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Brabeck: We need to be able to replace Bernie within 24 hours

NEWS STORY
06/05/2012

For literally decades Formula One insiders have pondered the conundrum of who should replace Bernie Ecclestone when he eventually steps down from his job as the sport's chief executive.

One theory says that a committee could share the job whilst the opposing view is that one person has to be responsible. Some are of the opinion that an outsider would be best to replace Ecclestone and others say it has to be someone with detailed working knowledge of F1. These questions remain unanswered and only one thing seems certain. This is that it seems to be an incredibly tough decision and shouldn't be made at a moment's notice. However, someone who seems to disagree with this is F1's incoming chairman Peter Brabeck-Letmathe (right) as he thinks there needs to be a system in place to be able to replace not just Ecclestone but any member of F1's board within 24 hours if needs be.

Brabeck is a 67 year-old Austrian who used to be Nestle's chief executive and is currently its chairman so he knows a thing or two about running companies. Since 2006 Brabeck and advertising mogul Sir Martin Sorrell have been independent non-executive directors of the F1 Group's parent company Delta Topco. The two have taken a very different approach to this position.

Sorrell has frequently spoken out against Ecclestone, first in 2009 when the F1 boss made controversial comments about Hitler and then, after that, when he claimed that former Renault team principal Flavio Briatore should not have been given a lifetime ban from the sport for allegedly rigging the result of the 2008 Singapore Grand Prix. In contrast, Brabeck has been as quiet as a mouse and Ecclestone told Pitpass' business editor Christian Sylt that he strongly approved of this approach. It is believed that Brabeck has never even mentioned his F1 position in an interview or talked about it publicly. Until now.

Brabeck's first interview about F1 appears in the German-language press and, surprisingly, he gets drawn into a discussion about replacing Ecclestone right from the start. The interview is in the format of a Q & A and Brabeck starts with a bang by confirming that F1 will be floating and that he is ready to become its chairman. Neither of these points have even been confirmed by F1's majority owner, the private equity firm CVC, and it would be perfectly reasonable to assume that it wanted to be the first person from the company to do this. Brabeck has now taken that decision into his own hands and says "we intend to float F1 in Singapore soon." He adds "it's true that I said I would be ready to chair the board in a non-operative function. If F1 goes public it will be important to have an independent chairman."

In just his second response Brabeck starts talking about F1's succession strategy. "It is the duty of a board to secure the succession," he says adding "at Nestle, I always made sure that any executive board member could be replaced within 24 hours. This would also apply to F1 when it becomes a public company. We must also consider for the long term how to replace Bernie Ecclestone. There are different possibilities. We can think about new structures, but also about individuals. We probably have to consider both solutions."

It would not at all be surprising if a top head-hunting firm has already been asked by CVC to prepare a dossier on possible replacements for Ecclestone and Pitpass is aware that Sorrell called at least one prominent motorsport figure last year to discuss F1's lack of a succession plan. However doing this behind the scenes is one thing whereas Brabeck talking about it in detail at the start of what may be his first ever interview about F1 is another.

We would perhaps have expected Brabeck to respond to a question about F1's succession strategy by saying that it is a matter for CVC which indeed it is. It seems particularly ridiculous for Brabeck to speak out about it given that Ecclestone personally endorsed him for the job of chairman as Pitpass revealed. His comments also seem to be pretty unnecessary as it remains to be seen whether F1 really does need a system in place by which any board member can be replaced within 24 hours.

As Sylt recently revealed, F1 has £4.4bn of guaranteed revenue coming in over the next 15 years thanks to its long-term contracts. This gives the business an average of £291m in revenue per year without the chief executive even having to lift a finger. Unless a race is taking place (which of course only happens 20 times a year), there are very few significant events happening every day in the F1 Group whereas people are buying a Nestle product every second. Nestle's operations are split into three geographic divisions which cover a total of 328,000 employees and produced £56.4bn revenue in 2011. In contrast, F1 has no geographic division heads reporting in, only around 200 employees and revenue of £1bn last year.

To be clear about this, Brabeck should not be criticised for what he suggested. It is better being safe than sorry after all. However, what seems to be a misjudgement is that he made this suggestion publicly and, what's more, did this right at the start of his first ever interview about F1. If he wants to make a name for himself in the sport, as Sorrell has done, he seems to be going about it the right way. Time will tell just how productive a strategy that is.

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