Ecclestone's plan for float divides paddock

BERNIE Ecclestone's plans for a $10 bn flotation of the sport leaked into the paddock only hours before the start of the Australian Grand Prix.

190312Bernie Ecclestone

THE war of words over the future of Formula One has turned into a full-blown battle as Bernie Ecclestone's plans for a $10 billion flotation of the sport on an Asian stock exchange leaked into the Melbourne paddock only hours before the start of the Australian Grand Prix.

The proposals immediately sparked anger, with one senior team executive describing them as "outrageous" and "against every facet of European competition law".

The commercial future of F1 was always going to be a contentious issue, with negotiations under way to renew the Concorde Agreement, the deal that binds the 12 teams to CVC Capital Partners, the sport's owners and Ecclestone's employers.

Ecclestone's strategy in the past has been one of divide and rule and the plan for flotation has his fingerprints all over it. In Melbourne on Sunday, there was suspicion that the leak was a ruse to flush out opposition.

The proposals include giving Ferrari, the oldest surviving team in F1, a seat on the board of a new holding company. That is likely to be taken by Luca di Montezemolo, Ferrari's president, while another seat would go to Dietrich Mateschitz, the billionaire owner of Red Bull, the present world champions.

But there are no places for McLaren, the next most senior team in the paddock, or Mercedes, one of Formula One's biggest investors.

Red Bull and Ferrari both walked out of the Formula One Teams' Association at the end of last year claiming that they were unhappy with discussions over the so-called Resource Restriction Agreement, a device to cut costs among the teams. But that display of petulance now looks like little more than a smokescreen to cut free and negotiate directly with Ecclestone as he tries to win over a substantial majority that will render resistance useless among the rest.

Ferrari were not prepared to comment, although rival teams insisted they had already leapt into bed with Ecclestone, who sees the Italians and Red Bull as key to his control of the sport.

"We are obviously in discussion about a future Concorde Agreement," Christian Horner, the Red Bull team principal, said.

"We want one which reaches into the future but we are in discussion with FOM [Formula One Management, the present holding company] at the moment. A flotation is really down to the shareholders. It is not really the teams' business. It is more of a question for Bernie or CVC. Talks have been progressing reasonably well, so we will see."

Despite numerous threats to abandon F1, Ferrari has been quick to accept Ecclestone's blandishments, just as they did during negotiations over the last Concorde Agreement as soon as a $100 million inducement was offered.

Mateschitz is also relatively easy to cultivate as an associate of Ecclestone's. The question is whether resistance by the other teams is futile.

Toro Rosso, Red Bull's sister team, will vote the way Mateschitz decides, while it is thought that Williams, Sauber and Caterham might also join the Ecclestone side. That splits F1 down the middle in what could be a thrilling season when the focus should be on racing, not politics.

"Formula One stopped being about racing a long time ago," one disgruntled team principal said last night (Sunday).

"There will be an end game to this. We just have to figure out what it is and what it means for the people in the teams who want to go racing and not be involved in this kind of thing."

Significantly, a flotation would also prepare F1 for life after Ecclestone because a chief executive of a new holding company would have to be appointed. Ecclestone would undoubtedly take Formula One into the new era but the newly-floated business would be able to groom a successor.