by Terry Lovell
GPI, and the Treu triumvirate, faded from the Formula One scene as the average purse agreed with the organisers increased to about £68,000, although it rose as high as £110,000 in South Africa, Brazil and Argentina due to long-haul costs. Its distribution, now transferred to the F1CA, had been based on 20 per cent being awarded on the qualifying results and 80 per cent according to race results, with the winning driver getting the major share. However, the F1CA replaced it with an arcane system designed to ensure fairer distribution, the details of which the constructors refused to reveal for many years, although, given its complexity, one wonders why they bothered.
Thirty-five per cent of the prize money was paid out on the previous season, and was divided into two sums – 17.5 per cent being divided equally among the top ten teams in the two previous half-seasons. In the first half-season it was based on the results of the previous season, and, in the second half of the season, it was based on the last half of the previous season and the first half of the present season. A further 17.5 per cent was also divided among the top ten teams, but in proportion to the number of points scored in the two half-seasons. Twenty per cent was paid out on the grid places of the first 20 cars, decreasing from two per cent for pole position down to 0.4 per cent for the last position. The remaining 45 per cent was distributed according to current race results, and it was paid out on the position of cars at quarter, half, three-quarters and full distance. One twelfth was paid out at quarter-distance, another twelfth at half, another twelfth at three-quarter and the remaining three-quarters of the 45 per cent on the end results. It was structured to reward previous performance and grid positions, and to compensate cars leading the race but failing to finish.
The F1CA’s victory in its clash with the organisers and, consequently, the CSI, marked an important stage in the evolution of its political status. What had once been a necessity for the constructors – ‘start’ money and the size of the prize purse – had now become a qualification for the organisers. But while it signalled a shift in power in favour of the constructors, a consequence was to prove detrimental to the well-being of the independent teams, those privately funded or outside the protection of the F1CA, which had already been accused of operating a ‘closed shop’ policy.
In 1974, beginning with Monaco, the organisers, after consulting with the F1CA, decided to reduce the number of entries, a decision whose consequence fell exclusively on the independents. The organisers claimed that it was taking place in the interests of safety, while others believed it had more to do with organisers wanting to claw back some of the increased prize money by reducing the ‘start’ payments bill. That was certainly a benefit for the organisers but the principal beneficiary was the F1CA. The presence of fewer independents gave greater importance and power to the ‘travelling circus’ package, which strengthened Ecclestone’s hand in negotiations.
In return for the improved purse, he had guaranteed that the F1CA teams would supply a minimum of 18 cars per race, or forfeit half the prize money. If an independent team chose not to turn up for a race – as could well occur through sudden cashflow problems – it was their choice, he argued. If an F1CA team didn’t, it would suffer a severe cash penalty. The guarantee of a team’s appearance also had consequences for F1CA members themselves, for it brought to an end the practice of a team that was way down the points table failing to show up at end-of-the-season races, or even a crowd-pulling team like Ferrari temporarily dropping out mid-season, as it had been inclined to do. Another rule to ensure a more professional approach provided for the disqualification of a driver who failed to finish the season because of his overwhelming points lead, as Niki Lauda had in 1977 when he won his second world title.
To keep teams competitive Ecclestone ensured that the considerable benefits of the F1CA’s travel package could not be taken for granted simply through membership. A team’s costs would not be covered until its performance had accumulated sufficient points to put it in the ranks of the top ten teams. Continuing enjoyment of the benefits was then based on performance results over two six-monthly periods: if the times of a team’s cars began to slip it was in danger of being replaced by a team whose times were improving. The independents, who had to qualify before they could take part in qualifying sessions with the F1CA teams, claimed such rules favoured the established teams to their exclusion, but their protests, once again, were in vain.
There were rare occasions when the efficiency of the package could rebound if a team hit financial trouble. For example, in order to maintain a full cast Ecclestone acquired, although, it was believed, in the name of the constructors’ association, the assets of Mo Nunn’s down-the-grid Ensign team after it ran up debts totalling £100,000, forcing his company into voluntary liquidation. The team staggered on until the end of the 1982 season, when Nunn, who moved into IndyCar racing, signed over his half of the company to Teddy Yip, of Theodore Racing, which itself went under by the end of the 1984 season. Ecclestone rejected Nunn’s claim that he had bought Ensign’s assets, but not that he had financially helped the team out. He said: ‘Absolute rubbish. What would I do with them [the assets]? It’s more than possible I gave him money, or lent him money, but I never bought anything off him.’ At different times both Ken Tyrrell and Frank Williams were rescued by Ecclestone’s wallet to ensure that the constructors could fulfil their contractual obligations. Said Peter Warr: ‘Ken was forever, after the Jimmy Clark era, not organising his affairs properly and running short of cash, and so Bernie would help him out. He was also helpful to Williams.’
Before the advent of television, a team’s principal source of income to cover running costs and drivers’ retainers – this was sometimes self-funding – came through sponsorship, supplemented by qualifying and finishing money from the organisers, which, by 1977, could total as much as $350,000 a race, depending on the size of the circuit. But, in practice, the balancing of the books, handled by team bosses whose eyes generally glazed over at the sight of a profit-and-loss account, was often an uncertain and neglected affair. Such were the pressures of survival in those early days that it was a precarious existence for most of the constructors, who tended to pay last year’s bills with next year’s sponsorship money. To reduce costs, the number of practice sessions also underwent a fundamental change. Rather than being held for three hours over a three-day period – a total of nine hours – to fix pole positions, the sessions were staged over two days, thereby considerably reducing operational costs, including teams’ hotel and travel bills. Two general practice sessions were later introduced to run full tanks in preparation for the race and test tyre options, followed by two one-hour qualifying sessions to hype up television interest. It was part of a series of changes that resulted in the current regulations, which limit the number of laps, exclude practice cars and even specify the number of tyres that can be used.
The F1CA also tackled the long-neglected issue of track safety. The standard of fire-fighting expertise and equipment at tracks – invariably no more sophisticated than untrained stewards armed with standard fire extinguishers – was woefully inadequate and, over the years, had doubtless cost the lives of drivers. Medical facilities and emergency services had been no less sub-standard – at the 1978 Swedish Grand Prix the medical centre was a caravan, and at Hockenheim a single-decker bus. Backed by the Grand Prix Drivers’ Association, and, for once, the FIA, the F1CA pushed for, and achieved, radical improvements, including the appointment of Professor Sid Watkins, a member of the RAC’s motor-racing medical panel who had been at Ayrton Senna’s side when the driver was fatally injured. He accepted Ecclestone’s invitation in 1978 to become the teams’ on-track doctor. Pressure was later put on the organisers to provide the latest on-site hospitalisation facilities and helicopters to provide transport to the nearest specialist hospital.
Proper parking zones were also introduced for the first time, so that teams’ transporters and support vehicles could be positioned near their pits, an elementary facility neglected by
organisers who had shown little regard or interest in the professional needs of the teams. It wasn’t long before the pit areas themselves were transformed. Where once they had been no more than a roughly cemented or tarmacadam standing, with mechanics at some tracks working under a canvas canopy attached to the side of the transporter parked by the side of the pit, now spacious, purpose-built garages supplied with water and electricity gradually began to appear as an integral part of standard facilities.
With the F1CA’s increasing self-determining authority, Ecclestone’s influence exerted itself in all and every area of Formula One, even to the more mundane administrative procedures, including the responsibility for issuing passes to the paddock, which, until then, had been haphazardly and inefficiently carried out by the organisers. The distribution point would vary from race to race, to the extent of taking place at an off-track office, where, once located, a team might find that it hadn’t been allocated the required number of passes. Or teams would be refused admission to a circuit because they didn’t have the required passes, which were being issued from the organiser’s office – inside the circuit. The system was so inefficient that at one Monaco Grand Prix the teams staged an impromptu ‘strike’ after paddock officials refused to give entry tickets to the tyre companies.
‘It was infuriating,’ said a former team boss, ‘because you had all these poofter fellows walking up and down the paddock in Johnnie Walker gear, 150 glamorous models with their tits hanging out, and 450 relatives of the local police, while the teams couldn’t get in.’ The teams became so exasperated by the petty officialdom of the organisers’ system that the constructors took it upon themselves to introduce a new and more efficient one: the annual issue of paddock passes to all team members and registered personnel which authorised access to all circuits. The passes were first issued at the Italian Grand Prix at Monza in 1974, despite reservations from some of the constructors themselves, who believed it wouldn’t work without the organisers’ agreement. It took about an hour to persuade officials of their unilaterally declared validity. Soon the authority of the constructors’ pass was accepted without question, although the more powerful circuits put up more spirited opposition before capitulating. Even then, until the late eighties, Monaco held out with its own passes but ceded their distribution to the constructors.
Another popular move with the teams was the banning of free-wheeling VIPs, PR flunkies and ‘pit popsies’ from the pit lanes. They were considered an obstruction to the work of the teams as well as a safety hazard. The constructors, or at least Ecclestone, also assumed greater control through the issuing of paddock passes to motor-racing journalists, once he had approved their accreditation. Similarly, he became responsible for approving the accreditation of local journalists whose names were submitted by organisers.
He was also responsible, through the Paddock Club, for Formula One becoming as much a corporate social event as a sporting one, although this development was initiated and successfully developed by others, who had been the first to see its commercial benefits: an exclusive social area for the entertaining of favoured clients provided a natural setting for marketing executives keen to wring every dollar out of their sponsorship budgets. As early as 1973, Philip Morris was laying on, in the paddock at Formula One races, a huge camion complete with kitchens, freezers and cool stores, opening to a massive awning described as ‘a canvas Cafe Royal’. Contracted to assist in the promotion was GBM Editorial Associates, which was set up that year by public-relations specialists Barrie Gill, Anna O’Brien and Andy Marriott with seed capital of £2000 provided by Michael Tee, the then managing editor of Motorsport and Motoring News, founded and owned by his father, Wesley.
GBM Editorial Associates later changed its named to Championship Sporting Specialists, which, following a dispute caused by his father’s refusal to move into PR, Tee subsequently joined as vice-chairman in 1977. The company went from strength to strength, covering every area of motor sport promotions, from press releases to corporate hospitality. At a Silverstone Grand Prix, there were as many as 15 hospitality tents which were positioned, at the sponsors’ insistence, as close as possible to their respective teams. It presented a disorderly sight, though, that Ecclestone couldn’t tolerate and which he was keen to reorganise. With this in mind, he approached Tee with a proposal that they should work together. But it was conditional, said Tee, on his dumping a partner whom Ecclestone disliked, something that he declined to do. His decision was followed by the gradual demise of Championship Sporting Specialists’ corporate hospitality business – the two events were unconnected, said Tee – and the emergence of a new, more powerful enterprise.
The force behind its founding was Ecclestone, who agreed with senior executives of Eurovision, the trading arm of the Geneva-based European Broadcasting Union (EBU) – a professional association of public-service broadcasters formed in Torquay, England, in 1950 to negotiate on behalf of its members the acquisition of television rights – that advertising hoardings and banners were becoming too unsightly, thanks principally to the practice of promoters agreeing to their display between the cameras and the action to maximise revenue potential. Monza was cited as one of the worst examples. Ecclestone, with his eye for meticulous organisational detail, immediately concurred with the suggestion that track signage should come under the control of a company able to impose a more visually agreeable formation.
He looked around for a suitable candidate to head such a company, and his thoughts settled upon a figure known to him through his public-relations work with Marlboro. He was Patrick ‘Paddy’ McNally, an occasional rally driver and former freelance motor sport journalist, who had been hired by Marlboro as a PR adviser in mid-1972. By 1974 he had his own desk at Marlboro’s new European headquarters in Lausanne, Switzerland, and was primarily involved in various follow-up tasks of the Marlboro sports programme, such as Grand Prix activities, a rally series and high-speed boat racing, as well as promoting television coverage of the events for the American and European market. He was a close friend of former Swiss racing driver Baron Toulo de Graffenfried, the winner of the Silverstone Grand Prix in 1947, who was hired by Marlboro as a consultant to open the doors to the ‘club’ of retired aristocratic drivers of pre-war vintage who were then dominating the organisation of Grands Prix. Suave and well connected, McNally knew his way round the best restaurants as well as the exclusive Swiss ski village of Verbier, a favourite haunt of the idle sons and daughters of the British upper classes. Years later he was described in the British tabloid press as a former lover of Sarah Ferguson, with whom he frequented Verbier’s social scene before ‘passing her on’, in the summer of 1985, to Prince Andrew. Following their marriage a year later, she became the Duchess of York.
The invitation from Ecclestone to set up a company to resolve the EBU’s concerns came at a fortuitous time for McNally. Married to a woman from a wealthy British family who died a tragically early death in the late seventies, he had been told that his independent contractor status with the Marlboro team was not being renewed. McNally was ready for the challenge. Said a former colleague: ‘One thing for sure, he was a pretty bright lad, knew his way around and had learned a lot at Marlboro.’ Ecclestone agreed. ‘He had the contacts to do it. I said, “If you can do it, do it.” That’s how the business started.’ But from the beginning McNally was under no illusion as to the extent of Ecclestone’s backstage influence and the importance of his goodwill. He was aware of how difficult life could be made by Ecclestone, and in many different ways, right down to obtaining vital passes for access to the circuits for personnel and vehicles.
The deal agreed with McNally was simple: he would buy the signage rights from Ecclestone and whatever he made over that figure was his profit. It led to the setting up in December 1983 of AllSport Management SA. It was registered in Geneva, where, for tax reasons, it established its base, to buy the signage rights of all Formula One circuits – a condition that Ecclestone would include in his contracts with promo
ters – which would then be sold on at highly lucrative rates to advertisers. Ecclestone denies that he bankrolled the company’s early capital costs, although others believe that he did. Said Tee: ‘I once jokingly asked Bernie where he [McNally] had got the money from, and he looked at me in a way that suggested I should have known better. McNally was the just the front man.’
McNally’s appointment was one that Tee did not envy. ‘It would have been me he’d have been shouting at rather than McNally,’ he said. ‘I remember him once going berserk and shouting at McNally because a sign was in the wrong place. Anyone who worked for him he treated abominably.’ McNally would have already been aware of Ecclestone’s pugnacious style. A former business associate recalled seeing McNally at the Brabham team works as he and Ecclestone, driving a Mercedes, were about to drive away. ‘Paddy’s talking to him as the window’s going up and Bernie’s driving off, leaving Paddy just standing there, talking to himself.’
The arrival of AllSport Management led to the founding of the Paddock Club – an idea suggested to McNally by Ecclestone, who had seen the success of a similar money-spinner introduced by Mark McCormack, the American sports management agency boss, at Wimbledon – into whose exclusive, highly priced designated area corporate hospitality tents were moved to resolve Ecclestone’s displeasure at their haphazard siting. The company’s early trading figures, though, proved so disappointing that it was not long before McNally was ready to quit. ‘After the second year, he said he didn’t think it was going to work,’ said Ecclestone. His advice was to ‘give it a little bit longer, because you’ve spent all that money in promoting it … it would be silly to walk away now’. Business growth proved Ecclestone right. In his words, McNally ‘has done very well for himself’.