBull even with the four WDC and WCC. Ross is approaching sixty which is perfect rock solid portfolio. I don’t think for one bit Ross wanna go fishing yet.

No corporate moguls who just want to ride on Formula One for vanity sake, please! It wont last even for one minute.

Despite not liking Bernie at times we have to give him the credit he really deserves. For three decades he brought this sport to the highest level. Never had I dreamed of F1 prancing around the streets of Singapore and six races had gone by, for that I’d like to say ‘Thank you Bernie’.

20

He brought it to its highest level, past tense. That was a wee while ago now-Id say F1 firmly reached ‘peak oil’ and has been in decline for some time now.

Look at the manufacturers left. Technology, I dont see F1 cars much more advanced than they used to be. They used to have ABS & traction control and adjustable ride heights and all sorts of technical gizmos.

What have we got now? F1 cars that cant even work properly with the tyres they have to use.

F1 has duff access for fans in terms of modern media, and it aint even on free to air TV anymore.

The sport, business, personal feifdom is on its way down…

21

Bernie has been a dictator to the sport for 30 years so much so that he even has the gall to suggest he is irreplacable or naming his successor. Someone who’s questionable methods have landed him in a court no less – he is not in a position to judge any successor.

If F1 can’t replace an 83 y/o with a suitable successor then it has deeper problems than anyone realises . CVC need someone to take it to listing stage and beyond – introduce equitable business processes and ethics that work with a new structure- and oddly enough it will require someone who is VERY CORPORATE..quite the opposite of what Bernie is suggesting. Someone from the Football, IOC or even media.

I don’t think any team principal is suitable to be quite frank. Brawn has a passion for the sport and maybe not so much for the politics and corporate governance and marketing, Horner is more political but I don’t believe either is the marketing guru that F1 needs to open up new markets and strategies for CVC. In this regard they are not a Bernie by any stretch and they would be the first to admit it. But there be many others who have these strengths and really need to take F1 in a new direction while still returning profits to its shareholders.

22

too may political moves in f1 for my liking. ecclestone should stay a little longer and turn the show into a sport by getting rid of politics before he stepps down otherwise f1 will be controlled by deep pockets forever. let an independent court handle disputes.

i found this so funny.

http://www.dailymail.co.uk/sport/formulaone/article-2512119/Ron-Dennis-tried-convince-Mercedes-sign-Lewis-Hamilton.html

23

Horner is the smokescreen. Brawn seems more likely since he is leaving Mercedes & probably go fishing before taking up the role.

24

NO chance.

25

u know something. when u going to tell us.

26

Horner can’t even tell Vettel what to do. I imagine the massive, often highly dodgy individuals who deal with Bernie recognise a fellow shark when they see one. If they saw Horner it’d be like coming across a minnow.

Horner is a good team principal but he isn’t an executive, clearly a lot of Red Bulls calls are made by Mateschitz, Marko, Newey and, now, Vettel. Horner is part of a team and a good advocate for them but I don’t think he’d last five minutes in some of these meetings Bernie has.

Vettel chooses to ignore Horner when he wants to. He doesn’t ignore Bernie though.

27

Shark indeed. When I first saw the movie Snatch (way, way back), this character instantly reminded me of Bernie, just with lighter-shaded glasses:

http://tinyurl.com/feed-em-to-the-pigs

28

Ha brilliant, well if they ever do the Bernie Ecclestone story we know who can play him…

29

I find it interesting that all this successor talk is such a joke for Bernie. Companies the work over have some sort of senior-level succession planning in place, so why not in F1? Bernie qualified for his bus pass a long time ago.

I am also critical of CVC making four fold profits from their investment and not directing some of these back into the sport: how many teams have gone into significantly more dire financial situations since 2006? Where did all the manufacturers go? How long will the supporters of the series tolerate top talent being passed over for drivers with the better government or corporate connections? I get that this might open the sport up to new markets, but this comes at the cost of calling it the pinnacle of motorsport. When you see the influence of inferior series like NASCAR claiming they have the world’s greatest drivers, or WEC stealing the march on technology, F1’s position is being compromised.

F1s refusal to adapt to media is also becoming painfully apparent. While working from a marketing position of being exclusive and prestigious, the restrictive access will ultimately result in it being passed over for other sports and popular culture that permits the access required to be marketable. The Pay TV route is another barrier to entry: how many major sponsors have entered the sport knowing that their potential audience has been limited to those that pay for a subscription? Another near-sighted, short term pay off that F1 has exposed itself to. And for how much longer will governments be willing to pay for F1s presence with such diminishing returns?

Whoever succeeds Bernie will have their work cut out in more ways than one.

30

Go Bernie, go!

Weekend at Bernie’s – still kicking.

There is always a kernal of truth in what he says, and sometimes, great wisdom from the guy who know.

” … a corporate type, I don’t think I could work with them. It wouldn’t last five minutes.”

Praise be to Bernie.

Regrdless of what Luca says, and other misgivings, can anyone think of someone better to do the job than Christian Horner?

In other words, is there any potential Bernie replacement for F1 that would be in any way possible to succeed?

31

As Seebee points out, above: Ross Brawn and Ron Dennie; other potential contenders, in my mind.

32

If there is one thing Bernie is a master of, it’s deflecting attention away from the thing you should be paying attention to by artificially inflating the importance of something else.

Horner replacing him? How very unlikely – I strongly suspect that CVC would want someone compliant to their needs that can placate the F1 teams and work with them to increase the value of their asset. That doesn’t scream Horner, if I’m honest!

Brawn, however .. hmm…

33

If you read the full account of Luca’s statement he is being typically Italian and rather childish for a man of the position he holds:

Firstly he cannot imagine that a soft drinks seller can beat the great Ferrari and to have to negotiate in a major way for his team’s money with the current principle of that team is an anathema, how can they be worthy of negotiating with Ferrari?

Secondly he is chiding the stewards for their completely correct penalty to Massa after giving him several warnings, if Rob (Smedley) did not pass them all on it is a Ferrari problem not a stewarding error. But dangerously, he is listened to as a supposed statesman,he should behave like one and have a little dignity in defeat.

Really Luca, we suppose next you will want a separate starting grid position 20 metres in front of P1 at each track for the favoured Ferrari driver of the day. After all Ferrari are entitled to win every race! Veto rules they don’t like, take more money than anyone else simply for surviving to be worshipped!

Still next year you will have some driver problems to manage, good luck with that.

34

franed: “he is being typically Italian and rather childish …”

Oh my! Here we go again.

Have fun in stereotypeland!

35

I get tired of all this ‘F1 wouldn’t be what it is if it wasn’t for our dear old Bernie’

I think a lot of the paddock and jounalist need to get real. There are many business me who could do a better jo than Bernie. When nobody else has been given a chance, what makes them think he is the only way?

Personally, I think he has made as many bad mistakes as good ones. Such as the BBC / Sky sharing, tracks that are ‘the best thing’ one year, then dropped the next. And then constant bias towards teams and secret deals…. it makes the sport look very poorly run. Add to the fact the latest revealtions…

Do they wonder why there is a lack of sponsorship… would you bring your Blue Ribband brand to a sport run in this way… out with the old in with the new…

36

Bless…..you still think it’s a sport. It’s entertainment for marketing to TV audiences. Bernie has made it so and us Chief Ring Master of the circus.

37

And as a side note, what is this certainty that it was a sport to begin with? Many think that sport and entertainment are two different things when in reality they must co-exist for us, the spectators to be interested.

Was it always entertainment and they made people believe it’s a sport? Was it a sport that they made more entertaining?

I am past this discussion. Clearly, whatever it is, we watch it with joy, and it brings us happiness. We miss it when it’s gone. You’re proof of it by trying to fill your off-season time here, reading and thinking about F1.

38

And yet…we’re all still here.

39

Hahaha – I agree. My view, for what it is worth having followed the sport for 45+ years, is that there were very few people who could have done what Bernie achieved in taking hold of the sport and moving it forward from the tin-shed operations that existed under the previous regime to the professional, high value business operations that exist today. VERY FEW if any.

Having said that, I think he has outstayed his usefulness. I agree, some of the recent years have seen decisions that have apparently eroded value and taken the sport to the brink of disaster on several occassions. We need a younger mind with a grasp of the modern era (communications, media, new business models, changing attitudes of consumers and investors etc). But overall I think we need someone who also has passion for competition so that it is again seen as a sport rather than an entertainment business. Sure, entertainment is a bag part of perceived value but the core attraction should be the sport and close, exciting competition.

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