by Terry Lovell
With the company based in Geneva, it is not possible to gain access to company accounts to discover the current profits of AllSport Management, but it is possible to fix an approximate figure for the turnover of the Paddock Club. In 1999 – McNally declined to give information on more recent costs – a three-day weekend for one in the Paddock Club cost between $1500 to $2000, for which, in the words of a public-relations consultant, up to 3000 punters receive ‘very nice food and drink, a grandstand view of the circuit and a goodies bag to take away, which probably costs about £10’. Calculated on a full house at, say, $1750 over 17 Grands Prix, the estimated revenue totals $89 million per year, which, no doubt, is a poor indicator of its final profits figure. The company also receives a share in the substantial rental fees of all off-track retail merchandise trailers, and in the constant quest to squeeze every penny out of Formula One, a £1-million-a-year deal with London-based Haymarket Publishing Ltd for the rights to publish motor sport programmes in its magazines Autosport and Autocar.
For someone who has consistently claimed to have no financial interest in the company – ‘I never have been [involved] at all, any more than I am involved in any of the other race teams. I try to help where possible, where it helps us’ – Ecclestone has over the years continued to exercise a remarkable degree of control. The principal director of a company which handled AllSport Management’s Formula One interests in the UK claimed that when McNally decided to extend the company’s activities to include motor sport at Brands Hatch and Donington Park, he was told by Ecclestone to concentrate exclusively on Formula One. McNally promptly obliged.
The UK company’s relationship with AllSport Management, which lasted for four years, finally came to an end, incidentally, after constant last-minute changes of decision and demands for lower prices made it impossible to achieve a viable profit margin. There was also a major problem over the payment of VAT (Value Added Tax), which led to Customs and Excise inspectors combing through the UK company’s books in an unsuccessful effort to uncover any irregularities in AllSport Management’s operation. The payment of VAT, which the UK company had incurred and paid on behalf of AllSport Management, was described by the principal director, as ‘a big problem’. It caused McNally to bring in-house the promotion of the company’s Formula One interests in the UK. They wanted it ‘very, very close to their hearts, and that was it’.
Today McNally, the one-time flesh-pressing gofer and PR flunkey, is one of the richest men in motor sport, with extensive property interests in Switzerland and Britain, including a £5-million estate in Wiltshire. And, like many in Formula One, he owes it all to the favour and patronage of Ecclestone.
During these formative years Ecclestone worked exceedingly hard to expand the Formula One calendar. By the mid-seventies he had restored Argentina to the calendar after a 12-year absence, and had completed successful negotiations with politicians, industrialists and businessmen for Grands Prix in Sweden, Brazil, Belgium, Japan and Long Beach, USA. Ecclestone claims never to have been in awe of the people with whom he negotiated. Nor, it seems, did he allow himself to be intimidated. In negotiating the return of the Argentine Grand Prix in 1972 officers representing the country’s military junta flew to London for a meeting with Ecclestone, Mosley and Andrew Ferguson at a London hotel.
Accompanying the officers were members of the Argentinian Embassy, who arrived with an old-fashioned tape-recorder with two large spools through which the tape ran. It was assumed a recording of the meeting was required back in Argentina for intelligence reasons, although its purpose wasn’t made clear. But Ecclestone didn’t care for their pompous and high-handed military attitude – or for a recording of the meeting. During an early stage of the meeting, while Mosley held the audience, he feigned to stretch his legs. Casually passing a table on which some feet away the tape recorder was positioned, he deftly placed a piece of paper in one of the spools before returning to his seat. It was some time before anyone noticed the tape piling up on the floor.
The negotiations surrounding the Brazilian and Swedish Grands Prix were more indicative of his opportunistic and commercial flair. With the growing national acclaim of Brazilian driver Emerson Fittipaldi, he persuaded Rede Globo, the country’s national television network, to sponsor a non-championship race at Brazil’s Interlagos circuit in 1972. (It proved a tremendous success, although at one stage it seemed in great doubt after a last-minute delay in the payment of the teams’ fees. Mosley was dispatched to Rio de Janeiro to collect the money in cash and then phone Ecclestone at the Excelsior Hotel at Heathrow Airport, where the teams were literally waiting to load their cars. Mosley informed Ecclestone and the teams – they wanted to hear his personal reassurance, such was the distrust within the F1CA – that, yes, everything was fine. But Rede Globo hadn’t actually paid the money. Mosley was told that because of the country’s economic problems, the only way the company could get the money in cash would be on the black market at a prohibitive rate. In any event, it would be illegal to take the money out of the country. However, Mosley was informed, they could get legal permission to transfer the sum to the F1CA’s bank account risk-free although not immediately. Mosley, as he picked up the phone to London, decided to take a chance.)
That year Fittipaldi won the first of his two World Championship titles, which boosted considerably Ecclestone’s efforts to persuade senior members of the Brazilian government that the country really ought to have its own Grand Prix. The talks led to a sponsorship deal financed by Rede Globo and the appearance in 1973 of the Brazilian Grand Prix as a regular round of the Formula One World Championship series. In Sweden, Ecclestone again went to the top. He secured sponsorship for the first Grand Prix at Anderstorp, also in 1973, by enlisting the support of Prince Bertil, who was instrumental in persuading the Japanese electronics firm Hitachi, who had major interests in Sweden, to agree to foot the sponsorship bill. Elsewhere, as in Nivelles, Belgium, which from 1973 to 1975 staged a Grand Prix on alternate years with Zolder – a diplomatic compromise to the French- and Flemish-speaking regions – Ecclestone set himself up as the promoter, the first of a number of similar arrangements that would gradually increase his power and personal riches.
His role as promoter, he insists, was a time of considerable personal risk for him, although he enlisted, according to a senior F1CA member at that time, the aid of the constructors to minimise it. He persuaded them to agree to cap their share of the money to improve the circuits’ chances of success.
A week or two after Ronnie Thomson had made his critical comments on Formula One in Geneva in January 1973, on the other side of the world three men were relaxing on a beach in Guaruja, Brazil, playing racquet ball. They were Ken Tyrrell, the boss of the Tyrrell team; Lotus lead driver Emerson Fittipaldi, the 26-year-old Brazilian who had won the World Championship the previous year; and Patrick Duffeler, a 29-year-old Brussels-born American, who had moved from the New York head office of Philip Morris in March 1970 to become a director of the company’s European, Middle East and African promotions at its headquarters in Lausanne, Switzerland. But it was inspiration, not perspiration, that they were looking for. The informal gathering had been assembled to discuss the concept of a ‘super’ team to defeat Colin Chapman’s Team Lotus, which had completed the double by also winning the Constructors’ Championship title.
Each man had a compelling interest in the conversation. Tyrrell’s team had won the constructors’ title in 1971 and had come second to Lotus in 1972, but he was uncertain of the renewal of his contract with his major sponsor, Elf, the French state oil company. The kind of serious money that Marlboro was pumping into Formula One could turn Tyrrell into that ‘super’ team, with Fittipaldi as lead driver. The proud Brazilian, for his part, was ready to leave Lotus – he was angry that Chapman had signed Ronnie Peterson from March as co-lead driver for the 1973 season. That evening, without Tyrrell, Duffeler and Fittipaldi continued looking at the options, which, in the final analysis, didn’t include Tyrrell. The two
teams they considered to have the greatest potential were Bernie Ecclestone’s Brabham team and Teddy Mayer’s McLaren.
Over the months ahead Duffeler spent virtually every working hour exploring and examining the problems and practicalities of creating a ‘super’ team. He believed it would be the only way of ensuring the success of the challenging brief he had been given by Thomson: to build the winning Formula One team that the Philip Morris management in New York wanted. It was a quest that had begun, in fact, two years earlier, when Thomson decided that Formula One offered a unique opportunity to introduce the Marlboro brand throughout Europe without having to decide on any particular advertising image, such as the macho cowboy promotion which worked well in America. He also believed that through an international sport such as Formula One his company could in one move circumvent complex tobacco advertising restrictions which varied from country to country. The team which had attracted Thomson’s attention at that time was Louis Stanley’s BRM, the only British factory-backed team producing its own engine. Unlike the ‘garagistes’, the company that Stanley grandiosely described as the ‘Ferrari of England’ had the corporate substance and image that Thomson believed offered the best return on the Philip Morris sponsorship dollar.
Stanley, who had been heavily funded by his wealthy industrialist brother-in-law, Sir Alfred Owen, whose family owned BRM, had a sponsorship deal – one of the first – with Yardley, the perfumery division of British American Tobacco, worth £50,000 over two years. But it was a relationship that was failing to come up to Stanley’s financial expectations. Yardley, he complained, was unwilling to stump up the cash he considered necessary to fund engine development. Known as a ‘charming and pompous dilettante’ – or ‘Big Lou’ and ‘Lord Trumpington’ behind his back – who travelled everywhere in a chauffeur-driven Rover with a permanent suite at the Dorchester, Stanley, on hearing of Philip Morris’s intention to promote its Marlboro brand through Formula One, was ready to dump Yardley.
He laid the ground in October 1971, after attending the funeral in Switzerland of Jo Siffert, a 35-year-old Swiss driver who had been killed in an end-of-season Victory Race at Brands Hatch, when his BRM P160 hit a bend at Hawthorn’s Corner, causing the car to burst into flames and his death from smoke inhalation. Ironically, his rides with BRM were funded by Porsche, who agreed to foot the bill as long as he remained with them as their number-one works driver. The moment the service, in Siffert’s home town of Fribourg, was over, Stanley, accompanied by his wife, Jean, drove off in his Mercedes 600 on a 70-kilometre journey to the headquarters of Marlboro in Lausanne, a ten-storey glass tower overlooking Lake Geneva, to present Ronnie Thomson and Albert Bellot, vice-president of marketing, with his vision of the benefits of a sponsorship deal between Marlboro and BRM.
It was a grand proposal, covering not only Formula One sponsorship, but also plans to build and market a Marlboro BRM sports car, golf carts and a series of accessories from watches to sportswear. A two-year contract between the two companies was signed the following month by Stanley and Thomson at the Dorchester Hotel in London. To BRM it was worth in excess of £100,000, plus bonuses for championship event wins and funds for other projects. At a time when the annual budget of running a Formula One team was between £100,000 and 150,000, it was a good deal more than Stanley had been getting from Yardley. It was also decided that Marlboro BRM, which came to be hyped as the Marlboro World Championship Team, would not be fielding just two or three cars in each race, but five – the drivers who were signed up were Jean-Pierre Beltoise of France, Peter Gethin of England, Helmut Marko of Austria, Alex Soler Roig of Spain, Gijs van Lennep of Holland, and Howden Ganley of New Zealand. Thomson was satisfied that the foundation was in place to considerably heighten the profile of Marlboro throughout Europe. Duffeler was assigned the task of making it all work.
Most of the constructors, no admirers of Stanley, had also beaten a path to Marlboro, including Ken Tyrrell, who flew to Switzerland for a secret meeting with Thomson and Duffeler – it proved no more successful than the informal Brazilian beach meeting with Fittipaldi and Duffeler two years later – followed by Frank Williams, whose team was in danger of going under from severe cashflow problems. Williams, described as ‘charmingly persistent’, was sufficiently charming and persistent to persuade Duffeler to involve Marlboro in a two-year deal with the Milan-based manufacturer Iso, who produced a limited edition of the Iso Lele for Frank Williams Racing Cars with the Marlboro World Championship Racing logo on the sides. But, elsewhere, Duffeler was having serious problems with BRM.
Despite Marlboro’s generous funding, Stanley was constantly on the phone asking for more money to fund engine development costs to improve horsepower – the BRM engine was barely delivering 425bhp against the Cosworth V8’s 470bhp and Ferrari’s claim to exceed 500bhp. There were other worrying problems that were a crucial part of the whole. BRM’s team manager Tim Parnell, the son of pioneer Formula One racing driver Reg Parnell, was honest enough to admit to Duffeler that BRM, due to cashflow problems, was consistently short of spare parts, sufficient sets of tyres for the five cars, and, not least, mechanics. Performance on the track confirmed what was becoming blindingly obvious – the BRM cars simply weren’t competitive.
By mid-1972 the team of drivers was also unravelling, for reasons ranging from injury and lack of personal funding to conflict with the BRM management. Marlboro BRM finished the season seventh, with only Matra and Brabham doing worse. Jean-Pierre Beltoise, the team’s most talented driver, finished eleventh in the drivers’ championship. True, the team had won the highly prestigious Monaco Grand Prix but that was due to Beltoise’s driving skills in appalling weather rather than the performance of the car. Across the Atlantic, Philip Morris management was critically monitoring the increased funding of a highly visible team that was not winning races. At the 1973 Dutch Grand Prix in July, Duffeler broke the news to Stanley that the two-year contract would not be renewed.
By now Duffeler was working on the radically different strategy that he had put to Thomson and Bellot towards the end of 1972 – the creation of a ‘super’ team, the concept that, in between playing racquet ball, he had been kicking around with Tyrrell and Fittipaldi on a Brazilian beach at the beginning of that year. This time, Duffeler avowed, Marlboro would become more closely involved with day-to-day management, even to the selection of the drivers. Duffeler received Thomson’s backing and was given a free hand, plus a substantially increased budget. He would need it. When the decision was taken in late 1971 by Thomson for Philip Morris to move into Formula One, a preliminary annual budget of $115–150,000 was allocated. Within months it was increased by Bellot to $1 million, by June 1972 to $1.5 million, and to $3 million after Duffeler received approval for his ‘super’ team concept.
The driver selected to lead the team was, predictably, Emerson Fittipaldi – on a basic contract worth $250,000, which compared to no more than $10,000 paid to some of the Marlboro BRM drivers a little more than a year earlier. To help offset the level of escalating costs, Fittipaldi introduced Duffeler to John Goossens, a senior member of Texaco Belgium’s marketing team, who went on to become director of Texaco racing worldwide before eventually becoming chief executive officer of Belgacom, the Belgian telephone company. There now remained the question of the team itself: whether it would be Brabham or McLaren, which Duffeler was by now convinced were the teams with the greatest potential. With the 1974 season not far away, a round of furious discussions opened simultaneously with Ecclestone and McLaren’s Teddy Mayer. The central issue was who would provide the better engineering and team of mechanics.
Brabham’s Gordon Murray was considered to be the most impressive, yet Mayer was considered a solid manager, who had overcome polio at an early age to become a master skier, a man with a will of iron and a clear, sharp focus. His team manager, Alistair Caldwell, was also rated highly, particularly by Fittipaldi. Mayer, excited by the prospect of having Fittipaldi as his lead driver, was ready to leap naked
through a hoop of fire for the contract. But there was a considerable obstacle in his way. His team was tied to Yardley, a subsidiary of British American Tobacco, which would not agree to release Fittipaldi from his contract to join a team to be sponsored by a rival company. Despite Mayer’s best efforts, the company refused to co-operate. It was reinforced by a threat of legal action from British American Tobacco. Mayer was in a bind.
In the meantime, Ecclestone was pressing Duffeler to make a decision in favour of Brabham. With Mayer seemingly out of the race, Duffeler decided on a preliminary agreement with Ecclestone, which, bankrolled by Marlboro and Texaco, would come to be worth well over £100,000 a year (worth £750,000 in 2002). The news was announced to Ecclestone during the early afternoon of Saturday 1 September 1973, at a two-level villa in Lonay, situated in a picturesque valley ten kilometres west of Lausanne, where the Fittipaldi brothers – Emerson and Wilson – resided with their families in between races.
Ecclestone naturally appeared delighted with the news and a few minutes later, says Duffeler, invited him to take some fresh air on the balcony. What followed, he claims, left him stunned. ‘Bernie asked me if he could take care of me, that is, with a financial gift.’ Left momentarily speechless, Duffeler declined Ecclestone’s offer, before, a moment or two later, they rejoined Emerson Fittipaldi and his wife, Maria-Helena. Presently, the two men left for Duffeler’s home, a ten-minute drive away, where they had a celebratory glass of champagne. The day’s business was concluded with Duffeler driving Ecclestone to Geneva Airport, a 35-minute journey, for his return flight to England. But, that evening, there was a sudden turn of events.
Duffeler received a phone call from Teddy Mayer to find out whether the contract had been closed. He was relieved to hear that it hadn’t. Mayer, making it clear that he would close down McLaren rather than lose the opportunity of a contract with Marlboro, Texaco and Fittipaldi, said he believed he had found a way round the problem with Yardley. He confided in Duffeler that he proposed offering Yardley an alternative to an expensive legal dispute – he would split up the team, with McLaren’s joint managing director, Phil Kerr, looking after a car driven by Mike Hailwood under Yardley colours, while he managed the Marlboro-Texaco team, with Denny Hulme, his lead driver, sharing the number-one slot with Fittipaldi. Duffeler was delighted. He agreed to stall further discussions with Ecclestone until Mayer had had time to talk with Yardley. British American Tobacco, aware that they had been outmanoeuvred, blinked and accepted. If nothing else it gave Yardley a face-saving exit from a sponsorship programme which, with its constantly escalating costs, they could no longer afford.