by Terry Lovell
From its ashes two months later emerged EuroBusiness, of which Rubython was the editor and Ecclestone the bankroller, reputedly investing £4 million in the new venture – £1.5 million in capital and the rest in promoting the magazine at Grand Prix meetings. In July the magazine devoted its front cover and a four-page article, under the headline ‘Europe’s Most Powerful Man’, to another flattering profile – but this time on van Miert, whose report on Formula One Administration and the FIA had yet, of course, to be published. And, in its April 2000 issue, EuroBusiness once again turned its searing spotlight on Ecclestone and Mosley – devoting no fewer than 55 pages in resounding praise of their management of Formula One.
But Ecclestone’s involvement with the magazine threatened to cause him some embarrassment. On 22 September 1999 its finance director, Jeanette Hunt, walked out of her office, at the insistence of her husband, PR consultant James Hunt, after alleging that she’d been asked to prepare false management accounts in order to extract more funding from Ecclestone, whose company, Eurobusiness Publications Ltd, had a majority shareholding in the magazine’s publishing company, European Business Press Ltd. She subsequently further alleged that, unbeknown to Ecclestone, a series of fraudulent activities had taken place, claims that she repeated to Ecclestone at a meeting on 30 September. She was, she said, prepared to return to work if a management restructuring took place. Hunt left Ecclestone’s office confident it would take place. When it did not, she wrote a stinging letter to Ecclestone on 29 December railing at the ‘appalling treatment’ she had received. On 21 January she received, and accepted, an offer of £8000 from Mukesh Adani, a director of European Business Press Ltd and one of Ecclestone’s trusted lieutenants, in full settlement of any claim against the company.
However, Hunt decided to pursue her grievance with the Industrial Tribunal and filed a complaint on 4 March 2000. An article indicating that she would blow the lid off Ecclestone’s business empire at the tribunal hearing was published a short while later in Punch, the monthly magazine, whose ongoing financial losses forced its owner, Harrods boss Mohamed Al Fayed, to bring an end in May 2002 to its 161-year history. Clearly based on detailed information that could only have come from within the company, the piece was evidently designed to bring pressure on Ecclestone. Hunt was, it said, ‘determined to expose his business methods and commercial secrets’. To Ecclestone, such a threat would have been brushed aside: whatever they were, it is certain that Hunt had no knowledge of them.
Following a provisional hearing on 15 December 2000, the Industrial Tribunal resumed at Stratford, east London, on 11 June for a two-day hearing, which found in favour of the respondents, European Business Press Ltd (and also its predecessor, Business Age Magazine Ltd), and Eurobusiness Publications Ltd. Other factors aside, not least that Hunt had effectively dismissed herself, the application was dismissed as out of time – it had not been filed within a period of three months as required by UK employment law. Silverman Sherliker, solicitors for Hunt, argued unsuccessfully that her ‘negotiations’ with Ecclestone and others had not made it ‘reasonably practical’ for her application to be submitted any earlier, grounds which allow an extension of the three-month time limit.
This episode finally came to a peculiar close more than two years later when Hunt wrote to Mukesh Adani, sending similar letters to Rubython and Ecclestone, apologising profusely for allegations ‘which were in fact made up. I very much regret having accepted a settlement from you of £8000 that I then sued the company for unfair dismissal and only succeeded in wasting everybody’s time. Please accept my sincere apologies for conduct I now realise was wholly unsatisfactory.’
Through their solicitor, Nicholas Lakeland, the Hunts declined to comment further.
Although it had come too late to make any difference to the fate of the flotation, Wolfgang Eisele and his lawyer, Dr Wolfgang Deselaers, suffered a considerable set-back in the Frankfurt district court on 18 March 1998 when, contrary to their confident expectations, judgement in the legal action against Ecclestone’s company, International Sportsworld Communicators (ISC), over the television rights to European Truck Racing went against them. The three judges decided that if there had been a violation of the television rights or European competition law, it could only be contested by the organisers who were directly affected, rather than a television company such as AE TV Cooperation, whom the court considered to be a third party. Eisele and Deselaers were stunned by the decision. Nine months earlier – on 4 June 1997 – the very same court had agreed, on Deselaers’ application, to issue an interim judgement preventing the FIA, and, consequently Ecclestone, from marketing the European Truck Racing Cup which Eisele’s company, AE TV Cooperation, had once successfully covered and distributed for the organisers. The legal validity of Deselaers’ application had in no way been questioned. He lodged an immediate appeal.
On the same day the judgement was announced, Mosley – with Ecclestone’s endorsement – made a political gesture considered to be a peace offering to Brussels. He issued a statement relinquishing the FIA’s claim to the television rights of all motor sports other than Formula One, the World Rally Championship, the World Grand Touring Car Championship and the Formula 3000 International Championship, subject to clarification by the European Commission. However this gesture might have been perceived politically in Brussels, little was being surrendered financially. The television rights to these four championship series accounted for more than 90 per cent of television revenues.
The way in which the news was communicated by ISC to the organisers provides another example of the degree of power that Ecclestone wielded within the FIA. For the letter sent to the organisers of the European Rally Championship, European Championship for Rallycross Drivers and the Electro Solar Cup was dated 13 March – five days before the World Motor Sport Council had met to discuss and approve the decision to return the television rights. Ecclestone’s sphere of influence within the FIA was such that he could confidently send out such a letter without fear of error or contradiction.
Further evidence of Ecclestone’s control of motor sport in general, again ably assisted by Mosley, is offered by the way in which the World Grand Touring Car Championship came into existence. As with other series, that control was made possible through the FIA introducing in October 1995 a rule which gave Ecclestone the marketing rights of all non-Formula One events through ISC. It was used on this occasion to bring about the downfall of a successful series known as the BPR Global Endurance GT Cup, and replaced by the World Grand Touring Car Championship, the creation of Ecclestone and Mosley.
The BPR GT series was the brainchild of French businessman and motor sport enthusiast Patrick Peter and two associates – fellow countryman Stéphane Ratel, who was then Competition Director for Venturi Competition, a small French car manufacturer, and who, in 1996, launched the Lamborghini Supertrophy, and Jürgen Barth, head of Porsche’s customer relations. The three men came together in 1993 and founded a company called the BPR Organisation to stage endurance races for GT cars, the first of which was held at the Paul Ricard circuit in January 1994. In 1995, at the request of Peter and his associates, the series was accredited as an FIA international series, and by 1996 its 12-race calendar had become sufficiently popular throughout Europe and Japan to attract television coverage by Eurosport, the largest pan-European television network. However, its increasing success was soon to be cut short.
In September 1996, hour-long television coverage of a round of the series at Brands Hatch, which received second billing to the Portuguese Grand Prix, was followed by a fax from Ecclestone to Barth stating that unless the television rights to the series were assigned to ISC, it would be contravening the FIA’s new international sporting code law which granted the television rights of all motor sports to ISC. As television revenue at that stage was non-existent – the series was surviving principally on sponsorship money and a modest contribution from Eurosport to help cover the costs of television production costs – Ecc
lestone’s demand presented no financial threat at that stage of its development. But Peter, Ratel and Barth wanted to retain control of television rights to protect the series’ independence, which meant the right at some future date to exploit its television coverage potential. Two meetings followed – in Paris and London – between Ecclestone and the three men but without resolution. Ecclestone refused to brook any other solution: no television rights, no GT series.
Consequently, on 11 November, the FIA announced the creation of its own GT series – the World Grand Touring Car Championship. According to Peter, Ecclestone was willing to allow the BPR Organisation to organise the new series, but he would handle all negotiations with sponsors and circuits while his company, ISC, would handle the television rights. BPR, for its part, would concentrate on its relationship with competitors. Its income would come from competitors’ entry fees and ticket receipts. However, a contract to that effect failed to materialise following disagreement between the two parties on its length of duration: BPR wanted a long-term contract, which the FIA and Ecclestone opposed until the series had first established its potential success, a factor Peter believed had already been proven and which was further confirmed by the FIA’s plan to stage its own GT series.
A month before the FIA announced its intention to launch its own series, the BPR Organisation had verbally agreed a renewal of contract with a sponsor and, in order for it to be validated, Peter requested, with somewhat ludicrous optimism in the circumstances, that the FIA renew its registration of the BPR GT series for the 1997 season. Inevitably, the application was rejected, thereby officially erasing the BPR Organisation’s series from the FIA’s international calendar. Over the next couple of months Peter, Barth and Ratel conferred to consider what was now seen as their only recourse – legal action against Ecclestone. It would, in reality, be never more than a threat in order, as Ratel put it, to ‘optimise our negotiations’. At a meeting in February 1997 it was agreed that the BPR Organisation would engage the services of a Paris-based lawyer, Christian Lamonin. However, it was an offensive that did not for long have Ratel’s support, due, he claimed, to an autonomous decision by Peter to actually proceed with legal action against ISC and the FIA.
At this time, Ratel added, he was in London about to finalise negotiations with Ecclestone on behalf of the BPR Organisation. His response to Peter, in writing, was to refuse to give his support, adding that from that moment he no longer wished to be ‘linked’ to his actions. The decision to go to law, said Ratel, was based on Peter’s conviction that there was a strong case building up against Ecclestone in Brussels. ‘[It] was motivated by a meeting he had in Brussels with some people involved with the [European] Commission … who gave him the assurance that Ecclestone’s position was to be challenged at a very high level, and that he had more to gain by fighting him than working with him.’
Following an approach from Max Mosley, Ratel accepted an offer to organise the FIA’s series. It was, he said, a ‘fantastic opportunity to work in conjunction with the FIA and Bernie Ecclestone, because more than anyone he has proved himself successful in racing’. Ratel, who went on to run his own successful company, the Stéphane Ratel Organisation, with offices in Paris and London, added: ‘It was a unique opportunity to run a World Championship, which I thought would increase our business tenfold. It was Mr Peter’s view that we could succeed without that and we shouldn’t accept any agreement with the FIA.’
A few days later Peter found himself in splendid isolation. For Barth accepted an offer from Mosley to join Ratel. He denied an allegation that he had been pressured by his employers, Porsche, to accept the offer because they did not want to be seen to be connected in any way to the threat of a legal action against Ecclestone. ‘No pressure was put on me at all,’ he said. ‘It was simply a good offer, and one that I decided to accept.’
Max Mosley roundly refuted Peter’s account of events. He blamed the collapse of the BPR series on a partnership dispute between Ratel, Barth and Peter over whether the series should be converted into an FIA championship. Another major factor – although this contradicts the claim of Ratel and others over the difficulties in agreeing a mutually acceptable contract – was ‘a culture clash’ between Peter, who had wanted a contract clearly setting out the terms of agreement between BPR and ISC, and Ecclestone, ‘who has always operated on an informal handshake basis’. It appears therefore the dispute was not over the length of a contract, or a contract at all, but Ecclestone’s willingness to sign one.
Peter acquired total ownership of the BPR Organisation and proceeded, in June 1997, with a legal action against Ecclestone and ISC, claiming damages of nearly £14 million for ‘illegal dismissal of contractual relationships, customer misappropriation and unfair competition’. In November Peter formally lodged a complaint against Formula One Administration, International Sportsworld Communicators and the FIA, alleging a breach of the European Commission’s competition rules, and requested interim measures to prevent Ecclestone, his companies or the FIA from obstructing the running of an international GT series.
According to Ecclestone’s lawyers, there followed a series of rulings issued by the Directorate-General for Competition, which, it is suggested, clearly indicated its willing support of Peter’s complaint. Within days of it being lodged, for example, senior officials made it clear that if the FIA’s World Motor Sport Council did not allow Peter to stage an international series in 1998, then his application for interim measures would ‘become more serious’. And when Formula One Management requested a short extension of time to present its submission to Peter’s complaints, it was told, claim Ecclestone’s lawyers, that it would be conditional upon receiving reassurances that ‘nobody was in a position to obstruct Mr Peter’s plans to organise his series in 1998’, irrespective of safety measures and other factors which might not necessarily comply with the FIA’s rules and regulations.
In January 1998 Peter further alleged to the Commission, quite falsely, according to Ecclestone and his lawyers, that Ecclestone had been responsible for orchestrating a refusal by the Allgemeiner Deutscher Automobil-Club, the organisers of the Nurburgring, and the Royal Automobile Club de Belgique, the organisers of Spa-Francorchamps, to allow his GT series to book their circuits. Due to the apparent desire by senior Commission officials to see Peter satisfied, Ecclestone readily agreed to a meeting with him, which took place over dinner in Gstaad in late January and was also attended by Peter’s wife.
Peter made it clear, claims Ecclestone, that he had influence in the Commission and offered several times to become his representative in resolving the complaints against him, his companies and the FIA – once they had arrived at a financial agreement to compensate him for his alleged losses. That meeting was soon followed by another, this time at the Hôtel Crillon, where, in the presence of Ecclestone’s external lawyers, Peter revealed how much he wanted – a total of $15 million, with $10 million for him and $5 million for Lamonin. Ecclestone refused point blank, and negotiated him down to $2 million. Then Peter suggested, it is alleged, that the money should be paid in a way that concealed it from the French tax authorities. He wanted $1 million as the agreed payment and the other $1 million paid ‘under the table’. When Ecclestone’s lawyers refused to agree, he proposed that $1 million should be paid into a Swiss bank account to the benefit of a company called Larmoran Participation Inc. Again Ecclestone’s lawyers declined to become involved in ‘any dishonest representations to the tax authorities’. On 26 May 1998 the sum of $2 million was paid by International Sportsworld Communicators to Peter’s GTR Organisation.
With that business out of the way, Peter once again boasted of his influence and contacts within the Commission, which he was prepared to put to Ecclestone’s service for a financial consideration. In a letter dated 25 June he stated that, ‘thanks to the experience I gained about the Community practices during the past months together with my knowledge of your file’, he was ‘convinced’ that he could help remove ‘some ob
stacles’ that Ecclestone and the FIA faced with the Commission. As a ‘goodwill officer’, he sought a payment of $2.5 million, plus ‘a monthly allowance’ of $50,000, excluding expenses ‘and taxes’.
The payment, which would also include the services of his lawyer, Lamonin, would be paid to Peter & Associés, his communications and advertising company. It was, he stressed, important that the money was not paid to him or to his GTR Organisation: ‘The more independent I will remain from yourself and the companies of your group, the best chance this mission will have of becoming successful.’ The proposal went no further after Peter failed to respond to a fax dated 16 March 1999 from Ecclestone’s lawyer querying the efficacy of such an arrangement, the apparent conflict of interest that Lamonin’s role would create – he also represented the Association de Défense Internationale du Sport Automobile, which had been highly critical of both Ecclestone and Mosley – and the nature of the payments he was seeking.
Mosley offered to produce documentary evidence that senior staff within the Directorate-General for Competition had ‘repeatedly encouraged’ Ecclestone to make a substantial payment to Peter. It did not, though, materialise. He insisted, nonetheless, that John Temple Lang, a Director of the Directorate-General for Competition, had telephoned Ecclestone to persuade him to settle the grievance with Peter. Ecclestone confirmed the call. ‘I can’t remember whether he called me or I called him, but he said it would be nice if we could sort out the Patrick Peter business.’
Temple Lang claims that he had ‘very few direct contacts’ with Ecclestone, ‘apart from the couple of times when he came to see us. He telephoned me, I believe, once or possibly twice. I am sure I never took the initiative to contact him by letter or phone. My contacts were with his solicitors.’ But did he in any way, directly or otherwise, encourage Ecclestone to reach an accommodation with Peter in order that he might withdraw his complaint? ‘Without consulting my notes, which, of course, are in the Commission, I cannot be certain that I never said anything “directly or otherwise” which might have been on the lines you suggest. But I am sure that I never actively encouraged Mr Ecclestone to reach a settlement or to get Mr Peter to withdraw his complaint.’