Many names from both inside and outside Formula One have been mentioned in connection with succeeding Bernie Ecclestone, but there is no one person who can do Bernie Ecclestone’s job as Bernie Ecclestone can. Formula One insiders believe a team of senior executives will need to be hired when the time comes to replace him. Matt Cutler reports.
ASK ANYONE who works in the upper echelons of motor racing and they’ll tell you the same thing: there’s only one Bernie Ecclestone.
Having been a major player in Formula One since the 1950s and the man who has run the sport for the best part of four decades, very few can actually even remember a Formula One without Ecclestone at the helm.
So whenever the time comes for Bernie Ecclestone to part ways with the sport he loves and has grown to an astronomical level, how will Formula One’s owners – which since March 2006 has been CVC Capital Partners, currently boasting a majority stake of 35.5 per cent – go about replacing him?
What is particularly tricky for the owners of the sport is that there is no real corporate structure to Formula One – it is essentially Bernie Ecclestone acting as the king dealmaker. And given the respect he commands with all the major stakeholders, having been a central figure in the sport for so long, how do you go about replacing the irreplaceable, and establishing a corporate structure to a business that has thrived for so long without one?
Nevertheless, CVC is all too aware of the need to have a succession plan post- Ecclestone, and in 2012 – ahead of a potential flotation of the sport on the Singapore Stock Exchange – hired Swiss-based international executive headhunters Egon Zehnder to draw up a shortlist of executives who could be offered Ecclestone’s role at the drop of a hat.
The names on that shortlist are only known by a handful of people, but speaking to senior executives within the sport, six things are critical when it comes to CVC’s succession plan for Bernie Ecclestone.
1. One person cannot replace him
CVC will certainly have to employ a figurehead and chief executive to run the business in the post-Ecclestone era, but it is unconceivable that one person will be able to take on the deal-making responsibilities that Ecclestone undertakes as chief executive of Formula One Management (FOM).
“You need three or four people to replace Bernie and do what he does on a day-to-day business,” says one former team owner. “It could be a mix of people from inside and outside the sport, one thing’s for sure – it can’t be one person.”
2. A successor doesn’t exist in the sport
At the end of last season, Ecclestone flippantly told reporters that Christian Horner, team principal of the Red Bull Racing team, would be his ideal successor. It later transpired the comment was off-the-cuff and only made because Horner walked past when he had been asked the question.
Horner has undoubtedly achieved great success with his Red Bull team, but Formula One insiders believe that there is no natural successor to Ecclestone currently work in Formula One, otherwise it would be evident to everyone. Horner also told SportBusiness International that he “would never consider taking on Bernie’s role.” “My function and commitment is to Red Bull, and I certainly hope that Bernie will continue for another 20 years,” he adds. “It is in all our interests if he does. Bernie is still very much alive and in control of Formula One.”
3. Keeping the teams happy will be critical
In the 500-page prospectus compiled ahead of Formula One’s mooted flotation on the Singapore Stock Exchange in 2012, it was revealed that Formula One team Ferrari has a veto of whoever is brought in to replace Ecclestone if they have held a senior executive position, or ownership interest in a team or team engine supplier, in the previous five years. CVC looks unlikely to do that, but it is clear that whoever comes in to lead Formula One has to have a healthy relationship with the teams.
Formula One teams have frequently threatened to break away from the sport to form their own series in the past – nearly always as a means of leveraging better commercial terms – but they are the most important stakeholder in Formula One and also the most likely to take advantage of a new person coming in to lead the sport.
4. Risk-takers won’t be brought in
It is highly unlikely that CVC would choose a maverick personality to replace Ecclestone. CVC and the other shareholders, after all, will be conscious that Formula One in the post-Ecclestone era will be something of an unknown entity and bringing in a new boss who is known for taking risky, albeit successful, business moves won’t be, well, worth the risk.
“Formula One needs to be run by risk- takers – someone like [Apple founder] Steve Jobs, someone who reads from the What They Don’t Teach You At Harvard Business School book,” says a former FOM employee. “But headhunters don’t look for that type of person to head up a business that generates billions of dollars in revenues a year.”
5. Bringing in a person outside of Formula One to run the sport won’t be an issue
Twenty years ago it may have been a different story, but the major stakeholders in Formula One won’t hold any prejudice against someone – or people – coming in from outside the sport to run it. That is, of course, as long as they take time to understand the sport and how it operates.
“Teams are now very much run like businesses, and are much less the individual run structures of old,” says one team owner. “That’s also partly because people have come in from outside of the sport to invest in teams. I don’t see it as an issue that whoever replaces Bernie will be seen as an outsider.”
6. A “generational-shift” is needed
One Formula One veteran says it is imperative CVC makes “a generational shift” to ensure that it brings in “younger” thinkers – which he believes Ecclestone can boast to be despite being in his ninth decade – when the Formula One chief is no longer in charge.
“Formula One needs to have a young outlook, and be driven by someone with a real understanding of the changing media environment. A figure like James Murdoch [former executive vice-president of News Corporation] would be ideal,” he says.