by Terry Lovell
Hunt was a natural for the media. A good-looking, 29-year-old former public schoolboy, whose social life saw him featuring as frequently in the gossip columns as the sports pages, his contest with Lauda had the British newspapers arousing patriotic passions in every reader. Lured from the cash-strapped Hesketh team by the Marlboro chequebook towards the end of the previous season after Emerson Fittipaldi suddenly decided to move to the Brazilian team Copersucar, he was the right driver at the right time. It was something that Ecclestone recognised, too. He offered Hunt $1 million for a one-year contract, at that time the biggest deal ever offered to a world champion. Ecclestone planned to set up a company to promote and market Hunt, which, in his words, would ‘turn him into a very big cult figure’.2
To Ecclestone’s great disappointment – ‘he’s a very silly boy’ – Hunt refused the offer on the advice of his brother, also his accountant and agent, who had successfully negotiated three major advertising contracts. He believed that the figure fell some way short of his younger brother’s true earning potential. It would also have fallen foul of his contract with Marlboro McLaren, with whom he went on to win nine of his ten Grands Prix before retiring midway through the 1979 season, after 18 months with the Wolf team. Five years later Ecclestone, still convinced of Hunt’s worth to Formula One in the publicity it would generate, offered the former world champion a staggering £2.5 million to make a Grand Prix comeback. Once again Hunt refused, claiming he saw no point in risking his neck for money he didn’t need. Whatever his wealth, tragically he would not enjoy it for long. His lifestyle became increasingly intemperate and, in 1993 at the age of 46, he died of a heart attack.
In less than a decade Formula One, in profile, wealth and structure, had undergone enormous changes. With television’s door gradually creaking open, Ecclestone, having strong-armed television rights from organisers who, for the most part, had no idea of their potential, while others were glad to give them away simply for the promotional value of television coverage, was ready to storm through it. In October 1977 he described television as ‘the big key’ to the future of Formula One and has since been credited as the one who had the foresight to see the potential riches that television coverage could offer. But the kudos is misplaced.
As early as 1973 another, no less sharp than Ecclestone, had already spotted the promise of television. He was American sports management agency boss Mark McCormack, then in his early forties, who had been hugely successful in signing up top US golfers – in the same way that Ecclestone would later represent the teams – which enabled him to negotiate highly lucrative deals with commercial television stations. Hoping to establish a similarly enterprise in Formula One, he made a presentation to senior management at the Lausanne headquarters of Philip Morris, suggesting a forging of resources and expertise. The company turned down McCormack’s proposal because it believed it was big enough to go it alone. Later, behind the scenes, senior executives scuppered his approach to the Automobile Club de Monaco, the organisers of the Monaco Grand Prix and the Monte Carlo Rally, whose promotional interests McCormack was keen to handle. Philip Morris blocked the move because it saw the Monaco Grand Prix as a key promotional event – one year it flew the entire US board to the event at a cost of more than $200,000 – and feared that McCormack’s control would soon see sponsorship costs rocket. Organisers and promoters in Formula One came to know this same fear.
McCormack, who had represented Graham Hill and Jackie Stewart – his fee to Hill was 50 per cent – had been unsuccessful because, unlike Ecclestone, he had no control over the teams and, consequently, no power to dictate terms to the organisers and the sponsors. But it was McCormack’s success in exploiting television coverage of golf in the US, and his efforts to launch a similar promotional strategy in Formula One, that had alerted Marlboro to what television coverage had to offer. McCormack’s enterprise had not gone unnoticed by Ecclestone, the opportunist extraordinaire. During the late seventies he took it as his own to begin the creation of his vast riches.
Ecclestone’s approach in the early days to the selling of television rights negotiated from organisers was piecemeal. That the commercial potential of television was beginning to emerge in mainland Europe was evidenced by the fact that coverage of the Monaco Grand Prix in 1976, for example, was seriously threatened because the cost per camera had escalated beyond what the French television company believed the race was worth. Due to similar demands elsewhere, Eurovision, the trading arm of the Geneva-based European Broadcasting Union (EBU), which represented the negotiating interests of public-service broadcasters, was said to have discouraged television companies from broadcasting live any of the Grands Prix during the 1979 season.
Ecclestone averted any direct confrontation by joining the club. He commissioned a small television production company to provide video coverage, the rights of which he sold on an ad hoc basis through Eurovision. It was not an ideal arrangement to Ecclestone: profits that he could be enjoying were going elsewhere. He by far preferred the hands-on control of an in-house operation. It led to the formation of his own production company – FOCA TV, which consisted of three cameramen, an editor and their dog. In 1982, a little more than 12 months after the FOCA and the FIA had signed the Concorde Agreement, which granted the constructors the television rights, he signed a three-year contract with the EBU to market coverage of Formula One. (It was, incidentally, an EBU official who alerted Ecclestone to the unsightly display of advertising display panels and signage at Formula One races. He resolved the problem during his negotiations with organisers by claiming the rights, which he passed on to the lucrative benefit of AllSport Management.) In 1982 International Sportsworld Communicators (ISC) was formed by Ecclestone to market the television rights of non-Formula One events. Hired to market these rights, and also appointed as a director of the company, was an Argentinian called Alejandro Ignacio Deffis-Whittaker, who had been in charge of Marlboro’s television activities. He had moved from the advertising industry in his home country to work with Marlboro in Spain and London, where, as part of the international sports promotion group, he specialised in organising the strategic positioning of racetrack banners and negotiating with television crews to ensure maximum coverage.
According to his successor, Deffis-Whittaker ‘did a pretty good job at raising the profile and revenue’. It seems he did too well. On a small salary but with a big commission on sales, he enjoyed success that was said to have led to a dispute with Ecclestone over money allegedly due to him, and, finally, his departure. His successor was Phil Lines, who had been head of group marketing at a leading television news agency, later acquired by Reuters. He had also played an executive role at an international sports marketing agency selling commercial and television rights to the World Cup and Olympics. But when he arrived for his first day at his new employer’s offices in Knightsbridge, Lines realised that he was on a new learning curve.
‘I remember walking into Princes Gate at about 9.25 am, with Bernie standing there with his watch, saying: “It’s a 9 o’clock start.” From that moment on, I knew this was not like anywhere else, where you basically were judged on your results and what you achieved. It was very obvious that everything revolved around Bernie and evolved from Bernie. He had a group of rather sycophantic people who had been there for a number of years who didn’t move without Bernie saying move. Unfortunately, that for me created problems, in that everything went through Bernie and, of course, it was far too much, far too much, for any one person to be able to handle. In a normal company you would have a structure with ‘this would be your responsibility, this would be your responsibility’, [but] with ISC everything went through to Bernie and sat on his desk, and unless you got a decision out of Bernie you were stuck. I found that very frustrating. If you wanted to do a deal whereby you wanted to sell some Formula One archive film to one of the Formula One sponsors, you could negotiate a price and it could be agreed, but it would have to go to Bernie for his approval. You constantly had people who
wanted to do deals but you couldn’t [complete them].’
Eight months later an exasperated Lines decided to quit. ‘I went to see Bernie and said that it was not the way I could work. He said goodbye. I was Bernie’s adviser on a day-to-day basis on television matters, stretching from some production-related issues through to commercial sales, including marshalling and keeping out renegade cameramen. In terms of man management, Bernie is not the sort who sits down with you and says, “How do you feel, how’s it all going?” You would sometimes be invited down to his favourite pub, but you would always be part of the entourage. The pub was round the back of Princes Gate. You would always end up listening to Bernie. It’s his show. The only people who were there by the time I left were accountants and lawyers.’
Lines worked for a brief spell as an independent consultant before rejoining his former company. In the meantime, though, he did some work for Ecclestone, which remained unpaid. It was settled after he received a phone call from his former boss, who wanted to know whether his new job came with a company car. Told that it did, Ecclestone enquired about his wife’s mode of transport, explaining: ‘I’ve got this Alfa Romeo sitting outside. Come and get it, it’s yours.’ Said Lines: ‘It was instead of paying my fee, which was about £2000. The Alfa Romeo was certainly worth a good deal more.’
By 1985 FOCA TV had expanded considerably, in size and revenue. It now had a full-blown production team broadcasting Formula One, through the EBU, to an audience of more than one billion in 95 countries, according to a statement issued by the FOCA. Television was, said Ecclestone, ‘a vital element of the continued commercial success of the sport’. That year he renewed the contract with the EBU for a further five years, which would gross a total of 11.2 million Swiss francs (£3.55 million) in the 32 countries in which the EBU had territorial rights, although in 1990 the total television rights revenue was about $3.3 million. But that was small beer compared with the riches to come, thanks to the emergence of privately owned commercial television stations, and two events that took place in 1987.
The first, in February, was his appointment as vice-president of the FIA’s promotional affairs. It was made by Balestre, whose authority had been made complete the previous year by his appointment as president of the FIA, an office he now held in addition to the presidency of the FISA. The newly created title was assigned to Ecclestone to mark the FIA’s gratitude for the money his marketing efforts were adding to its financial well-being. That, at least, was the official version. The reality was that by bringing Ecclestone into the establishment Balestre hoped to neutralise him.
The person who put the thought in Balestre’s head was Max Mosley, who had recently been appointed president of the FIA’s Manufacturers’ Commission, responsible for technical, sporting and off-road sub-commissions. The circumstances came about after he had succeeded, against all the odds, in persuading the Commission to support Balestre in his decision to ban a Peugeot group B rally car, which led to the company suing Balestre for tens of millions of francs, an action which it eventually lost on appeal. This news, delivered personally to Balestre in the offices of the French motor sport organisation, the Fédération Française du Sport Automobile, in Rue du Longchamps, Paris, where he had been waiting on tenterhooks, was received with unbridled joy expressed in a full Gallic embrace.
In this cordial atmosphere Balestre began to confide in Mosley about the ‘worries’ that he had about Ecclestone. The principal cause of his anxiety was the fear that Ecclestone and the teams might break away from the FIA to set up a rival series. There existed no contract between the FIA and the FOCA to legally prohibit such a split. Balestre, knowing Mosley’s closeness to Ecclestone, sought his advice. Mosley suggested that he might copy the practice deployed by the English establishment down the ages when it wanted to quieten a revolutionary – make him a member of the establishment. The idea clearly attracted Balestre. Thus, it wasn’t long before a beaming Balestre announced the appointment of a new FIA establishment figure to look after its promotional affairs – the ultimate poacher turned gamekeeper. But there were many who were far from pleased by the news. They feared that too much power was being put into Ecclestone’s hands. His new role gave him executive authority not only in Formula One but in all motor sports authorised by the FIA, which, in the latter, would be exercised by ISC to their considerable financial detriment.
The second event took place in September – Ecclestone’s recruitment of a 35-year-old Swiss, Christian Vogt, a highly experienced media consultant, who had been handling the TV rights outside of Europe for the Union of European Football Associations (UEFA), the Fédération Internationale de Football Association (FIFA) and the International Amateur Athletics Association (IAAF). Ecclestone phoned Vogt to arrange a breakfast meeting at the Sheraton Park Tower Hotel, near his luxurious offices in Knightsbridge. With a considerably expanded portfolio of television rights to market thanks to his new appointment, Ecclestone was very much in need of someone of Vogt’s skills. By their last cup of coffee the terms of Vogt’s employment had been agreed. Vogt was under no illusions about working for Ecclestone. He knew of his reputation as a ruthless taskmaster but he was ambitious for the challenge and financial rewards that his new boss had put before him.
While he also oversaw the marketing of non-Formula One events through ISC, Vogt was responsible for increasing the earnings potential of Formula One television rights. It was the emergence of privately owned commercial television companies in the mid-eighties that caught his imagination, which inspired a radical change in the television marketing of Formula One. He suggested to Ecclestone a new route. Instead of going through the one-shop market of the EBU, which set broadcasting fees, he proposed that Ecclestone, in negotiating terms with a host broadcaster, should also acquire the exclusive rights to sell its coverage to commercial broadcasters in other countries. At first, said Vogt, Ecclestone was sceptical. ‘It took quite a while to convince Bernie to do that, because it was a high risk.’
He added: ‘First of all, going country by country meant a lot of hard work, and nobody was doing it in those days. Nobody could do any TV sports deal without going through the EBU. If it had failed, sure, we could have gone back to the EBU, but they would have had us by the curlies [in future negotiations].’ But it turned out to be the right idea at the right time. Vogt set up a round of secret discussions, first with Canale 5 in Italy, which was then owned by Silvio Berlusconi, followed by TF1 in France and the biggest independent television company in Germany, RTL.
‘It was very attractive for them to have Formula One, but the risk was that we were going with people who didn’t necessarily have the exposure or geographical coverage that was needed in these territories. The advantage was that as we were all starting together, so to speak, they did a proper job. Even so, it was a big gamble. For many people it was a stupid thing to do: why spend two years working on all these countries individually, when you could do one contract [with the EBU] and be happy?’ The answer, of course, lay in the vastly more profitable deals that could be negotiated free of the EBU’s constraints. Berlusconi, for example, paid an estimated $1 million a race, according to a senior EBU official.
The freedom of negotiation also enabled Vogt to shrewdly insist on two contractual clauses that were essential in ensuring the most effective coverage: television companies not only had to take an entire season’s races but broadcast them live. ‘That was a key issue. The other one was that they had to do live qualifying and post-race reports. If you look at the old EBU deals, there was absolutely no commitment. The public-service broadcasters went on air when they felt like it. They would stage Monza live but not put on the next Grand Prix. It didn’t do a thing for Formula One. It was a joke to come in whenever they wanted to. My idea was to squeeze the lemon as much as it could be squeezed, that they can’t just put the races on when it suited them, that they had to do it live, that they had to have pre-race programmes and all that.’
When word reached the EBU, it was
believed the breakaway was doomed to fail, that Ecclestone could not succeed against the collective marketing power it represented. Press spokesman Jean-Pierre Julien said: ‘At that time we didn’t believe it would work. Of course, since then we have seen that it was possible.’ In fact, its success was said to have been the commercial turning point for Berlusconi’s Canale 5, which was given the exclusive contract to screen the Italian Grands Prix at both Monza and Imola. Public-service broadcasters, aware that their bargaining strength no longer lay in membership of the EBU, began negotiating with FOCA TV.
The EBU’s monopoly on the TV rights marketing of Formula One was over, and, in Europe alone, opened up a potential audience of nearly 400 million to Ecclestone. The air-time of Formula One, estimated Vogt, was doubled. Multiplied by the number of viewers, it meant that Ecclestone was able to increase by ‘about tenfold’ the sum he had been receiving through the EBU. ‘We weren’t in a hurry,’ he said. ‘The deals were done in a top-secret way… I mean, it was very competitive … we made it competitive, because we played one off against the other.’ The annual accumulative global television viewing figures increased from 17 billion under the EBU to 26 billion.