Formula One, as we know it today, owes everything to its creator. But at the age of 86, his reign had to end at some point. So perhaps ‘doesn’t exist’ is better explained as ‘wouldn’t have existed.’
In January 2017, the FIA (International Automobile Federation) agreed the sale of the commercial rights to Liberty Media for $8bn, thus ending Bernie Ecclestone’s ‘supremacy’ in Formula One.
“I was dismissed. This is official. I no longer run the company, my position has been taken by Chase Carey.” (Bernie Ecclestone)
Ecclestone was appointed Chairman Emeritus, an adviser to the board. A title he claims not to understand the meaning of. Leaving was always going to difficult.
Liberty Media has big plans for the sport. It wants to exploit digital media (much ignored by Ecclestone), attract more fans (particularly young fans), to increase TV ratings and promote rivalries. They also plan to expand in Latin America, while investing to secure the futures of valuable races (including Silverstone and Spa). They want to make each race in the style of the ‘Super bowl’ and make more of the build-up.
Big ideas for growth; in a sport that, up until now, saw its greatest expansion during the Ecclestone years – he made it one of the biggest TV sports in the world, rivalled only by the Football World Cup and the Olympics.
Born in 1930, the son of a trawlerman from Suffolk; Ecclestone’s career began selling second hand motorcycle parts with Fred Compton after the Second World War. He raced in the 500cc Formula 3 Series in the late 1940s and early 1950s – achieving some wins and decent placings – but it was in business that he was to find his forte.
In the 1970s, Ecclestone was running the Brabham team; the sport was popular but didn’t stand out against competition from other branches of motor racing. Commercially it ran on an amateur basis. When Ecclestone, Frank Williams, Colin Chapman and Ken Tyrell formed the Formula 1 Constructors’ Association in 1974 to represent their interests – all of this was about to change. Particularly their place in the growing market of television. Ecclestone negotiated with the circuits, TV and authorities; transforming the sport and creating for himself a position of absolute power.
By the early 1980s, Ecclestone had taken the random televising of a niche sport and turned it into a ‘championship’. This package meant that broadcasters could no longer cherry pick races, they had to buy every one. A format that other sports have since followed. As a result of this financial injection; the sport expanded, sponsorship money followed, and teams were bankrolled properly.
When he sold Brabham in the late 1980s, Ecclestone moved into administration full time. By the mid 1990s, he had taken over ownership of the commercial rights of Formula One from the other teams.
In 2000, he made a deal with Max Mosley – President of the FIA and long term ally – to lease the rights for 110 years in a deal worth $360m. It was a move that was great for Ecclestone and subsequent owners, but not hugely beneficial for the sport’s governing body. Many have also criticised the buying price as too low.
With greater global exposure, came demand for more races. Countries were very eager to host their own Grand Prix for promotional and PR purposes.
In 2003, the sport’s income was $729m and by 2015 $1.8bn. As Formula One grew into a colossus, Ecclestone went to great lengths to ensure that control was ultimately his; often only revealing business to the rest of Formula One, when it was already a done deal.
In 2011 he sold UK TV rights to Sky. The fans were outraged, but the teams were not complaining, as they immediately recognised the financial benefit. In 2019, Sky is due to get full rights in the UK, further compromising the sport’s long term popularity.
Ecclestone’s continually increasing costs are endangering fan’s favourite circuits. Silverstone and Spa are struggling to meet the cost of hosting Formula One and there is a risk of them having to withdraw from the championship. Though Liberty Media say they are aiming to make sure that they do everything that they can to save such popular venues.
Ecclestone has also been criticised for the prize money allocation being in favour of the rich teams and threatening the smaller teams’ futures. The strategy group (that he created) that makes the rules is run by the teams themselves and it is unlikely that they would vote themselves a pay cut to help the smaller teams…
The sporting formula is dictated by teams and Ecclestone is finding it increasingly difficult to be heard, his recent attempts – double points for the final race in 2014 and changing the qualifying format in 2016, were widely unpopular and quickly abandoned.
So, Ecclestone’s creation is now far too vast to be easily controlled by one man. And his desire to do so has made him unpopular with many associated with the sport.
He built this empire, by understanding the growing importance of television and the power that it could bring to sport. But a fall in viewing figures from 600m in 2008 to 400m today, suggests that the way we watch television is changing and in order for Formula One to continue to flourish – it needs to understand these changes.
Thank you Bernie for all you have done, we couldn’t be here without you; but even a great reign must come to its natural end.
Liberty Media have a fresh strategy.
A new era has begun.