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How Bernie Ecclestone steered 15 billion to Formula One

NEWS STORY
12/10/2014

The extent of Bernie Ecclestone's impact on Formula One has been revealed in new research which shows that he has signed deals worth 14.2bn in the 30 years since he took over the wheel of the sport according to an article in the Express by Christian Sylt.

Ecclestone is in Sochi today at the inaugural Russian Grand Prix and just a few days ago he was in Azerbaijan for the announcement about the track on which a Grand Prix will take place in 2016. Just a few weeks before that he was in Singapore for its home race and in between he has been back at the office in London. Not bad for someone who turns 84 at the end of this month.

Although there is no indication that Ecclestone is ready to slow down, his age has led some to suggest that CVC, the private equity firm which controls F1, should appoint a deputy. There seems to be little point in doing that as long as Ecclestone can continue to do his job. Given how much money he has made for F1 replacing him would be a tremendous risk.

Surprisingly, the biggest deal of his career is not one of the new races in a far flung locale funded with government money. Instead, the accolade goes to the contract with German broadcaster RTL which was signed in 1991 and accelerated in value due to the success of Michael Schumacher. It is still in place today making it one of F1's longest-running television contracts. According to F1's trade guide Formula Money, this deal alone has generated 850m in revenue for the sport and Ecclestone personally negotiated and signed the contract.

Most global sports have senior managers who are each responsible for securing and signing new deals in sectors such as sponsorship, television and corporate hospitality. F1 is the exception.

F1 has no chief marketing officer, no press officer and not even a deputy chief executive. Ecclestone is in charge of bringing in new business across all of its major divisions and, as Pitpass revealed back in April, the sport had revenue of around 1.1bn in 2013. After 42.3m of income from miscellaneous areas, such as support series and interest, comes 54.6m from corporate hospitality and 161.2m from sponsors such as Rolex and delivery service DHL. The remaining 808m is split evenly between fees from broadcasters and race promoters.

F1 is not the only sport with multi-billion dollar revenues but the others have more than one person doing the deals. In the past 20 years alone, the Olympic Games have generated 4.9bn for the International Olympic Committee. Its deal with American broadcaster NBC, which has the rights to show the Olympics until 2020, is alone worth a staggering 2.7bn.

Football is another money spinner and the 2014 World Cup in Brazil brought 2.5bn to the sport's governing body, FIFA. At home, the Premier League's broadcasting rights were sold for 3bn in a deal lasting for just three seasons from 2013.

Although F1's broadcast contract with RTL sits at the top of the list of the largest deals that Ecclestone has ever signed, the two which follow it are race hosting agreements.

The smaller of the two is the 410m which F1 is due to receive from the British Grand Prix contract at Silverstone. Ecclestone appointed the Northamptonshire track as the venue for the race in 1987 and it has a deal to stay there until 2026 meaning that there is longer left to run on its contract than that of any other race.

It is just eclipsed by the 433m which the Australian Grand Prix is expected to generate for F1 over the 24 years of the deal. In August the contract was extended until 2020 and it has been held at its current home in Melbourne since 1996. Its race first began in 1985 and Ecclestone signed the deal directly with John Bannon, the then prime minister of South Australia.

The talks took place in the far from luxurious location of The Star pub on Leatherhead Road in Chessington. It was convenient for Ecclestone as it was close to the factory of the championship-winning Brabham F1 team which he owned.

After selling the team Ecclestone took direct control of the commercial rights to F1 in 1997 and has built up a fortune of around 2.4bn from selling stakes in the sport. Although he only owns 5.3% of it now he is still firmly in the driving seat.

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READERS COMMENTS

 

1. Posted by Spindoctor, 14/10/2014 8:44

"15 billion sounds like a lot, though its not that spectacular over 30 years.
The really interesting statistic would be to know how much of the lolly that was "steered" towards Formula 1 actually arrived in the pit lane, and how much veered offshore into the coffers of Bernie, CVC et al....."

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2. Posted by kiwi2wheels, 12/10/2014 16:02

"Love him or loathe him, BCE should be consulted by the governments of the UK and US to sort out their respective economic fusterclucks. There would be a lot of unemployed bureaucratic parasites................

He is effective."

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