Sainsburys’ current slogan is “Live well for less”. Something the Ecclestone sisters might want to consider… King has the ego, as he’s a ‘media tart’, popping up in all sorts of places well beyond the Sainsburys CEO’s remit. He would undoubtedly enjoy the limelight.
I read a year or two ago that Bernie was grooming his chief legal counsel (I sadly can’t remember her name) as his successor as CEO.Is this still a possibility? Or, will he be given no say by CVC in who replaces him?
It would be difficult for anyone to replace Bernie, his intimate knowledge of the F1 players, the Government contacts and his information network are things that are almost impossible to replace.
If on the other hand CVC are looking to do something different in the future, like getting more return from internet marketing, making the sport more accessible etc then Justin King might be a New Broom in the parlour.
Ha Ha! I can only imagine this story has something to do with All Fools’ Day but in case it hasn’t the problem not mentioned in your report is Mr. King’s son, Jordan.
A talented young man with Formula One ambitions he and his father have been somewhat criticised in some quarters since his racing ambitions are in fact paid for by “sponsorship” from Sainsbury’s suppliers. No suggestion of any impropriety of course, it’s just a business to business transaction that would go unnoticed were the father of a somewhat lower profile.
I know we live in days where there are apparently few ethics remaining in business, but if I were Jordan and I wanted to lift that crown I wouldn’t want my father to be the one presenting it….
What is wrong with that? It is clever sponsorship. Pedro Diniz with his family’s supermarket chain and Target’s sponsorships in Indycar are all based on the same idea.
What is wrong with it, is that as the CEO of a PLC, he will have certain contractual clauses, which effectively rule out his dealings in this sort of activity. More importantly, the way Jordan’s particular deals are structured seem to be that they are supplier discount deals. Hence he is taking discount away from the PLC and hence potential additional profit away from the the bottom line. The knock on from here is that if he is proven to be hurting the bottom line of a PLC then the shareholders are not going to be best pleased, as they quite rightly are going to be angry at having their dividends curtailed (I am assuming sainsburys pays one.) Therefore the share price will reduce and the board won’t be too happy with that.
It’s not the best move I have ever seen in terms of the role of a CEO or that of someone playing at sponsorship.
I don’t think you understand how valued JK is by Sainsburys shareholders. He can pretty much do what he wants and the rest of the board and the shareholders will roll over.
Also how can they be supplier discount deals? The sponsors hand over money to.. sponsor, where does the discount come in? Sure they supply Sainsburys but that will all be declared.
If these suppliers were getting preferential treatment by Sainsburys for their money then that is essentially bribery and therefore illegal so I’m sure it’s not the case.
Illegal? No, I don’t think so. Stores are always having promotions for the firms that pay them the most money. That is called business. If a brand agrees to pay a sponsorship in exchange for better product placement in a store that is business. It is not bribery. If the CEO’s son is a good enough racing driver then such a thing can be justified. If not, then it is a bit dodgy…
It depends if Sainsbury’s is involved with the contracts and how they are worded. Personal gain from suppliers to a company is a big no-no. The rules on this type of stuff are very tight these days. However if it goes through a company with no ties to Sainsbury’s then I guess that’s fair game. A buyer at Sainsbury’s can’t say “Pay us to sponsor the CEO’s son who has nothing to do with us and we’ll put you on promotion”,
Actually just found this, looks like sponsors are dealt with via a company not affiliated with Sainsburys. 42 Racing. As I thought.
Boy Scouts? There’s no such thing in the UK – I’m a UK Scout leader in my copious free time and my scout troop is 50:50 male/female, UK scouting went fully co-ed in 1991 (after starting the process in 1976).
UK scouting’s thriving currently, a big contrast to the Boy Scouts of America, who are stumbling from one PR disaster to the next. You could almost imagine Bernie running the BSA as they’re that old-school and out of touch…
Actually, Sainsbury’s was the (I think) only British supermarket left completely untainted by the horsemeat scandal. Even Waitrose and M&S had some traces here and there, so I believe.
JK has many talents and there are a number of similarities between F1 and retail, in particular marketing. JK successfully repositioned Sainsbury’s and maybe F1 could benefit from the same?
Well Bernie has the whole thing sewn up for several years to come, so a new CEO or whatever the position is called, could take it easy for a good while before much new negotiation is required. The main problem seems to be circuits dropping out as they go bankrupt or find themselves unable to afford the crippling F1 fees.
But who does hold the power now? CVC own less than 50% of the shares, Bernie usually has a “Bernie is golden clause” but a muddy discussion on JA’s site convinced me that Bernie had to give up his golden share on the acquisition by CVC. Should the two main shareholders (as I understand it both teachers pension funds) now get together with each other and a few smaller ones they could outvote CVC. Of course it may be a Delta Prefco situation where some shares are more equal than others and the majority in numbers is not the same in voting power.
Actually it is Jean Todt who is going to take over from Bernie, he has promised not to appear in the media or do anything for a whole year. What’s that? He already has a position in F1, are you sure? April fool!
Bernie is 82 year of age.
The ‘succession issue’ may not yield to any long term CEO contract terms established with CVC. God may choose to annoyingly intervene. JF
Not really that left field, Justin King is a proven successful CEO who turned Sainsbury’s around from the basket case (no pun intended) it was in 2004 to a well run profitable company with consistent YoY growth. He is in charge of a business worth £7 billion and in charge of 50,000 employees, an order of magnitude bigger than FOM. Supermarkets negotiate, that what’s they do and they are good at it. He could do the job, no doubt.
For all his faults and flaws, I would not want to be the one responsible for trying to replace Bernie E. with someone equally capable of running F1. One thing is for sure, there will never be another like him.
Which journalists can we trust with reliable sensible news? Who actually goes to the races and has an idea about what’s going on, other than yourself Joe?
James Allen does most of the races and keeps up with the politics. Most don’t. Michael Schmidt in Germany is very good, but he writes only in German. Pino Allievi in Italy is on the pace. Always worth keeping an eye on Roger Benoit in Blick in Switzerland. Autosport tends to do the day-to-day stuff but gets a little wobbly when it comes to analysis.
Incidentally, this is article a good validation to the doubters (not that I think you need it) of your criticism of armchair bloggers and f1 copy+paste sites, and the like. My Google news alert of ‘Ecclestone Gribkowsky’ has gone into overdrive since the original article.
Scouts rabbits supermarket kings succession plans and evil PE puppeteers more pantomime than circus I would suggest. As JS has often pointed out anything that Sylt manages to get a lazy editor to publish should be taken more as rabbit and talk as our cockney friend suggests. The skillset required to run F1 can’t be learnt in aisle 3 but rather needs to be honed over the years running a similar preferably FIA sanctioned series with a chunk of team ownership and leadership thrown in. There are very few such individuals but one comes to mind particularly when the new regulations and changing mobility technology mean that F1 is dragged kicking and screaming into the future. The CRH position and CEO of F1 Group Company which in effect is a debt servicing role for CVC is an entirely different role. One I feel will be determined far far away from the tiny constellation that is the F1 paddock
I have to take exception with one of the points you make. Firstly, the Scout Association is not called the Boy Scouts – we changed our name to the Scout Association in 1967. We are a movement open to both males and females and have been since 1990. Secondly, being a member of the Scout Association is an excellent preparation for anyone in a leadership role. We are a movement that “promote the development of young people in achieving their full physical, intellectual, social and spiritual potential, as individuals, as responsible citizens and as members of their local, national and international communities”.
Being involved with the Scout Association is an excellent qualification for involvement in any area of life including Formula 1.
I beg to differ (unless that’s sarcasm I’m not quite picking up on), F1 needs exactly that: ethical upright citizens. And the others? “Well, don’t let the door slap you on the behind as you leave” (to be absolutely clear, that is NOT aimed at you, Joe!)
It seems that Justin King was touting himself around in November as wanting to run F1 so this isn’t a new rumour. It has stuck around long enough for Ecclestonne to comment on it which is the new part as the link above puts it in hearsay. Not sure if it being around for five months means there is any truth behind it though!
Morrison’s chief tested by falling sales November 2, 2012 8:47 pm
Mr King will have been with the company for nine years in March. If he were to announce his departure next year, for a handover in 2014, he would have done 10 years. Friends say his dream job would be to run Formula One if Bernie Ecclestone were to retire.
Regret my application for am online subscription to the FT is still with the membership committee. (something to do with my sponsors not being rich enough).
Its going to be really difficult to replace Bernie, after what he has achieved for the teams. He always said there is no sentiment in F1, they are greedy. If sainsburys boss does relace Bernie he may change the business model and the teams wont be happy, the tracks pay too much, the tickets cost too much, surley this is not sustainable. There is only so much cash in the kitty, with the european markets virtualy stalled for years to come, asia may stall to in the next few years, and with the latest fiasco in cyprus, who is going to need the next bailout in europe, putting even more strain on the euro currency. Bernie is 82 and going strong and one day the inevitable will happen, then F1 will then be in trouble, finding a succesor is very difficult or they would have done it.
e
The more I think about it, the more I see the parallels between running a supermarket (screwing farmers & producers, selling cheaply to customers) and running F1 (screwing circuit owners & teams, selling cheaply to TV networks).
Maybe Adam Parr is free… Or Roger Penske. He’d whip em into shape and probably increase profitability overall with an eye on the sporting spectacle. Sporting soul, racing heart and a business mind is how I’d characterise Penske. Very sharp, enthusiastic, realistic and a hard player are other adjectives I’d employ to describe him. I know though, he never leave his left turning cars in Indy and NASCAR unsupervised.
Actually, ‘rabbit’ is Cockney rhyming slang for idle chatter or talk, from “Rabbit and Pork” to rhyme with talk. Quite apt if you are one of those who love a mixed metaphor. Not only is this is just talk, as you point out Joe, but it isn’t far off talk about pork in the American politics sense of ‘pork barrel’, ie favours or backhand benefits in return for contributions.
Didn’t you once mock and dismiss the “ill-informed fantasists who don’t know anything about F1” who were reporting Lewis’ move to Mercedes before it was announced?
Just catching up after the Easter break, I first had a look at the Dom bag site and then the Sainsbury story.
Dom is doomed.
Sainsburys GIVE AWAY FREE perfectly good bags.
I use them for everything, weekend stuff, crash helmet, credit cards etc, they all fit!
Alaric
joeblogsf1 
The choice of picture is sublime
http://www.guardian.co.uk/business/2013/mar/31/bernie-ecclestone-sainsburys-boss-f1-rumours
Isn’t Mr Sylt a more-favoured journalist of Mr E’s? Thus lending credence?
Propagandist is a better word.
Sainsburys’ current slogan is “Live well for less”. Something the Ecclestone sisters might want to consider… King has the ego, as he’s a ‘media tart’, popping up in all sorts of places well beyond the Sainsburys CEO’s remit. He would undoubtedly enjoy the limelight.
Wal-Mart’s slogan is “Save money. Live better”.
Joe
I read a year or two ago that Bernie was grooming his chief legal counsel (I sadly can’t remember her name) as his successor as CEO.Is this still a possibility? Or, will he be given no say by CVC in who replaces him?
Thanks
It is not Bernie’s choice
It would be difficult for anyone to replace Bernie, his intimate knowledge of the F1 players, the Government contacts and his information network are things that are almost impossible to replace.
If on the other hand CVC are looking to do something different in the future, like getting more return from internet marketing, making the sport more accessible etc then Justin King might be a New Broom in the parlour.
As you say, it IS 1st April,,,,
The job should go to Ron Dennis, think about it…
Why not Montezemolo then? As much logic in one as in the other.
Pranav, okay why not make them both joint chief executives…
Ha Ha! I can only imagine this story has something to do with All Fools’ Day but in case it hasn’t the problem not mentioned in your report is Mr. King’s son, Jordan.
A talented young man with Formula One ambitions he and his father have been somewhat criticised in some quarters since his racing ambitions are in fact paid for by “sponsorship” from Sainsbury’s suppliers. No suggestion of any impropriety of course, it’s just a business to business transaction that would go unnoticed were the father of a somewhat lower profile.
I know we live in days where there are apparently few ethics remaining in business, but if I were Jordan and I wanted to lift that crown I wouldn’t want my father to be the one presenting it….
What is wrong with that? It is clever sponsorship. Pedro Diniz with his family’s supermarket chain and Target’s sponsorships in Indycar are all based on the same idea.
There’s sponsorship by the family business and there’s sponsorship by people wanting/needing to renew lucrative contracts with the family business.
Signs of smoke, but no-one is silly enough to shout “fire” for fear of being shot.
What is wrong with it, is that as the CEO of a PLC, he will have certain contractual clauses, which effectively rule out his dealings in this sort of activity. More importantly, the way Jordan’s particular deals are structured seem to be that they are supplier discount deals. Hence he is taking discount away from the PLC and hence potential additional profit away from the the bottom line. The knock on from here is that if he is proven to be hurting the bottom line of a PLC then the shareholders are not going to be best pleased, as they quite rightly are going to be angry at having their dividends curtailed (I am assuming sainsburys pays one.) Therefore the share price will reduce and the board won’t be too happy with that.
It’s not the best move I have ever seen in terms of the role of a CEO or that of someone playing at sponsorship.
I don’t think you understand how valued JK is by Sainsburys shareholders. He can pretty much do what he wants and the rest of the board and the shareholders will roll over.
Also how can they be supplier discount deals? The sponsors hand over money to.. sponsor, where does the discount come in? Sure they supply Sainsburys but that will all be declared.
If these suppliers were getting preferential treatment by Sainsburys for their money then that is essentially bribery and therefore illegal so I’m sure it’s not the case.
Illegal? No, I don’t think so. Stores are always having promotions for the firms that pay them the most money. That is called business. If a brand agrees to pay a sponsorship in exchange for better product placement in a store that is business. It is not bribery. If the CEO’s son is a good enough racing driver then such a thing can be justified. If not, then it is a bit dodgy…
Hi Joe,
It depends if Sainsbury’s is involved with the contracts and how they are worded. Personal gain from suppliers to a company is a big no-no. The rules on this type of stuff are very tight these days. However if it goes through a company with no ties to Sainsbury’s then I guess that’s fair game. A buyer at Sainsbury’s can’t say “Pay us to sponsor the CEO’s son who has nothing to do with us and we’ll put you on promotion”,
Actually just found this, looks like sponsors are dealt with via a company not affiliated with Sainsburys. 42 Racing. As I thought.
http://www.unofficialpartner.co.uk/?p=3076
Boy Scouts? There’s no such thing in the UK – I’m a UK Scout leader in my copious free time and my scout troop is 50:50 male/female, UK scouting went fully co-ed in 1991 (after starting the process in 1976).
UK scouting’s thriving currently, a big contrast to the Boy Scouts of America, who are stumbling from one PR disaster to the next. You could almost imagine Bernie running the BSA as they’re that old-school and out of touch…
I suppose he could provide an acceptable face of capitalism for a float, while BE does the deals from a safe haven.
Wouldn’t a succession plan be required if the company was to be floated?
Horse meats cheaper apparently
Actually, Sainsbury’s was the (I think) only British supermarket left completely untainted by the horsemeat scandal. Even Waitrose and M&S had some traces here and there, so I believe.
“Ecclestone is needed now more than ever as Formula One faces a bumpy financial road.”
I guess this is main message the article wants to convey.
Probably
JK has many talents and there are a number of similarities between F1 and retail, in particular marketing. JK successfully repositioned Sainsbury’s and maybe F1 could benefit from the same?
Marketing? F1? Who are you kidding?
You could have chocolate bars at the gates to the paddock, get some impulse buys on the way out. It’s brilliant.
Marketing? BOGOF !
Well Bernie has the whole thing sewn up for several years to come, so a new CEO or whatever the position is called, could take it easy for a good while before much new negotiation is required. The main problem seems to be circuits dropping out as they go bankrupt or find themselves unable to afford the crippling F1 fees.
But who does hold the power now? CVC own less than 50% of the shares, Bernie usually has a “Bernie is golden clause” but a muddy discussion on JA’s site convinced me that Bernie had to give up his golden share on the acquisition by CVC. Should the two main shareholders (as I understand it both teachers pension funds) now get together with each other and a few smaller ones they could outvote CVC. Of course it may be a Delta Prefco situation where some shares are more equal than others and the majority in numbers is not the same in voting power.
Actually it is Jean Todt who is going to take over from Bernie, he has promised not to appear in the media or do anything for a whole year. What’s that? He already has a position in F1, are you sure? April fool!
Bernie is 82 year of age.
The ‘succession issue’ may not yield to any long term CEO contract terms established with CVC. God may choose to annoyingly intervene. JF
The odd thing is the sheer left fieldness of it. It is so obscure that it cannot be an April fools story.
Not really that left field, Justin King is a proven successful CEO who turned Sainsbury’s around from the basket case (no pun intended) it was in 2004 to a well run profitable company with consistent YoY growth. He is in charge of a business worth £7 billion and in charge of 50,000 employees, an order of magnitude bigger than FOM. Supermarkets negotiate, that what’s they do and they are good at it. He could do the job, no doubt.
For all his faults and flaws, I would not want to be the one responsible for trying to replace Bernie E. with someone equally capable of running F1. One thing is for sure, there will never be another like him.
Which journalists can we trust with reliable sensible news? Who actually goes to the races and has an idea about what’s going on, other than yourself Joe?
James Allen does most of the races and keeps up with the politics. Most don’t. Michael Schmidt in Germany is very good, but he writes only in German. Pino Allievi in Italy is on the pace. Always worth keeping an eye on Roger Benoit in Blick in Switzerland. Autosport tends to do the day-to-day stuff but gets a little wobbly when it comes to analysis.
That’s why it’s worth reading you Joe straight information
Thank you. Are you a polyglot?
Incidentally, this is article a good validation to the doubters (not that I think you need it) of your criticism of armchair bloggers and f1 copy+paste sites, and the like. My Google news alert of ‘Ecclestone Gribkowsky’ has gone into overdrive since the original article.
Polyglotish
Scouts rabbits supermarket kings succession plans and evil PE puppeteers more pantomime than circus I would suggest. As JS has often pointed out anything that Sylt manages to get a lazy editor to publish should be taken more as rabbit and talk as our cockney friend suggests. The skillset required to run F1 can’t be learnt in aisle 3 but rather needs to be honed over the years running a similar preferably FIA sanctioned series with a chunk of team ownership and leadership thrown in. There are very few such individuals but one comes to mind particularly when the new regulations and changing mobility technology mean that F1 is dragged kicking and screaming into the future. The CRH position and CEO of F1 Group Company which in effect is a debt servicing role for CVC is an entirely different role. One I feel will be determined far far away from the tiny constellation that is the F1 paddock
I have to take exception with one of the points you make. Firstly, the Scout Association is not called the Boy Scouts – we changed our name to the Scout Association in 1967. We are a movement open to both males and females and have been since 1990. Secondly, being a member of the Scout Association is an excellent preparation for anyone in a leadership role. We are a movement that “promote the development of young people in achieving their full physical, intellectual, social and spiritual potential, as individuals, as responsible citizens and as members of their local, national and international communities”.
Being involved with the Scout Association is an excellent qualification for involvement in any area of life including Formula 1.
R.D.Tronson, Scout Leader
I hope not. Scouts are supposed to be ethical upright standing citizens etc. Just what F1 does not require.
Is that bitterness I sense Joseph?
I beg to differ (unless that’s sarcasm I’m not quite picking up on), F1 needs exactly that: ethical upright citizens. And the others? “Well, don’t let the door slap you on the behind as you leave” (to be absolutely clear, that is NOT aimed at you, Joe!)
It maybe what it needs, but these are not the kind of people who thrive in the sport.
This is rude and a rough business to read.
Don’t know what you are talking about. The comments do not come attached to threads.
The bitterness comment I meant.
Some trawling around led me to this.
http://www.ft.com/cms/s/0/374afe7c-2509-11e2-8924-00144feabdc0.html
It seems that Justin King was touting himself around in November as wanting to run F1 so this isn’t a new rumour. It has stuck around long enough for Ecclestonne to comment on it which is the new part as the link above puts it in hearsay. Not sure if it being around for five months means there is any truth behind it though!
Requires subscription
Search for the headline in google news, that worked in my case.
Sorry about that. Here’s the important bit:
Morrison’s chief tested by falling sales November 2, 2012 8:47 pm
Mr King will have been with the company for nine years in March. If he were to announce his departure next year, for a handover in 2014, he would have done 10 years. Friends say his dream job would be to run Formula One if Bernie Ecclestone were to retire.
Regret my application for am online subscription to the FT is still with the membership committee. (something to do with my sponsors not being rich enough).
Groceries? Well, why not bullriding, then? Ends up chopped meat either way.
Horner must have been weeping in his cornflakes this morning. Didn’t he believe he was the chosen one ?
Here’s hoping Karen from this blog gets a promotion for her valuable contribution to this blog!
Its going to be really difficult to replace Bernie, after what he has achieved for the teams. He always said there is no sentiment in F1, they are greedy. If sainsburys boss does relace Bernie he may change the business model and the teams wont be happy, the tracks pay too much, the tickets cost too much, surley this is not sustainable. There is only so much cash in the kitty, with the european markets virtualy stalled for years to come, asia may stall to in the next few years, and with the latest fiasco in cyprus, who is going to need the next bailout in europe, putting even more strain on the euro currency. Bernie is 82 and going strong and one day the inevitable will happen, then F1 will then be in trouble, finding a succesor is very difficult or they would have done it.
e
The more I think about it, the more I see the parallels between running a supermarket (screwing farmers & producers, selling cheaply to customers) and running F1 (screwing circuit owners & teams, selling cheaply to TV networks).
Maybe Adam Parr is free… Or Roger Penske. He’d whip em into shape and probably increase profitability overall with an eye on the sporting spectacle. Sporting soul, racing heart and a business mind is how I’d characterise Penske. Very sharp, enthusiastic, realistic and a hard player are other adjectives I’d employ to describe him. I know though, he never leave his left turning cars in Indy and NASCAR unsupervised.
With all due respect, the article is dated 31st March, NOT 1st April.
Oh goodie, loyalty points with every race ticket!
Unless Bernie has negotiated a immortality clause [possible], in the relatively near future he’ll have to go.
Actually, ‘rabbit’ is Cockney rhyming slang for idle chatter or talk, from “Rabbit and Pork” to rhyme with talk. Quite apt if you are one of those who love a mixed metaphor. Not only is this is just talk, as you point out Joe, but it isn’t far off talk about pork in the American politics sense of ‘pork barrel’, ie favours or backhand benefits in return for contributions.
Didn’t you once mock and dismiss the “ill-informed fantasists who don’t know anything about F1” who were reporting Lewis’ move to Mercedes before it was announced?
Yes.
even a broken clock is right twice a day
Just catching up after the Easter break, I first had a look at the Dom bag site and then the Sainsbury story.
Dom is doomed.
Sainsburys GIVE AWAY FREE perfectly good bags.
I use them for everything, weekend stuff, crash helmet, credit cards etc, they all fit!
Alaric