Bernie Ecclestone

by Terry Lovell

  As events in the Place de la Concorde in Paris and the High Court in London demonstrated, Mosley is not one to back down from a fight when under attack – and there are few indeed within the F1 industry with the stomach or cunning to plot his early departure.

  Notes

  1. Sunday Business News Review, 16 March 1997.

  2. Daily Telegraph, 13 December 2008.

  3. Daily Mail, 12 March 2009.

  4. Daily Telegraph, 13 March 2009.

  5. Sunday Telegraph, 24 June 2001.

  6. Daily Telegraph, 1997.

  19

  WHAT A FUNNY OLD GAME

  Although Ecclestone will be celebrating his 78th birthday this year, there will be no slow-down for a man, who, at the age of 69, permitted himself no more than two weeks’ recuperation after undergoing triple-bypass heart surgery. His arduous daily schedule has diminished little over the years, and while he might find time to blow out a candle, it will be business as usual, with deals to cut, adversaries to outwit and profits to rack up.

  In recent years he has given serious attention to the potential returns of investing a bob or two in a sport which certainly matches Formula One in the departments of ego, greed and ruthlessness – the inaptly named ‘beautiful game’ of football. While Ecclestone might have difficulty in explaining the difference between the off-side rule and an inside leg, his nascent nose for soccer’s lucre picked up the fragrance at least a decade ago, when Roman Abramovich, quick off the mark in the post-Gorbachev free-market reforms of the late eighties, was still wheeling and dealing to accumulate his oil-based billions.

  In February 1998 Ecclestone met the principal executives of Milan-based Media Partners – its key figures had worked for Silvio Berlusconi’s Italian television conglomerate Mediaset – who were attempting to set up a breakaway European Super League of clubs such as Manchester United, Arsenal, Juventus, Barcelona, Real Madrid, Bayern Munich, Inter Milan and AC Milan. Ecclestone, with his expertise in sports marketing, television rights, pay-for-view broadcasting and, not least, his contacts book, was seen as the obvious choice to handle the broadcasting and distribution to pay-per-view subscribers. His talks with Media Partners went on for several weeks, but finally came to nothing when, eight months later, the Union of European Football Associations (UEFA), football’s governing body in Europe, came up with an improved financial offer to Europe’s top soccer clubs. ‘The opportunity will come again, when the teams once again begin to look for more money, and Bernie will become involved,’ said a Media Partners associate. ‘If there is money to be made, Bernie will always want to be involved.’

  Ten years later, in February 2008, Ecclestone was still keen to cash in on the money-spinning concept of an international super league, but this time consisting of the top four English clubs – Manchester United, Arsenal, Chelsea and Liverpool – who would play a six-match series in countries of his choice and with whom he would set up exclusive broadcasting and marketing deals. It was his reply to a proposal announced by Premier League chief executive Richard Scudamore for an ‘international’ round of up to ten competitive matches by the 20 Premier clubs, with the host cities bidding to stage the matches. But Ecclestone was critical of the proposal, arguing that few countries would be interested in bidding for matches featuring the lesser-known teams.

  Ecclestone was linked to a club takeover back in September 1998, when the Manchester United board was fighting off a £623-million bid by Rupert Murdoch’s BSkyB. Ecclestone’s name was thrown into the media mixing machine and linked to a £700-million bid by an anonymous group. For very good reasons he emphatically denied any interest in the anonymous group, whose alleged bid made no more than headlines after United refused to supply information to an American bank said to be acting for the group.

  To take on Murdoch was certainly something that Ecclestone had no desire to do. Earlier that year, in March, on the eve of the Melbourne Grand Prix, he had signed a deal with Murdoch’s American television company, Fox Sports Net, to replace ESPN as the official Formula One channel in the USA. It was speculated at the time to be part of an agreement with Murdoch that would see BSkyB, which went digital in Britain in October 1998, broadcast coverage of Formula One on one of its sports channels.

  About that time, Ecclestone was also having exploratory talks with Murdoch to launch a dedicated Formula One lifestyle channel to include interviews with top drivers and their families in the surroundings of their luxury homes, as well as behind-the-scenes coverage of the teams. The last thing he wanted was a head-to-head confrontation with Murdoch in pursuit of Manchester United.

  Nine years later, in 2007, Ecclestone appeared to be interested in Arsenal following a boardroom bust-up between his friend David Dein, the vice-chairman chairman of the club, and directors over Dein’s support for a possible takeover bid by US billionaire real-estate developer Stan Kroenke, who already owned 12.2 per cent of the Gunners. Dein resigned on 18 April 2007 with immediate effect, owing to ‘irreconcilable differences’ with other members of the board. Ecclestone had got to know Dein through his 30-year-old son, Gavin, who at the time was engaged to Ecclestone’s eldest daughter, Tamara, 22, a budding TV presenter and former model, but their relationship came to an end in November 2007. He believed that Dein had been badly treated. ‘I obviously talked to David when they chucked him out, which I thought was a bit unnecessary.’

  Less than three months after Dein’s departure, Ecclestone appeared to express an interest in Arsenal. But one wonders how seriously. He was quoted as saying: ‘If somebody offers me something I think is good value, I will have a go. I’m interested in anything if it’s cheap enough,’ he said. But it was a meaningless, if not slightly mischievous comment to perhaps wind up the Arsenal board. If he had been serious in putting in a bid, he has more than enough savvy to ensure that the media were the last to hear about it until it suited his purpose. More likely, it was a casual, throwaway reply to a reporter looking for a story. Also, by then members of the board had signed a contractual agreement stating they would not sell their shares for a year, which Ecclestone would certainly have been aware of.

  But the realisation of his ambition to become financially involved with a football club wasn’t far off. But not at the glamorous level to which he aspired. The team was lowly Queens Park Rangers, which for several years had been lurching from one financial crisis to another, and was now in serious danger of relegation from the Coca-Cola Championship. The only major trophy to grace the club’s silverware cabinet was the Football League Cup, which captain Mike Keen had held aloft 40 years earlier at Wembley Stadium – the first time the Football League cup final was played there – when QPR, then in the old Division Three, came back from being 2-0 down to beat West Bromwich Albion 3-2.

  The 126-year-old club, based at Loftus Road in west London, has certainly had its episodes of glory under managers such as Alec Stock, Dave Sexton and Terry Venables, and with players such as Rodney Marsh, Phil Parkes, Don Givens, Dave Thomas, Stan Bowles and Gerry Francis. But in more recent years QPR has lived in the shadows of success cast by its west London rivals, Fulham. Four years after being bought by the multi-millionaire owner of Harrods, Mohamed Al Fayed, Fulham gained promotion to the Premier League in 2001, though in 2008 it only narrowly escaped relegation. But if there were trophies for boardroom bungling, QPR’s silverware cabinet would have required reinforcing in recent years to support the weight.

  The future beckoned promisingly for QPR at the start of the 1992–3 season. One of 22 elite clubs that broke away from the Football League’s First Division to form the Premier League after BSkyB outbid the BBC and ITV with a £305-million, five-year contract for the live and exclusive football broadcasting rights, it was in line to enjoy a share of those lucrative rights.

  Under Gerry Francis, a key player in the QPR side of the 1970s, and who returned to the club as manager in 1991, the team ended the 1992–3 season in fifth position, outperforming every other London club. The highlight of QPR’s stun
ning season was a televised 4-1 win over Manchester United at Old Trafford on New Year’s Day, with Dennis Bailey notching up a hat-trick. Francis guided QPR to ninth position the following season before departing to Tottenham Hotspur midway through the 1995–6 season. He was succeeded by another former QPR player, Ray Wilkins, who had left Loftus Road for Crystal Palace but returned as player-manager a few months later to lead QPR to end the season in eighth place.

  However, the departure of top goal-scorer Les Ferdinand – he chalked up 90 goals in 183 games during his QPR career – for Newcastle United in July 1995 for £6 million marked the beginning of a rapid downward spiral. This saw QPR relegated at the end of the 1995–6 season to the Championship’s Division One; Wilkins’s resignation at the start of the next season; and the humiliation of the club’s relegation to the Second Division in 2000–1 – its worst League position for more than thirty years – following the disastrous return in 1998 of Gerry Francis, who left QPR, this time for good, in 2001.

  But whatever the calamities on the pitch, they were matched in spades in the boardroom under the chairmanship of media tycoon Chris Wright, a self-proclaimed hippy turned businessman, who, after leaving university, co-founded Chrysalis Records in 1969. During the 1980s the label was at the forefront of the British New Romantic movement, with bands such as Ultravox and Spandau Ballet. It also represented arena-fillers such as Billy Idol, Pat Benatar, Blondie and Huey Lewis and the News.

  Wright, then a QPR season ticket-holder and a fan for more than 20 years, first heard in the summer of 1996 that the club was up for sale through its chairman at that time, Clive Berlin, a former player’s agent. Berlin approached Wright at the suggestion of Nick Blackburn, who was sales and managing director of Ticketmaster, a London-based worldwide ticketing company.

  Blackburn had gone to see Berlin about a ticketing proposal for QPR, and when Berlin told him that the owners, the David Thompson family, which had food group and horse-racing interests, were looking for a buyer, Blackburn suggested he should contact Wright. Blackburn and Wright knew each other well. A chartered accountant, Blackburn had been employed by Wright as financial controller of the Chrysalis Group, departing in 1972 to run Decca’s A&R department. The two remained in touch.

  Wright received Berlin’s approach positively. Apart from his long-standing allegiance to QPR, he would have been encouraged to learn that the club’s balance sheet for that year showed a profit of £1.7 million as a result of the sale of Ferdinand. But, thanks to his renowned hands-off style, it would be the nearest he would get to seeing QPR in the black. Negotiations with Richard, David Thompson’s son, who had been chairman since 1988, continued through the summer, with the deal on and off several times. It was finally concluded just two days before the start of 1996–7 season, with Wright inviting Blackburn to become a club director. ‘You know a lot about football,’ he said. ‘Why don’t you join the board?’

  Aided by a £4-million loan from Barclays Bank, Wright paid £13 million for QPR. He also bought, in a separate deal, Wasps Rugby Club, for which the trustees were given £3.5 million worth of shares in a new holding company, Loftus Road plc, which had been set up for a Stock Exchange flotation. At a time when clubs – and a new breed of investor – were being dazzled by the millions being poured into the Premier League for the television rights, it was a move that raised £12 million capital. Blackburn had suggested to Wright the idea of Wasps playing at Loftus Road. Wright, backed by his advisers, agreed it would make the flotation more attractive to investors.

  The club now flush with cash, £8,000 per month was paid to Wright, who became a part-time non-executive director, while Berlin was rewarded with a £100,000 salary, plus bonuses, benefits and car. A payment of £100,000 in ‘success fees’ was also made to Harbottle and Lewis, a London-based law firm specialising in media and entertainment, for the role one of its partners, Charles Levison, and also a director of the club, played in the acquisition and flotation. Berlin, who on Wright’s arrival stood down from the chairmanship to become chief executive, began to spend with imprudent ease. QPR’s longstanding and successful strategy of buying cheap and selling at a profit ended up looking like one of buying expensive and selling at a loss.

  Two illuminating examples were strikers John Spencer and Mike Sheron. Spencer, who was bought from Chelsea for £2.5 million in November 1996 on an annual salary of £400,000, was transferred to Everton two seasons later for £1.5 million. QPR paid Stoke £2.75 million for Sheron, who enjoyed an annual salary of £450,000 until he was sold 18 months later to Barnsley for £1.5 million. A more prudent transfer was midfielder Gavin Peacock, who was acquired from Chelsea for just under £1 million, although on an annual salary of £350,000 until his retirement in 2002.

  The players’ wages bill was a major drain on QPR’s finances, and most of them were on five-year deals. It didn’t stop there: 15 youth team players were also on full-time salaries, some paid as much as £50–60,000 a year. Four were paid over £100,000 a year and put on long-term contracts. They were selected by Berlin and youth team manager Chris Geiler as the young players most likely to make the first team. Concerned about the 1995 Bosman ruling on the transfer of players, Wright and his board wanted them on long-term contracts to avoid the risk of losing them on free transfers. But not one of them turned out to be good enough for the first team. QPR ended up with 61 full-time professional players and a wage bill a third higher than the club’s income.

  During these balmy days certain directors’ pay rocketed. Whereas on Wright’s arrival the highest-paid director had received a mere £4,932, in 1997 ten directors, including Wright, were paid a total of £490,000. Even when there must have been cause for concern the following year over the club’s increasing running costs, 11 directors were paid a total of £373,000, and nine were paid a total of £512,000 in 1999. And this was at a time when the club was also being hit hard by the end of ‘parachute’ money paid to ex-Premier League clubs for two seasons to ease the loss of TV revenue. The one person QPR couldn’t put on the transfer list was Berlin himself. He had been given a long-term contract as chairman by Richard Thompson shortly before his departure, which effectively gave him total control. He kept Wright informed of important management decisions by popping round to his nearby office.

  There was within the club, said Blackburn, a lack of professionalism in some areas, ‘a casual, sloppy nature’. Citing the disappointment of relegation as a possible cause, there was, he added, ‘an endemic culture within the club that wasn’t very healthy.’ By the beginning of 2001 QPR, mostly under the guidance of Berlin, who after his departure in 1998 ended up once again as an agent, had managed to accrue debts totalling nearly £27 million, although some of it was down to Wasps, who were losing £1 million a year.

  It was only the sale of the rugby club’s former training ground in Sudbury, Middlesex, in 1999 to McAlpine Homes for £11 million that provided the money to keep QPR afloat until the end of the year 2000. The sale of the ground for residential development – it comprised six acres in a prime residential area, and had been the rugby club’s home since 1923 – sparked a High Court case which led to its former owners, the trustees of the amateur Wasps Football Club, being awarded £2.4 million damages against property consultants Lambert Smith Hampton for advising the trustees that the ground would never get planning permission.

  By late 2000 Wright had invested in loans and gifts a total of £20 million in QPR, which was now bleeding money at a rate of £570,000 per month, and which he was personally funding. Outside of the boardroom, he was also facing financial pressure after a £10-million divorce settlement with his wife, Chelle, in January 2002, which hit his cash liquidity. His love affair with QPR was also fast heading for the rocks.

  He was now paying the price for a management style that was seriously threatening the club’s existence. As a public company, its overdue accounts revealed it to be technically insolvent, a fact that the Stock Exchange had to be made aware of. By November 2000 the advice o
f the accountants was for Loftus Road plc to go into administration, a strategy to keep the creditors from the door and give time for the administrators to find a buyer. Initially Wright was reluctant to agree. ‘I didn’t want it to go into administration,’ he said, ‘but there were people on the board who had careers in the city to consider and they were very concerned that everything … had to be absolutely whiter than white. I had to respect the fact that what these other chaps were saying was accurate and that things had to be done correctly and we had to call in the administrators.’

  On the terraces, Wright was facing a revolt by the fans who four short years earlier had lauded his arrival. He was booed and jeered when Second Division Colchester United hammered QPR 4-1 at Loftus Road in the first round of the Worthington Cup in September 2000. But it turned violent when the side lost 2-0 at home to Fulham in a midweek match the following January. After QPR had notched up just four wins in 28 League games – and received a 6-0 FA Cup mauling by Arsenal the previous week – angry fans tried to storm the directors’ box. Wright was stunned by the level of verbal and physical violence and decided it was time to resign. ‘Why would I want to stay after that?’ he said. ‘It’s one thing to be pumping your own money into the club with the supporters behind you, but it’s something else when you’re doing that and they’re trying to lynch you.’ Two months later, after announcing the club was going into administration, he resigned as chairman.

  Blackburn, formerly Wright’s deputy chairman, and who became acting chairman immediately after the Fulham fracas, claims that the media group boss was not ‘the right person’ for the job. ‘Chris didn’t like to fail,’ he elaborated, ‘and was frustrated that he couldn’t find answers to bring success to the club. He’s also very sensitive to criticism, and a worrier. The lack of success at the club was really getting to him. He’s used to winning. But you can’t win every football match. You’ve got to deal with it. You’ve got to plan. And I think it’s just not in his nature to be like that.’