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The art of Bernie-watching

November 30, 2011 by Joe Saward

Bernie Ecclestone is an extraordinary character and if you want to have any chance of understanding the way he operates you should read the first five chapters of Susan Watkins’s book called “Bernie”, which is published by Haynes. It has a really splendid foreword by Sir Frank Williams, which sets the tone and then goes into wonderful detail about where Bernie came from and how his character was formed. It slices through the myths. There may be elements of the story that have been left out, but that is not the point. Watkins tries to show Bernie’s character as it really is. I have read all three of the current Bernie books and I think Susan’s is better than Terry Lovell’s, although his is a fascinating work in other respects. I think that Tom Bower’s overblown but widely-distributed tome comes in rather poor third.

When Bernie says something to the media, there is almost always a reason for it to be said. Bernie does not chit-chat much. He sizes up the person he is talking to and decides what message to deliver.

He is usually trying to put pressure on another party in a negotiation, or he is trying to create a smokescreen around something he is up to. In this respect he is a magician. He creates a flash-bang in one direction and everyone looks the wrong way. For some years I used to think that when Bernie said something, the opposite was usually the truth. Thus, based on his recent comments, if I were to say which races will happen in 2012 I would say that we will be in Korea and Austin, but we will not be in Bahrain.

Let’s check back on that in a few months and see if that was true or not.

Sometimes Bernie says things deliberately for effect. Calling Danica Patrick a domestic appliance was one way to get F1 mentioned in the US newspapers. Some would argue that any publicity is good publicity, others would say that negative publicity does one no good. I guess that if nothing else that remark had people talking about F1. On the other hand he fought hard to keep the US Grand Prix in 2005 alive, although that was probably more to do with a power struggle between him and Max Mosley than anything else.

Bernie is now saying that soon there will be only five races in Europe in a few years time.

The Concorde Agreement calls for certain races to be included, but defining exactly how these are picked is not easy. My understanding is that there is a list of 12 countries and six of them must be on the calendar, although I think there are actually 13 listed, with one of them being an either/or choice.

Thus Belgium, Germany, Great Britain, Hungary, Italy, Monaco, Spain, Australia, Brazil, Japan, Singapore and the UAE/Bahrain have some protected status, but can still be axed as long as six of the others survive. I believe also that team consent is required for the calendar to have more than 50 percent of non-European races, although I am told that US events are not considered to be non-European, which is odd.

At the moment the 2012 calendar has eight European dates: Spain, Monaco, Europe (Spain), Britain, Germany, Hungary, Belgium and Italy and 12 non-European events, so the teams must have agreed to that. To this list will be added Russia. This means that four races will have to disappear. The European F1 contracts run out as follows: Belgium (2012), Valencia (2014), Barcelona (2016), Hungary (2016), Italy (2016), Germany (2018), Russia (2020), Monaco (2020) and Great Britain (2027), which means that the earliest that F1 could drop to five European races would be 2016, although I do not see it being that easy. Yes, Belgium and France are working on a combined deal, and Valencia and Barcelona must face up to alternation or elimination, as happened in Germany. There is no way that Italy will be axed (Ferrari still has power). So I would say a drop to five events could not happen before 2020.

This is all very ethereal stuff but it begs the question: what is he trying to achieve? My reading of that is that Mr E is putting a little pressure on Belgium and France, as I have heard that their alternating deal from 2013-2020 may have fallen out of bed recently and he is trying to get it sorted out again. Alternatively (or perhaps in addition to that) there is the question of Spain. The country cannot afford two Grands Prix and so Bernie probably wants the pressure on them to combine and alternate (never an easy thing with Spaniards).

He might also be saying this in order to give other non-European countries an indication that there will be room on future calendars. It makes his life a lot easier if he has more demand than supply. Russia and New York both have deals, but there are projects like Cape Town, Mexico, Qatar (and probably others) that need to believe that there is room for them.

Either which way, I doubt we will ever see only five races in Europe.

Teams know that they get more money with each race, but they also spend more as Mr E has them running around on the mouse-wheel. If they stopped running for a moment and thought about it for a while, they would make a lot more money by buying the commercial rights from CVC and taking 90 percent of the revenues, paying out five percent to administer the commercial empire and a little bit to keep the FIA happy.

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Posted in Circuits, F1 politics, F1 Teams | 55 Comments

55 Responses

  1. on November 30, 2011 at 14:18 Gridlock

    Mr E is a personal hero of mine, his nonchalance and carefully-deployed rhetorical questions are works of art.

    I think he should apologise to Damon for the white hairs though..


  2. on November 30, 2011 at 14:22 Sean

    To not have Spa on the calendar would be a massive mistake, along with Monaco, Monza and Silverstone they’re absolute MUST HAVES.

    In the long-term it’s hard seeing Hungary surviving on the list, a Valencia/Barcelona alternation would be okay… though just Barcelona would be better.


  3. on November 30, 2011 at 14:30 Adrian

    Spot on as usual Joe about the teams buying CVC, but the chances of them looking that far ahead are zero don’t you think? Is the story of the team principals discussing/arguing about when to take a coffee break in a meeting a myth or are they (were they?) really that petty. Any other similar stories you could share?


  4. on November 30, 2011 at 14:34 Jayme Brito

    You can you see the teams together buying Formula 1 from CVC. Logical no…???? But teams don’t think logically they think with ego. To many egos together. That is why Mr. E is still there.!!!


  5. on November 30, 2011 at 14:41 APASUNOCAPAS

    Award for best article including title for 2011 goes to this article. Great stuff. Putting together everything mentioned previously and other bits into one tight blog entry,

    and big thumbs up for the title!


  6. on November 30, 2011 at 14:51 StephenAcworth

    The last paragraph makes so much sense in terms of long-term strategy for the teams; consequently it is unlikely to happen: too much vested interest in ego.

    Splendid post and concur with your appraisal of the three books.

    When will you be opening subscriptions to GP+ for regular purchasers?

    Thanks for another wonderful year of coverage and insight and here’s to many more…

    BTW: here in Canada we get the BBC HD feed (thru’ TSN) or sometimes can watch Speed whenever the blackout is not in effect. Any idea what will happen with the new situation? I would be happy(ish) to pay the Sky subscription to get full access to the whole F1 show, but not sure how the logistics are stacking up. If you have any idea, please pass on the info: if any fellow blog-readers have a clue, please let me know too!

    Thanks again, Joe, for all your great work…

    Have a fabulous christmas…


  7. on November 30, 2011 at 14:51 Titus Pullo

    The Susan Watkins bio is the best? Thanks, I ordered it on your recommendation.


  8. on November 30, 2011 at 14:52 Simon B.

    Interesting article. Makes you realise that the way F1 is run makes FIFA look like a paragon of fairness and transparency (despite Mr S. Blatter). Agree with you that if the teams actually woke up and came to an arrangement (with FIA) to take the commercial rights holder out of the equation we could end up with a system which would balance the need to safegauarded hostorical races which sometimes don’t make so much money but are crucial for the sport (e.g. Spa) against the need to bring in new income from races in other regions (e.g. snooze-fest races in Bahrain, Abu Dhabi).


  9. on November 30, 2011 at 15:04 APASUNOCAPAS

    Also quite agree with the last comment.

    I said something similiar in my response to your last article:

    “Hence why I think it is of the utmost importance that the teams buy back a controlling share in their sport, or the FIA owns the its media rights properly (i.e. not selling to your best mate).

    Only then will the sport exist for the sport and not for money. ”

    Currently the racing is a side aspect to the business that is getting money out of the media structure


  10. on November 30, 2011 at 15:04 G

    “……..they would make a lot more money by buying the commercial rights from CVC and taking 90 percent of the revenues, paying out five percent to administer the commercial empire and a little bit to keep the FIA happy”

    Absolutely. I have long wondered why this was not examined further, when the CVC deal was done

    Going to miss you during the off season Joe

    G


  11. on November 30, 2011 at 15:15 Abhijeet Gaiha

    Interesting analysis, as always. I don’t find such detailed analysis of F1 politics anywhere else.

    As for buying up the commercial rights, the teams can barely agree on the RRA right now, I have serious doubts if they can come up with a revenue split if they did own the rights.


  12. on November 30, 2011 at 15:44 bloomsm

    Think of what a great racing movie we could have by turning Bernie Ecclestone’s life into a movie. The early years, the Brabham era, through to today. Who plays Bernie?


  13. on November 30, 2011 at 16:50 Steve C

    Nice story Joe, I think you’re spot on.

    We’re about to lose Austin because someone here thinks they can negotiate with him. I hope you’re right about saying one thing and meaning the opposite because I sure want CotA and F1 to work here in Texas.

    We’re too damn close for this to fail now.


  14. on November 30, 2011 at 16:51 Phil

    I wonder how many lawyers that went through before being published.


  15. on November 30, 2011 at 16:53 4u1e

    Couldnt agree more about Bowers Ecclestone biog. Its just such a sloppy piece of work.


  16. on November 30, 2011 at 17:22 James

    Joe,

    I really enjoyed my first year of subscribing to Grand Prix+ and can’t wait for next season!

    I thought it was interesting that you mentioned the US Grand Prix as “New York” and not New Jersey. I guess it’s convenient to say New York and I’m sure Bernie doesn’t mind either!

    Keep up the good work!


  17. on November 30, 2011 at 17:27 Daniel Tyler

    I wish your last paragraph would actually happen then maybe we could, possibly, potentially, have grand prixs where joe public could actually afford to attend and sit in an actual grandstand and not spend £750 like I did for two of us to camp at the 2010 British GP. The way this sport is run and administered seems utterly amazing.


  18. on November 30, 2011 at 18:07 rpaco

    Is Susan Watkins related to Dr Sid? will put it on my Christmas list (Sorry, am dying with bad man cold and been wanting to comment all day but brain is very fuzzy and hurts, so much more to say but, buggerit)
    (To misquote my favourite group “There is lots of pain and you are staying right there”)
    Criminal what Stones did to their ginger wine and Crabbies and Greens are too sweet. Aldi Mac is the future.


    • on December 1, 2011 at 11:00 joesaward

      paco,

      She is his wife.


  19. on November 30, 2011 at 18:16 John (other John)

    I just shoved a paperback of Bernie by Susan Watkins, into my Amazon cart. (Damn you, Amazon Prime, i really just needed socks)

    Just to say, like paying cash over card, if I buy direct from them, they build in a price to pay for referral agents.

    Not much, might be 3%, but Joe could have that, and not cost me anything. Okay, it’s 15 pence. But might add up, pay for the website a bit.

    There may also be an uptick because of aggregated sales data affecting advertising. I find that to be ineffective, which is worse than simply awful. I have recently been profiled as: 1) Someone interested in booking Saga holidays (presumably use of machines by my mom) ; 2) A Polish emigre (huh? all Polish language adverts for iffy money transfer. .) ; 3) Some kind of silly teen, i bet because i was reading The Daily Mail a bit. Honestly, not even trying to game it, even for research purposes.

    Not one single advert selling me used HP Cesium clocks on eBay. They get it all wrong. But, no reason not to take the dollar, as a publisher!


  20. on November 30, 2011 at 18:23 Rich 2

    Joe, how likely do you think it is for the teams to buy the commercial rights? And, best will in the world, no harm intended etc, Bernie ain’t going to last forever.


  21. on November 30, 2011 at 19:09 John (other John)

    Sorry to be such a pain in the butt, however the funniest advert I get spammed with is for Greek tourism. I only follow the ongoing financial mess . . . This total disconnect of the frontal cortex nevertheless gives me hope i shall remain employed.


  22. on November 30, 2011 at 19:41 cvrt

    To understands BCE,think carrot & stick. He understands collateral pressure, and fully understands his opponents, their ambitions and their capabilities. He knows many never miss an opportunity to miss an opportunity (this applies to his non F1 portfolio as well) and he has the liquidity to pull the trigger unilaterally.

    During the GPMA days a case was presented to certain oem entrants to jointly buy F1 bonds,then trading at about 27 cents on the Dollar (because of the perceived risk). If the whole circus failed to reach an agreement to continue racing under Concorde-like terms,and the circus ground to a halt and payments were suspended, the commercial rights could have reverted to the bondholders…the teams would wrest control without paying-off CVC.

    The sole F1 insider to buy these discounted bonds…BCE.


  23. on November 30, 2011 at 20:29 hogthrob

    A drop to five races couldn’t happen before 2020? I suppose it’s possible that Bernie will still be running things in eight years time, but then again, we might have a different ringmaster with a different agenda before then.


  24. on November 30, 2011 at 21:07 GeorgeK

    What is Mr. E. trying to achieve? That artificial demand in excess of supply you mentioned for one.

    But I also think his statement is acknowledgment of the fact that European governments are not in a financial position to prop up the exorbitant sanctioning fees his company insatiably demands.

    There seems to be a never ending supply of gullible status seeking countries who think holding an F1 race will convey an image of modern prosperity. They should all look to Turkey, China, and now Korea for the reality of it all.

    Someday the demand will no longer be there and the bubble will burst, just like any other pyramid scheme.


  25. on November 30, 2011 at 22:03 elephino

    What I’ve never understood about Bernie isn’t specifically Bernie but rather how can some people (mostly team owners plus some journalists (not yourself, Joe)) always fall for the same tricks every time.

    In the Max and Bernie era, those two played off each other by taking opposing sides. Max often suggested a ludicrous extreme as a starting point for negotiation.

    Bernie hasn’t changed his tactics in many, many years and unfortunately it appears it’s because he doesn’t have to.


  26. on November 30, 2011 at 22:21 Adrian Newey Jnr

    Joe – very informative analysis.

    However, when every journalist suggests the teams just buy the sport, my question is – where would they get the money? All but the wealthiest few teams are struggling for survival and do not have bank vaults of cash lying around to pay the top dollar that CVC and Bernie would command. This too at a time when revenues are likely to be falling rather than climbing. I agree that the balance of revenues has tilted too far against the contributors (teams, circuits, etc). But I do not think buying the sport is the answer when arguably they can negotiate a better percentage without stumping up the cash to buy the rights.


    • on December 1, 2011 at 10:55 joesaward

      Adrian Newey,

      CVC borrowed the money to buy the sport. The teams need a suitable legal vehicle. See my reply elsewhere about how it could be done.


  27. on November 30, 2011 at 23:44 Gareth

    Please don’t scrap Spa for a (yet) another boring desert track. Please. For the love of the sport.


  28. on December 1, 2011 at 00:04 Rio Joe

    Thankful for Bernie since the time when he was managing FOCA the teams have never been to agree on anything. Historically not much changes from year to year and I include in that the gradual increase in the number of events. I agree all comments by Bernie are strategic. Without him there will be confusion for some time like all periods after strong leaders. This could last 5 – 10 years so it is good for F1 that he has long term contracts in place. But the world is changing and maybe what F1 offers is not in line with that. We forget that most sports mirror the aspirations of the world. F1 has little technological value now as a leader in development due to heavy regulation that defines a very specific type of car. So it is just a show ! Air races went out of fashion so did circuses the future needs to be planned with care to ensure that beyond the show F1 has relevance to normal peoples lives or is a stunning show. There definitely are too many races will little to different them from one another and with maybe 4 or 5 potential winners. There is NEVER a challenge from an underdog anymore it is Too predictable.


  29. on December 1, 2011 at 03:25 Matt

    Off topic, but wasn’t there supposed to be a FOTA meeting in Brazil to discuss the RRA, among other things? Any word on how it went?


    • on December 1, 2011 at 10:50 joesaward

      Matt,

      Nothing really to report.


  30. on December 1, 2011 at 06:09 Krishna Kumar

    so what do you suggest Joe? That the teams should look sideways and merge with the FIA directly or form a breakaway series as Ferrari have been threatening for years? I doubt teams would want to see the back of Mr. E simply because the sport wouldn’t work so cohesively without the FOM. Also, no one will pay such hefty amounts in the form of TV deals and sponsorship if there’s no-one as experienced as Mr. E to negotiate deals from the side of the FIA or the teams. Hence, the teams should continue making money but when the concorde agreement comes up for renewal, I guess they will try to get a bigger slice from the pie and Bernie knows it very well and that’s why he’s increasing the hosting fee of the new races every year.

    My only worry is that none of the circuits except a few make profits. Their revenue comes only from ticket sales which is why Turkey faced the axe while Korea is on its way. I think the teams and Bernie should work together to ensure that atleast these circuits break even every year and not go bankrupt. Can Formula one afford to lose Spa? Hell no!


    • on December 1, 2011 at 10:50 joesaward

      Krishna Kumar,

      I believe that the answer lies in some form of foundation or trust company, that is independent of the teams and the FIA. This would have a board of interested parties to make decisions, but would be run by a trustee. The trust would borrow money secured on the future revenues of the sport and distribute the prize funds per established schedules, agreed by the board. All teams with an entry would have an entitlement to the prize fund and a seat on the board. The trustee should appoint a suitable CEO for the F1 group. I see no reason why Bernie should not go on in his role if that is what he wants to do. Everyone would get a fair share and there would be money for proper centralised promotion, good deeds (scholarships etc). This would obviously increase when the loans were paid off.


  31. on December 1, 2011 at 08:34 Simple

    Great insight as always Joe, thanks. The big question for me is not so much the future of races to 2020, but how the balance of power will shift when Bernie moves on. He’s no spring chicken and I would be amazed if he’s still running the show in 8 years time. What then?


  32. on December 1, 2011 at 08:34 Paul

    I’m counting down to the annual Bernie off season threat that Melbourne must be made a night race – or it will lose the GP

    Around the end of January methinks- and then it will blow away in the wind.

    A pointless threat when Melbourne a) actually pays a great deal to Bernie (Without asking for a cheaper license fee like struggling tracks)

    and

    b) It still attracts a healthy crowd
    (Although the decision to put it on the same weekend as the opening round of the local football in 2010 was shortsighted in the extreme – Not number 1 media coverage – and punters attending the football instead )
    There is just nothing bigger than AFL in Victoria- even in the off season it gets front page/top story news.


  33. on December 1, 2011 at 10:18 Chris D

    Joe, do you think Bernie might pull his ‘if the promoter is dodgy – become the promoter’ trick for Circuit of the Americas?

    If he can get others to continue to pay to get the track built, and secure the funding commitment from the state, if he steps in as promoter there’s potential upside?


  34. on December 1, 2011 at 10:33 John (other John)

    Ashamed i was so distracting above.

    There’s a valuation gap. Bernie thinks the sport might be worth 6 billion or so. That’s a big ask, ambitious. Even CVC surely discount that. Let’s split the difference and say it’s worth a neat 3 billion for cash, an amount that is still handsome for capitalists who have been able to borrow at negative rates for a decade. Okay, now what? Let’s assume the teams can borrow the sum. Now their finances are tied to being able to pay interest on that. Italy pays 7%, Greece, some silly rate purely theoretical because nobody will dare lend. Rather strangely, the most indebted nation other than the USA, the UK, pays less than Germany, at around (fudging this) 2 percent. That’s a huge range. The difference between discounting to present value at 7% versus 2, over 30 years, is almost the valuation gap Bernie is after. This all assumes anyone will buy long dated bonds. Seen any successful 10yr auctions lately?

    Now, let’s assume that these are asset backed securities. Not one of these teams has the track record of minting money that Bernie does. (there’s a conundrum here, which i am coming to) Singular exception: Ron Dennis. But he spends all his money to build things. (which i firmly believe is the sane thing to do in any event, but especially so in troubled times). So, you do not have a superstructure which is there to spew out the coin. A cynical bond buyer would start asking what safeguards are there as to repayment. I think this would get right in to asking the teams to back the bonds with their assets.

    If the teams thought to take from 90% of revenues, or such similar large sum, does that leave enough on the table to repay? Buffer for a down year? Moreover, who ensures that will be the case? How does the bond buyer feel reassured that a group of people, who have hard-done-by feelings, will fairly allot revenues. Even a naive investor could quickly appreciate the tensions. Yes, covenants, yes, guarantees. But this is a literally tiny bond issue. No liquidity, no analyst coverage. Who is watching?

    Let me put it in a way i understand better. If a publisher does not have to employ a sales department, and i went in to say “okay, i buy all your inventory for this year”, I am looking at a 50% discount to rate card equivalents. Exactly how that works, the rate is purely illustrative, is obviously more complex. But that is no salaries, pensions to fund, severances to pay, no sales risk, and that is as close to a risk free income as can be imagined, because i am doing a credit swap. This very operation is why most small publishers fail. It’s really hard. It is also why magazines get conglomerated. In no way is this me criticizing Joe et.al., they are being very smart, far as i can see from the outside.

    So, why do we Bernie – watch? Because to a large but unknowable extent, he *is* the management. You know he’s no spendthrift, he gets others to do that. (and externalizing costs is the still prevailing economic theory, just look at companies who pollute . .). Management layers? Speak to Bernie. Honestly, how many people would get involved if the teams ran this as a collective? So, in my analogy above, he is doing all the ad sales, and rather cleverly, putting the cost structure elsewhere. I do think that is earning the commission. Does not cut it in terms of some work ethics, but does create the results. It is that in-built margin which made him a good credit to lend to.

    So, the irony, the conflict, is that to be efficient, the teams need a new Bernie. But whilst they are trying that, a lendor is going to want them to hock the whole show. I think the idea very dangerous. Moreover, anecdotally, we often criticize team managers and owners for their lack of acumen, here. One or two drive me to despair. Absolutely no way would my sentiment outweigh my analysis of that risk, in buying shares or bonds.

    Karen, where are you? :-)

    All jest aside, i am absolutely amateur at understanding F1, but i am not amateur at avoiding bad deals. I think a team buyout would be bad for all concerned. I think it would risk what i love. – j


  35. on December 1, 2011 at 11:33 Karen

    The teams don’t need to raise any money to take a stake in the commercial rights … There’s a nice equity swap proposal.

    Some teams have already expressed an interest.


    • on December 1, 2011 at 11:46 joesaward

      Karen,

      That is enough propaganda! What on earth does any team have to gain by agreeing to give away some of its equity to a non-racing Third Party? It would be much easier and less complicated in the longterm to get some fancy-footed merchant bankers to stitch together a CVC-like deal where a foundation-like entity borrows the cash and pays CVC’s price. There is no need for aggressive repayment schedules so the teams are far more likely to make a better offer than other bidders that are looking to turn a fast buck. Nothing much would change for the Formula One group. Mr E could go on running it with his staff marching merrily behind him. That would mean financial harmony and the opportunity to expand the sport to new levels of development. Dividing and conquering has its place in the “buccaneer” phase of building an empire, but things are much better in the phase that follows when everyone works together. Bernie can still get his kicks by squeezing bucks out of governments and TV companies…


  36. on December 1, 2011 at 12:13 The Kitchen Cynic

    If The Mole is George Smiley, does that make Karen Karla?

    Would she ever break cover for an article or even an evening with Joe, or would that spoil the repartee?


    • on December 1, 2011 at 12:15 joesaward

      Cynic,

      You’ll have to ask Karla…


  37. on December 1, 2011 at 12:50 patrick

    Joe,

    How about the teams jointly buy out CVC and then appoint Flavio Briatore as their sole representative with FOM? ;-)


    • on December 1, 2011 at 13:31 joesaward

      patrick,

      Flavio who?


  38. on December 1, 2011 at 13:26 John (other John)

    Nice Smiley ref, boys!

    Actually i think that a equity swap, which i think Karen is on about, is too close to selling the whole farm to be palatable. You see, that gives an exit, after lockup, a one – time gain, easily squandered, and of no benefit to the ongoing sport.

    Get this, there is no equity in half the teams. They are going concerns only as long as sponsorship contracts run. RBR may be included there. For those, must be Bonanza, i can see why an offer of an “exit” would entice. I defer to the only woman who ever ruled a bond floor, and say as approximately she was quoted, when she retired, “it gives me too much headache, to price a market”. I mean, there has to be some subtlety here. You can have diametrically opposed views in a liquid market, and that will even out, because of the scale of things no-one can really move the price. But, instead of the teams crowing they are being hard done by, and so sinking themselves, all so Barrichello, first they should learn the different game they need to play to survive.

    Equally, who are the teams to say they can sell the sport – themselves – for gain? Is that not what they attacked Bernie for, all these years?

    I think some kind of hybrid would be viable, but this amateur in such constructions can point to a few others. Funnily enough, Karen named two, the other day.

    Sorry to be so hard on this, but heaven forfend committee stagnation, or an uncompromising split, even if that split is internal. Where is Bernie’s succession plan? He should speak. I think he could pull off a floatation. But how exactly? Is that even what will work, not now, i mean in 20 years?


  39. on December 1, 2011 at 13:31 John (other John)

    Joe,

    the aggressive repayment schedules were required by the ratings agencies.


  40. on December 1, 2011 at 13:59 Tom

    @StephenAcworth

    I believe the BBC feed is supplied by FOM as the “world feed”, and expect that Sky will be providing the commentary next year (supposedly David Croft and Martin Brundle) as the BBC will not be covering all the races live.


  41. on December 1, 2011 at 17:23 Random

    Regarding the topic of “Bernie Watching”, I’ve been at it for a great many years. I’ve found that in most cases Bernie’s actions are surprisingly predictable.

    Rule 1. Bernie will take whichever decision makes Bernie the most money in the near term.

    Rule 2. See Rule 1.

    The sticky bit is that it’s not always easy to know which choice will earn Bernie the most, though it can often be guessed to a high level of accuracy. Don’t forget that Bernie is ONLY interested in a near term, easily realizable profit. For example, had he taken some short-term losses in the US market 20 years ago, he’d likely be turning FAR larger overall profits today. Bernie doesn’t think like that. He’s all about the short term deal, a few years out at most.

    Why did F1′s move to High Definition TV come 6 years after NASCAR? Why are races moving out of Europe? Why are tiny nation-states getting races while large countries with many more consumers are left wanting? Why does the overall benefit of the sport typically take a very back seat to commercial considerations?

    Because those decisions make Bernie more “Bernies”.


  42. on December 1, 2011 at 18:15 patrick

    It’s difficult to understand all this Bernie bashing!
    At least he’s the honest sort, unlike the Madoff variety from Wall Street.

    It’s strange how some people are a mirror for other peoples prejudices,
    and you know who you are…


    • on December 1, 2011 at 18:34 joesaward

      patrick,

      What are you talking about?


  43. on December 1, 2011 at 18:58 Random

    @ Patrick

    Honest? Really? Bernie will be the first person to tell you his word is his bond.

    And perhaps the last.

    Read up on the man, read up on the deals he’s done, on those who’ve accused him of breaking deals. We’re not talking small potatoes here.


  44. on December 1, 2011 at 21:05 Keith

    Joe,

    Bernie is Bernie, you are pre warned before going into a meeting with him making sure you have all 10 fingers, and when you leave the meeting, just recount to make sure you have them, and they are all in working order. As an additional measure, make sure you have the 10 toes, just to make sure you can walk straight.

    One other book you forgot to mention, in which you are quoted in Joe, is “The Piranha Club” by Timothy Collings. I would think that after reading the Tom Bowers book, full of mistakes, that he has lifted a fair amount from this book.

    One wonders what F1 would look like today, if we didn’t have Bernie and all his deals, good or bad? The thing is everyone who matters knows Bernie and that if he wants to do deal with you, then it will get done, on his terms I may add, but it will get done.

    He also has put his own money up front on a number of tracks, some worked out, and a lot haven’t. He just moves on to the next project – deal.

    I am a fan of Bernie’s on one hand for what he has done to bring us arm chair team owners a sport which is well run and most times entertaining. As for all the background stuff that is associated to Bernie, sorry but wish to forget that bit. As a customer of Bernie’s sport, I can chose what I like and what I want to discard


    • on December 1, 2011 at 21:28 joesaward

      Keith,

      No, I did not forget it. It is not a Bernie biography, nor is it a patch on the Watkins book.


  45. on December 1, 2011 at 21:31 John (other John)

    Just a thought, but historically it is asset strippers who make the most from themselves, and can therefore bid higher. It has some glaring inaccuracies (doesn’t credit who first pitched the deal, set it in motion, pulled out or was pushed out because a little more sensible), but Connie Bruck: The Predator’s Ball remains a hilarious up close insight. Copies for a quid in plenty.

    This is also a function of discounted valuations. They simplistically do not weight things like, “ah, well i really will care more for money coming in a bit down the line, when i need a new factory” and care for today only. Warren Buffet said, when asked about discount modelling, “there are some things i do in private” and would not be drawn.

    So what Random says about Bernie, well, it can’t be denied. He only copied the best of them. He’s an extraordinary pitch man, and maybe you can forgive him that his nature is not in the best caretaker tradition. Attitudes to money are often deeply psychological, an innate part of character. I grew up comfortably, so don’t hoard. A little too comfortably, so i worry all the time. Just about balances! Bernie’s my mom’s age, much more hard scrabble.

    I agree with Joe, that a Trust formation would make more sense. That’s right thinking. They can be as private or public as you like, but they all open up if challenged firmly, so pick your jurisdiction and crack on. Take a look at the Luxembourg rules. It can be above board, not a dictator’s laundry. Choose your people wisely. I also agree it is time to positively use some sharp financier minds to fix this mess. Just explain they will be handsomely paid, free race tickets for life, but no, NO backend. Heck, give whoever sorts this out a hall of fame nameplate somewhere like the BDRC. Because who does this well, will have proved themselves a gentleman. What i am saying, is appeal to better motivations. Bernie is looking for a score to take down, as always. There are others not long in the sport who would like that too. Somehow, you have to counterbalance those influences.


  46. on December 1, 2011 at 22:03 Keith

    Joe,

    Funny thing is I paid the full price for the Susan Watkins book, but the Tom Bower book I bought at the local Oxfam book shop in London for £1.99, wasn’t going to pay the full price, after reading a num ber of reviews. (It wasn’t a used one either)
    Yes you are correct, it is not a book on Bernie, but does have a fair amount in it on him and of course other team owners, and is not up to date either.



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