Bernie Ecclestone Formula One wheeling and dealing hits snag

A High Court hearing this week may eventually prove the end of Bernie Ecclestone’s reign as Formula One’s kingpin.

Bernie-Ecclestone

THE plot was hatched at The Rib Room, a swanky restaurant not far from Harrods. Three men sat down to lunch to discuss the numbers and how much it would cost to cut a deal.

Bernie Ecclestone, Formula One's all-powerful chief executive, did the talking with Stephen Mullens, the family lawyer, at his side. Gerhard Gribkowsky, the chief risk officer with Bayern LB, then F1's biggest shareholder, was asked his price: it was $US45 million. The deal was sealed and, at that moment, the intricate web that Ecclestone had weaved around F1 started to unravel into a series of destructive legal challenges.

Ecclestone is Formula One. For nigh on 40 years, nothing has moved in the sport without his knowledge. He has signed the deals, hired the circuits and dug into his own pockets to bail out profligate team owners. Being responsible to banks and boardrooms was always too constricting. He told me: "There was a time when people were in trouble and I helped them out. Now it is all about lawyers and pieces of paper. You can't do anything."

But the age of the one-man band is almost over and the decision on what happens next lies with Donald Mackenzie, almost unknown in the sport that his business bought in 2006 - the deal that triggered Thursday's High Court judgment. Mackenzie, tall and balding, is chairman of CVC Capital Partners, which owns the controlling interest in F1, and has made as much as £4 billion ($7.4bn) from the sport.

Mackenzie was a director of Kwik Fit, but Ecclestone is a problem that he has been unwilling to fix. The time may have to be now: the £84m damages claim brought by Constantin Medien, a German media company, against Ecclestone, Mullens and Bambino, the Ecclestone family trust, over the sale of F1 was dismissed on Thursday, but there are no winners from this dispute conducted by a legion of expensive lawyers.

Ecclestone was not in Court 17 of the Rolls Building at the Ministry of Justice in London on Thursday to hear the judgment, but he claimed victory. A statement said: "Mr Ecclestone has always known that this claim was brought for opportunistic reasons and despite many approaches from Constantin, he was resolute that he would not settle this case out of court.

"Mr Ecclestone is delighted that this thoroughly unmeritorious claim has been dismissed."

But the collateral damage inflicted on Ecclestone could prove crucial. It is deeply detrimental to have a High Court judge condemn Ecclestone as "untruthful and unreliable" in the witness box and to find that he bribed a bank official to smooth the sale of F1 to CVC, described as "congenial" because they guaranteed that he would hold on to control of his sport.

Over almost two months late last year, Philip Marshall QC, for Constantin, picked over the financial entrails of F1, uncovering a parallel universe of dealmakers, lawyers, accountants and promoters who dealt almost casually in tens of millions of pounds.

Ecclestone had been accused by witnesses for the claimant during the trial of acting like "a lord of the manor", refusing to allow the banks, when they were shareholders, and CVC near his fiefdom, using business methods that were "not transparent and, on occasion, in a very grey area".

Modern business does not allow for lunches to plot backhanders. Businessmen now have to obey the strictest codes of conduct. Mercedes, one of F1's biggest teams that upholds the highest corporate standards, has been nervous about this High Court case and the upcoming corruption trial in Germany that Ecclestone must face in April. They may also exert pressure on Mackenzie in the coming days.

Mackenzie's dilemma is that there are few recruits he can turn to. Even on Thursday, as Ecclestone faced the possible loss of a sport he has nurtured, making billions along the way, he was on the phone to journalists, still wheeling and dealing. He is irreplaceable.

THE TIMES