The latest spat revolves around Formula One patriarch Bernie Ecclestone, 70, who may or may not have suggested he was preparing to hand over control of some of his empire to a German TV company. With Ecclestone things are never simple. A soft-spoken, 1.62-m-tall former South London car dealer, Ecclestone took Formula One from a weekend hobby for racing enthusiasts to the world's most televised sport after the Olympics and football's World Cup. Since 1987 he has maintained a tight grip on the sport's commercial side.
Ecclestone, said to be worth $4 billion, runs a complex network that includes trusts set up for his children and wife. One of the trusts, SLEC Holdings, has the broadcast and commercial rights to Formula One until 2010. Last year, in what must be one of the most remarkable deals ever, the Federation Internationale de l'Automobile (FIA)—which regulates all motor sports—agreed to extend those rights for 100 years for a seemingly paltry $360 million. Last month the FIA demanded that Ecclestone make a $60 million down payment on the deal. Ecclestone countered with a claim that he was the victim of "extortion," saying he would pay the money in good time.
But the whole commercial rights deal is thrown into doubt by the complicated ownership of SLEC. Last year Ecclestone sold 50% of shares in the family firm to German broadcaster EM.TV for a reputed $1.6 billion. The sale also gave the German firm an option to buy a further 25% of SLEC. When EM.TV's share price collapsed in December, following insider-dealing allegations and the tech-stock fallout, majority owner Thomas Haffa found himself without the cash to complete the sale. So he approached German media firm Kirch, which announced it would buy a 16.74% holding in EM.TV to save the deal. If EM.TV and Kirch manage to raise the $1 billion needed to buy the remaining 25% of SLEC, then they could take control of Formula One. Since Kirch would likely take the sport to pay-per-view TV, it could all but disappear from screens around the world.
But there is an escape clause in the fia contract that allows the federation to cancel if it decides the commercial rights holder is not suitable. If that happens another company could be invited to bid for the rights, says fia president and long-term Ecclestone friend Max Mosley, "maybe even one run by Bernie Ecclestone."
Mosley said last week that he would prefer that a newly created consortium of European carmakers—Fiat, DaimlerChrysler, Renault, Ford and BMW, which already have a big stake in Formula One—buy the SLEC shares. "The manufacturers would bring stability," he said, "and are easier to deal with from the fia's point of view because they are looking at the bigger picture."
Is the spat between Ecclestone and the fia an elaborate charade to reassure E.U. competition Commissioner Mario Monti that Formula One is openly and fairly run? In June 1999 the European Commission began an inquiry into "a conflict between the legitimate role of the FIA ... and its interests in the commercial side of motor sport." The E.U. was particularly concerned that the fia had sold the exclusive Formula One commercial rights to its own vice president for commercial affairs, one Bernie Ecclestone. In response, Ecclestone resigned his position and the fia gave up its commercial interests in Formula One. Monti now seems content. He recently announced that the new arrangements "seem to us to amount in principle to a satisfactory solution."
With the European Commission happy, Ecclestone can focus on what he does best: promoting Grands Prix across the world. Calcutta and Moscow could host events in 2003, with a dozen other places queueing up for their shot at racing glory. This family feud might be settled amicably after all.