Bernie explains and gives F1 pause for thought

Bernie Ecclestone’s interview in the Times last weekend has brought a furious response from politicians and virtual silence from the F1 community.

Most people in F1 don’t really want to get drawn into it, as they argue he shouldn’t have allowed himself to be in the first place.

What most people don’t understand is why he did the interview. He didn’t appear to have a key message to sell, such as “I know the breakaway threat looked bad, but F1 is now in the best shape it’s ever been in, ” or something of that kind.

There are suggestions that it may have been to help his old friend and colleague Max Mosley and suggestions to the opposite. It certainly aroused some uncomfortable memories of last year’s News of the World headlines and their Nazi association, which Mosley successfully challenged in court.

But actually I think what has happened here is extremely timely in the current debate about F1 and what direction it should take next in terms of governance.

Ecclestone has spoken to Bild newspaper, the German equivalent of the Sun to say that he has been misunderstood,

“All this is a big misunderstanding,” he said. “In the interview we were talking about structures and that it can sometimes be good to act and make strong decisions without reservation. I wasn’t using Hitler as a positive example, but pointing out that before his dreadful crimes he worked successfully against unemployment and economic problems.

“It was never my intention to hurt the feelings of any community. Many people in my closest circle of friends are Jewish.”

Ecclestone himself is Jewish and on his Saturdays off he can be seen in a very famous London cafe with his largely Jewish friends, drinking coffee and discussing.

Although he has got into trouble for choosing some poor examples to illustrate his point, he seems to have been trying to make the wider point that democracy is on the wrong path, that politicians today are more concerned with their image, distracted by the 24 hour news cycle, than they are with getting things done. He believes that the best system of government is where people put their faith in dictators and trust them to make tough decisions and get things done.

In this his start point is his own experience in motor sport and it has some interesting reflections on the current situation in F1 with an uneasy truce currently in place between the teams and the men who run the sport.

It has been proven over the years in motor sport that the best way to run a racing series is by a ‘benevolent dictatorship’. This is true at all levels. Someone needs to get things done and make decisions and the rest abide by them. Series run by the teams themselves don’t really work, like CART in the USA for example.

F1 is where it is today because it has been run by a dictatorship and for many years the team owners like Ron Dennis, Frank Williams and even Luca di Montezemolo were quite happy to go along with it because their series became the biggest motor sport show on Earth.

But now times have changed and that is what the F1 power struggle is all about.

The key to it is the ‘benevolent’ bit. If a tough, strong, but fair leader is in charge then things get done and it works, as long as everyone is treated equally. The teams feel that this is no longer the case and they are highlighting instances like the selection of new teams, (with today’s allegations in the Telegraph that having a Cosworth engine contract was a requirement for entry) to show that this system of governance has gone down the wrong track.

What the F1 teams want, motivated by the manufacturers, is a more democratic F1. This is why Max Mosley’s message to the FIA members is that their institution is under threat because the Formula One Teams Association thinks it can run the sport itself. History would suggest that it would be a mistake for them to try to do that and I think it is what Bernie was trying to say (obliquely) in the interview with the Times. But the problem is, he chose some bad examples to illustrate his point.

His words have hurt many people it seems, but I think what will hurt him about this episode is the impression that he is out of touch, an accusation levelled at him over his response to the racism incident where Spanish fans mocked Lewis Hamilton.

The interesting thing will be whether anyone in F1 seeks to capitalise on this episode or whether the teams will remain focussed on Mosley and his ‘retirement’ in October.

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Why did Honda turn Bernie down?

Interesting tale in the News of the World today, where Ian Gordon has managed to get an exclusive with Bernie Ecclestone on how the Honda management team turned down his offer of financial help with their buyout of the team.

Bernie has done a series of ‘exclusives’ lately; with the FT, the Telegraph, the Express and now the NoW. The Times has been his channel of choice for years, but he now seems to be spreading it around a bit more.

This story is interesting because in it Bernie reveals that he proposed putting up some of the money to back the management buyout in which both Nick Fry and Ross Brawn would have taken 17.5% of the equity in the team. The value of Ecclestone’s offer and the percentage he would have received are not revealed. A figure of £100 million is mentioned as the cost of competing this year, but they will be able to do it for less than that, if they have to, and there is no suggestion that’s what Bernie offered. I would be sure the figure he had in mind was less than a third of that. It’s all a bit Dragons’ Den, where every now and then the money man gets turned down by the poor soul pitching his business idea.

So why did Honda and the buyout team of Brawn and Fry turn it down, and was it as simple as that anyway? Well you can be sure that it must have had a lot to do with the strings attached. One aspect of the deal which Gordon highlights is that a share of ownership of the team would have given Ecclestone the right to access to the Formula One Teams Association, which has been holding private meetings to discuss how ultimately to improve the show and get more money out of Bernie. I’m sure he’d have loved to see all the minutes of those meetings.

An aggrieved Bernie told NoW, “I tried to help with the management buy-out. They should have taken what I offered. It was a very good offer for everybody concerned. It gave them complete protection but they wanted to do things on their own. Now all we can do is hope and pray!”

As I mentioned in my post on Virgin, Bernie will still be involved in the deal if it goes that way, because Sir Richard Branson has made it clear he’s sticking pretty close to Bernie through all of this and he will want some assurances. Branson had his say on BBC Radio the other day, now Bernie has chosen this moment to break the story about his rejection. This must be significant, why would he do it otherwise?

I think firstly it is his way of showing that he has tried his best to save the team and that it’s not his fault if it fails. A bit like Donington and the British Grand Prix. He’s taken to doing this kind of pr appearance where he says “I’m doing the right thing, I’m the good guy here” a lot more lately, especially since he took such a hammering over the story about racism being ‘a joke’ late last year. He wants to show that he’s a strong chief executive – standing at the bridge and steering the ship through the stormy waters.

But his intervention in NoW also has to do with putting pressure on Honda at what is now a critical juncture in this process. They have had chances to save this team, he is saying, they still have chances to save it and do the right thing. But in his words they need to “make up their bloody minds.”

They do indeed.

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