Ecclestone no longer in pole position

MOTOR SPORT: Bernie Ecclestone's iron grip on Formula One was loosened significantly yesterday by a High Court judge in London. Mr Justice Park ruled Ecclestone had acted unfairly in preventing a group of three banks from appointing board members for Formula One Holdings (FOH), which governs the commercial side of the sport.

It seems likely Ecclestone will appeal against the verdict but if unsuccessful, he will have to allow the banks to appoint directors to the board, effectively removing him from outright control of Formula One. The 73-year-old has held commercial control of the sport for three decades since establishing the Formula One Constructors' Association in 1974.

However, anyone who thinks that yesterday's ruling means the end of Ecclestone's involvement with Formula One should think again. It will take more than a judge's pronouncement to loosen the grip of a man who has spent the past 25 years turning the world of grand prix racing into his personal fiefdom.

But in establishing a right of representation for the banks who own 75 per cent of the sport's commercial rights, the judge has gone some way to ensuring Formula One and its world championship will not be subjected to a potentially ruinous split over the next few years.

For the first time since Ecclestone took control of the sport, the former second-hand car dealer from Kent will have to take account of other people's views. On the face of it he will no longer enjoy the status of an absolute dictator upon whose goodwill hangs the livelihood of everyone in the paddock. A sport in which secrecy has become a way of life will find its business being put on public view.

Ecclestone will have to reconcile himself to making an accommodation with the big manufacturers - including Mercedes, Toyota, BMW and Honda - whose arrival he welcomed in the 1990s but whose displeasure was aroused when they realised how much of the proceeds he was keeping for his own company.

Multinational corporations pouring hundreds of millions of dollars into a hi-tech sport find it hard to explain to their shareholders why the teams receive no more than 40 per cent of Formula One's vast revenues, and the creation of the GPWC, a breakaway group aiming to run its own world championship series after present contracts expire in 2007, was their response. Now, for the good of grand prix racing and in the interests of its spectators, a compromise must be found.

Compromises do not come easily to Ecclestone. His vision made multi-millionaires out of such adventurers as Frank Williams, McLaren's Ron Dennis and Eddie Jordan. But whereas those beneficiaries more or less tolerated Ecclestone's terms, the arrival of the major manufacturers confronted him with a set of negotiators whose fortunes were not entirely based on the secret formula according to which he divides the spoils.

The banks can hardly be blamed for wanting to protect an investment of almost $2 billion, its value seriously threatened by the arrival of the GPWC. For all Ecclestone's recent efforts to secure the future by extending agreements with various circuit promoters beyond the end of the Concorde agreement in 2007, the banks sensed a danger they would find themselves holding a few pieces of worthless paper representing a sport once held up as a paragon of organisation.

It was Ecclestone who, seeking a big payday five years ago, began the process of selling 75 per cent of SLEC, the company that owns the commercial rights to Formula One, to EM-TV, a German television company which turned out to be only months away from collapse.

The shares were transferred to Kirch Media, another German company, which also hit trouble. Eventually they came into the possession of the three banks - Bayerische Landesbank, Lehman Brothers and JP Morgan - who had funded the purchase, and who won yesterday's judgment.

It remains to be seen whether the bankers, the manufacturers and the old ringmaster can work together to create a new agreement providing stability for the teams and reducing their costs while retaining the sport's glamour and improving its competitive quality for the spectators.

The question is whether Ecclestone can bring himself to work in an environment in which secret deals should have no place.

The implication of the ruling is that Bernie Ecclestone's ability to intimidate the Formula One paddock may have outlasted his grasp of the way grand prix racing needs to evolve if it is to have a future commensurate with its past.