Formula 1 is an odd and complicated world. Sometimes things are exactly as they seem, and at other times there are vast sprawling conspiracies.
There are some who see CVC Capital Partners, the private equity people who control the company that holds the commercial rights of F1, as prisoners of Bernie Ecclestone who don’t know zip about the sport and don’t care about anything other than the money. Others see them as simple pragmatists who do whatever it takes to make more money. That, after all, is their job. They make decisions based on the risk to them, their customers and their brand. The F1 investment is certainly a bit messier than they like – and will get a lot messier if F1 goes to Russia later this year – but it is also wildly profitable and the suited supermen at CVC Capital Partners (think Sherman McCoy from Bonfire of the Vanities) reckon that the profit is worth the grief. They are probably right.
For those of us who love the sport, they are definitely wrong. They have loaded the business with debt and, frankly, have added no value at all to anything. Bernie Ecclestone must take the blame for that, although being greedy is not a criminal offence.
So why, you might ask, has CVC done nothing to remove Bernie from his position. The truth is that they have, but the world does not really need to know. He is no longer a director of any of the F1 companies and while he may still be CEO, that is not as powerful a role as it appears. My feeling is that CVC has sat back, looked at the legal situation and concluded that they don’t have to remove Mr E because the Germans will almost certainly do it for them. And even if Mr E is deemed not to be guilty, he is still 83 and there is no reason why CVC should reinstate him as a director. I am quite sure that they have a succession plan and that the plan will be actioned just as soon as it needs to be actioned. But not before.
I doubt that they are overly worried about the European Commission either because that can be sorted out quite easily once the culture of the management changes. The FIA’s Jean Todt is not going to be in a position to argue with the EU and the big teams will simply be forced to accept a fairer distribution of wealth, without such things as the Ferrari five percent (two and a half form the prize fund and two and a half from the Formula One group). I doubt that CVC will back down much on their overall share of the take. Whipping the teams into line is simply a question of giving the FIA enough money to allow Jean Todt (or whoever) to fund his schemes. The FIA and the teams could always go off and do their own thing so the skill is to keep them apart. The federation, frankly, does not want the hassle of having to set up its own arms-length commercial division and the teams will fall into line if they are given a gesture of some kind to make them think that they have made progress.
The promoter’s share of the business is ultimately doomed to reduce over time until it reaches a point at which it is no longer a problem, after which it becomes irrelevant. Bernie and CVC worked the sport in their favour but that will not happen again because when it comes to the next Concorde (for want of a better word) negotiation a union of the teams and the FIA will inevitably mean that the rights holder has to compromise.
The smart thing for CVC to do is to make the sport transparent and squeaky clean so that more sponsors arrive.
“Secrecy, being an instrument of conspiracy, ought never to be the system of a regular government,” wrote Jeremy Bentham, the philosopher and social reformer. He was quite right.
What value does secrecy have in F1? It has served as a means of exerting power, but it is now holding the sport back.
There is plenty of money to be made without resorting to TV paywalls and working WITH the teams rather than fighting them will unlock a load more potential. CVC can afford to wait a while longer, generate more business and then go to the markets in a few years time. Or if there is a Murdoch or a Malone out there who wants a private sale, so be it…