Stalling F1 profitibility and lack of sponsorship money to be discussed
Formula One’s board of directors will be told to plan for life after Bernie Ecclestone in a landmark report on the crisis-ridden sport.
At a meeting of Delta Topco this week the board of F1‘s parent company will be shown a dossier on the state of the business amid a backdrop of about-turns on regulations, squabbling among the teams and wild criticism of the product from Ecclestone himself.
The Daily Telegraph understands that the report, written by Jean-Marc Huet, the former financial director of Unilever and F1 board member, will address the sport’s stalling profitability and lack of sponsorship revenue, as well as the roles of key personnel, including planning Ecclestone’s succession.
F1 World Champion Lewis Hamilton during testing for this year's series in Spain earlier this month. Picture/ AP.
It is also likely that Ecclestone will face censure for trashing Formula One on the eve of the new season, saying in a newspaper interview that the sport is the worst it has ever been and he would not pay to take his own family to watch a race. However, the board is as unable as anyone to control Ecclestone.
Although many in the sport are aghast at Ecclestone’s recent comments - including Dieter Zetsche, the boss of Mercedes-Benz - the 85-year-old’s position appears secure as long as CVC Capital Partners own a controlling stake.
Donald Mackenzie, the boss of the private equity firm, is a huge admirer of Ecclestone and despite the bewilderment of some of his colleagues, has been steadfast in his support of F1‘s chief executive. But Mackenzie does not want his company dragged into the limelight.
Just over a year ago Mackenzie wanted to bring in Paul Walsh, the former boss of Diageo, the world’s biggest spirits producer, to run the sport alongside Ecclestone, but was talked round by Ecclestone.
Mackenzie also stuck by Ecclestone throughout his bribery trial in Germany - he denied any wrongdoing throughout and paid $100million (pounds 60million at the time) to end the case - in 2014.But the lack of a clear successor has left the sport in a state of limbo.
Ferrari F1 driver Kimi Raikkonen of Finland drives past the sunset during the second training session at the Yas Marina racetrack in Abu Dhabi, United Arab Emirates, in November. Picture/AP.
CVC shelved plans to float shares on the Singapore Stock Exchange which cannot be revived as long as Ecclestone is in post, according to legal advice given to F1‘s board by city firm Freshfields two years ago.
CVC declined to comment when quizzed on the report.
But Ecclestone confirmed last night: “At the last board meeting we said somebody should have a look, and see if we’re doing things right, and if we want to make some changes.”
Asked what it would address, he added: “State of the business, people perhaps.”
Despite there being two more races this year - the return of Germany and the introduction of Azerbaijan take the calendar to a record 21 rounds - the sport is not expected to be any more profitable for CVC.
That is in part because they will have to pay out a pounds 50million prize-money bonus payment to Mercedes for winning back-to-back championships. The sport raises revenue of around pounds 1billion a year, with approximately pounds 650million going to the teams.
CVC faced an approach last year from a consortium led by Stephen Ross, the billionaire owner of the Miami Dolphins American football team, to buy the sport but it came to nothing.
There is also the prospect of an intervention by the European Union competition commission into the way the rules are drawn up.