Formula One’s boss Bernie Ecclestone says that Bahrain's Mumtalakat sovereign wealth fund has sold a 50% stake in the McLaren team to its chief executive Ron Dennis.
“[Mumtalakat] are nothing more to do with the race company any more,” said Mr Ecclestone. “They have sold the shares to Ron. He has got to pay for them by a certain date. If he doesn’t pay he will obviously take them back but at the moment Ron would own the company.”
As no shares have changed hands yet it remains to be seen if the transaction will take place. What is certain is McLaren's driver line-up for 2015. After weeks of speculation, the team announced on Thursday that it will race next year with former champions Jenson Button and Fernando Alonso. The announcement was originally expected around 1 December and it was widely rumoured that the delay was due to an attempt by Mr Dennis to raise the finance to buy out Mumtalakat.
Mr Dennis and his business partner, Saudi tycoon Mansour Ojjeh, owned the remaining 50% of McLaren which is one of F1’s most successful teams having won more than 20 championships and 180 races since it was founded in 1963. However, its performance has spluttered in recent years and the team has not won a race since the end of 2012. This year it finished fifth in the standings which is where it also ended up in 2013.
At the start of 2014 Mr Dennis returned to McLaren’s driving seat after a five-year absence. It followed reports that he was distressed by the team’s performance and was plotting to purchase Mr Ojjeh’s shares as well as part of Mumtalakat’s stake. At a media briefing in London on Thursday Mr Ecclestone said that the wealth fund had finally sold its stake and although the price is not known, Forbes estimates that the team is worth $800 million.
A McLaren spokesman confirmed the talks that Mr Ecclestone alluded to and also that no shares have changed hands. “No transaction has taken place, but the shareholders have had discussions on how to best facilitate and enhance the future growth of the McLaren Group.
“When and if a transaction takes place, it is not envisioned that the current shareholders will exit McLaren completely, and announcements would be made at the appropriate time.”
In contrast, Mr Ecclestone says there will be no change to F1 as its controlling shareholder, the private equity firm CVC, is staying put and previous plans for an Initial Public Offering (IPO) are “not on the agenda.” The IPO was due to take place in 2012 but got a red light due to the Eurozone crisis followed by a bribery trial in Germany against Mr Ecclestone.
In August Mr Ecclestone paid a record $100 million settlement to put the brakes on the trial though, as Forbes reported, the judge concluded regardless that “a conviction does not seem probable.” Mr Ecclestone stepped down from the board of F1’s parent company Delta Topco for the trial and revealed on Thursday “I came back on Monday.” He added “I run the company as if it belonged to me.”
On Thursday Forbes printed the first part of the transcript of Mr Ecclestone’s media briefing and the second section is below. It reveals that his next move is to expand F1’s digital presence which has accelerated on Twitter since the Singapore Grand Prix in September.
“Our impressions were over 80 million from Singapore until the end of the season. Impressions is anybody who has seen the @F1 content that we pushed out,” says Marissa Pace from F1’s digital media department. Plans are underway for an F1 Facebook page though Mr Ecclestone says that the series will never upload race footage to YouTube as it could cannibalise its television rights deals.
One deal which could go either way is the plan for a Grand Prix in Qatar which was revealed last month in Britain’s Independent newspaper. Mr Ecclestone confirmed that talks have indeed taken place but added that the existing races in Abu Dhabi and Bahrain can veto its addition to the F1 calendar. “I put the people together and said ‘can you sort this out between you?’ They haven’t managed to do it.”
The following transcript is slightly abridged for clarity
Bernie Ecclestone briefing PART TWO
The season as a whole, what was good about it and what was not so good?
Bernie Ecclestone: I think the real good thing about the season was Mercedes allowing their two drivers to race each other. The racing was good wasn’t it?
What was not so good?
I think the gap between the winners and the losers.
What about crowds and TV support?
At the beginning they were a bit weaker but as the season went on they seemed to come back again so I hope that’s what will continue.
At the end of the season I think you said you thought there could be ten teams next year. Do you still think that or is that unlikely now?
It’s unlikely. Honestly I don’t know. When people don’t start paying salaries and those sort of things you have got to think.
You said that Formula One could have been a lousy season this year.
Two things, had Mercedes not been alright it would have been a good season because the rest of the racing down the grid was very good. If one of the guys broke his leg skiing or something it would have been a lousy season because the other one would have won earlier.
Does that make it one of the worst seasons in recent years?
No.
There have been worse?
I don’t want to think about it. I was hoping that you guys would tell me what you think of the season.
It’s difficult because if you go out there and ask people what the most iconic season they remember they say 88 when McLaren swept up all but one race and now they look back at that as a golden age of Formula One so maybe 2014 will be the same.
I tell you what, if you had asked me as the season progressed that year, I would have said exactly the same because people were wondering are they going to win the next race. It’s a bit like with Schuey, was he going to?
You have admit that double points at the end did give you that sense that anything could happen.
I’m surprised that you guys didn’t write up earlier what could have happened. There was always this, ‘he has got to win and he has got to be second’ and at the last race he would have won if he hadn’t won the race.
But it was a tightrope because if Lewis had blown up and Rosberg had finished fifth and won the title it could have been disastrous for the sport because the guy wins ten races and the other guy wins five and is champion. So it was a risky strategy wasn’t it?
It was. As I said, we got lucky. Do you guys remember when we used to have two different types of engines in races? The turbos and normally aspirated ones in the 80s. Continuing what I was talking about earlier, what I proposed was that we have an engine, a normally aspirated engine, that we will develop to around the same sort of power as the current one maybe a bit more, and the other teams get together and get someone to build the rest of the car basically like GP2. Super GP2 if you want to say that. So they buy the chassis, put this engine in and off they go. Obviously we could refine that idea but the people that objected most to that were the people that are in trouble financially and say ‘we are constructors’. The incredible thing is that the people that said we want more money are the people that don’t seem to want to support.
They wouldn’t need more money if the engine was cheap.
They would probably still want more money.
There has been a lot of talk of a race in Qatar. Can the Middle East support three races?
Financially it could. I have talked about a race in Qatar but I have got a bit of problem which nobody knows about really but I’m sure they soon will. When I went to Bahrain I didn’t even know where Bahrain was and all the people in Bahrain didn’t even know what Formula One was because it was considered a very elitist sport and people are now seeing that it isn’t. I made a deal with the people in Bahrain and they said ‘since we are going to be something new in this area, which we are, give us a guarantee that we will not put another race on in the Gulf.’ I said ‘yes’. Typical Ecclestone handshake deal with the Crown Prince. Then we wanted a race in Abu Dhabi and I explained to them the position I was in and said ‘you had better ask the people in Bahrain. If they are happy, I’m happy. If not we wouldn’t.’ So they got together and that’s what happened. Then this other race has been proposed and I put the people together and said ‘can you sort this out between you?’ They haven’t managed to do it.
They are not the best of friends I don’t think, the Bahrainis and the Qataris.
We’re not interested in religion or politics, you know that.
So Bahrain has a veto over whether Doha can have a race?
Yes. Bahrain and Abu Dhabi. We never discussed the length. Didn’t discuss it. Never written down. No contract.
So as long as Bahrain has a race they have a right to veto?
Yes.
Has it been a pretty lousy year for you as well personally?
I would say it has been a bit difficult. Certain stages of the year have not been so easy.
Would you say you have been a bit distracted for a year or so because you have been dragged off to the lawyers or to court?
I have been able to keep my focus. There’s this wonderful thing called the telephone. I had lunch breaks in the court and left there at 4.30 or something. I don’t want to do it every year though.
I should imagine the job helped you in a lot of respects because it took your mind away from things.
It’s not easy to take your mind away when somebody tells you that you might get ten years.
Is there anyone from within Formula One you might bring on to be the new Bernie, the next man running the sport?
I honestly believe that all that’s a little bit of a nonsense because I think what is actually going to happen is if I dies now,there’s enough people in the company that could continue running the company the way we have set things up. Would they want a front guy, particularly if they try for an IPO? The City would want to see someone that’s a face and then the right person would come up. Maybe this Mr Walsh, being the chairman, would be the right person.
Did the board not anoint Mr Walsh because you said I’ve got to see him before you get him on-board?
They just didn’t discuss it.
Wouldn’t the chairman be the one leading the group finding a replacement so he would have to exclude himself?
With Donald [Mackenzie, CVC Capital Managing Partner] being the major shareholder I suppose in the end he is probably in a position to get rid of the chairman if he wanted to. So, if the chairman said ‘we need this guy’ and it didn’t suit Donald I’m sure he would say you had better go away with him because I want somebody else. So in the end it would be Donald assisted by the board. I don’t think Donald would take any decision the board didn’t approve of.
Do you think CVC will stay?
Yes. They still control the company. They keep talking about a public offering. I think it would have gone through before but at that time all the markets were a bit strange. It’s not on the agenda.
Are Sacha [Woodward-Hill, F1’s legal director] and Duncan [Llowarch, F1’s chief financial officer] capable of running the business in your absence?
They would be able to easily follow through what we have put in place.
Could Sacha be anointed as a successor?
I feel perhaps, if I was controlling the board, like Donald does, if I had all the votes, I would probably say it would not be a bad idea to have a woman as chief executive. I don’t know what a chairman does actually. Peter knew what was going on and controlled the board. I used to talk to Peter. Peter would give me a call and say ‘I have heard something’ and I would straighten it out. I mean, he didn’t effectively run the company. Sacha has been put in a different position now. She is chairman of these different ethics committees and things. She is still chief legal officer as well. She is doing more but not needing to be as close.
Do you think Donald would fancy a go at doing your job?
No. They buy and sell companies. Donald is on the board of a lot of companies but it is a different thing. I think the problem here is that this company is a bit unique to the other companies they bought.
That’s why it requires that hands on direct approach?
Yes. I run the company as if it belonged to me.
Other than Mr Walsh coming in as chairman, are there any other changes you foresee coming in before the start of the season?
I’m going to look for someone who can chase around looking for some sponsors because that is really quite a big job and there are so many people doing the same thing. They have got six or seven people working there.
Don’t see Flavio [Briatore] doing that do you?
Actually, Flavio would be a good guy to do it but firstly he wouldn’t want to do it.
Do you think it would be somebody inside F1 or outside?
I don’t know. I have no idea. I suppose, if it was the sort of thing you thought you could do, for example, it’s a case of really knowing people so that you know somebody who knows somebody who happens to be the person that handles sponsorship in a company so the more people you have got, the more chance you have got of finding the right people.
What about broadcasting rights? Do you need someone else?
No, that’s what I do and I’m successful.
When it comes to the sponsors are you happy to retain or would you be happy for big players like Coca-Cola or McDonald’s to come in?
Delighted. We do have a number of companies who say they would like to be involved with us and perhaps it’s not the sort of people who we would want.
Is there anyone else you would like to bring in?
I think we are covered pretty well.
What about social media? You could have a separate entity dealing with that.
We have actually. We have got about eight people to do whatever eight people do. We have a lot of meetings. I was surprised at the number of people that use our app. Seems it’s quite successful. I don’t know for what. What does social media do? It doesn’t make any money for a start. We need to keep our TV audience up and we need to help the promoters sell more tickets. That’s basically what we ought to do. I don’t know whether social media actually does that.
Why have you got eight people if you don’t know what the purpose of social media is?
Because they tell me that we need eight people for social media. People in here tell me that we need social media because it is good for us. It’s better than Aspirin. Since people have been breaking my balls about social media I have been looking at this Twitter thing and I can’t see anything on there except [Mercedes motorsport boss] Toto Wolff and one of my daughters and I thought people put things on there, how does that help Formula One?
Are you surprised by the negative reaction to people in this country to Lewis [Hamilton] living in Monaco?
I suppose any of us could go and live in Monaco. I wouldn’t go and live there if they paid me.
Marissa Pace (Formula One Management Digital Media Manager): We are rebuilding Formula1.com and from Singapore onwards you may have noticed we have taken a more active role in social media so, starting with Twitter, we started in Singapore carrying on through to Youtube in the future and eventually Facebook when we get it past the legal team. Our impressions were over 80 million from Singapore until the end of the season. Impressions is anybody who has seen the @F1 content that we pushed out. On Twitter specifically we are putting out live data graphics, so anything from lap charts, live timing. We are increasing our visibility so we are starting from the grass roots and growing up. It ties in with what we are doing with the new website. The new website will have a membership area and it will all tie in together.
Do you have a strategy to turn that into people attending races?
Marissa Pace: That ties in again with the website so the app as well. We are trying to make the experience at the race much more interactive or complete so the app has live commentary. BBC Five Live is currently on the app so while you are in the grandstands you can listen to that or you can listen to the TV commentators. You get all the data and race information. My background is that I used to work for a company called Kangaroo TV which is a fan experience bringing people closer which is what Mr Ecclestone asked me to do for the fans with the website and the app.
How many of the people working on social media are policing it?
Marissa Pace: It’s a completely different group of people that do that. We are obviously in close contact. That is our legal team. We know what we can and cannot do.
Will Youtube have clips from races?
Bernie Ecclestone: No.
What will be on Youtube then?
Marissa Pace: What we currently have on the app in terms of video content is the behind the scenes stuff so the interviews in the drivers’ pen, that kind of extra content. We look at this as on track as at track. The content will be at track.
Bernie Ecclestone: What we should do is you guys when you interview somebody we should really film that and put it up on Youtube because that’s something that doesn’t hurt anybody and it’s good and interesting because it’s instant,
Are you going to give her more than eight people to expand this?
Bernie Ecclestone: We will have to see what we can come up with. We obviously need educating but you are doing the job.
Marissa Pace: One more thing in our roadmap that is worth mentioning is, especially for the TV audience, is that via social media obviously, and via our website, you can geo-target people so you know where they are coming from and therefore you can show them a clip of something and then push them towards something. If they watched a clip and they are in Germany you can tell them ‘In Germany the race is on RTL at 4pm’ so we intend on doing that next year. It is all about promoting the TV. Our intention is not to move viewers away from the TV, it is definitely to keep viewers on the TV but to supplement that experience and make it more exciting and getting people in the grandstands.
Bernie Ecclestone: And maybe this will help the young kids make some money so that they can buy Rolexes.
Do you argue with Donald about social media and it’s importance to F1?
Not really. He is not sure. He thinks it is one of those things everyone says we should have. If it works, the whole point about this I believe, is to encourage people to watch television. I’m not sure, and I have always thought ‘does it actually do that’ and I don’t know. So probably in a year’s time I shall be looking for figures to see what has happened. The only trouble about that is that if there are more people watching television is it because of this or because there are more people watching television? When we made an agreement with the teams and we wanted to make sure they wanted two independent directors on the board so we said ‘OK’ and we wanted to make sure that these people weren’t in conflict. They said ‘we don’t want somebody from another car company’ for example, and things like that. So we made sure they don’t have the right to appoint anybody but they have the right to say ‘I don’t think that guy is the right guy’ and we go back to them and we say ‘we think he is and he has been appointed to the board’ but they don’t have like a veto. No one can fire me except the board.
Are you on the board?
I’m on the board. I came back on Monday. It doesn’t make any difference to what I do. My ex used to say I will die in the motorhome at the circuit. You could do it nicely now. You couldn’t hear any noise. Would have been nicer to see Sebastian and Alonso challenging a little bit. I think that’s what we missed.
Do you think Sebastian isn’t all we thought he was?
I think Sebastian just gave up a little bit. I think he was ready to go. I think the same with Fernando. I think he should have gone a year earlier. Didn’t help when Ricciardo won that first race. Don’t know what Vettel is going to do at Ferrari. Obviously if they could do something with the bloody engine they would be competitive again. Wasn’t just the engine.
What about Fernando at McLaren? Is that a recipe for fireworks?
I think Ron has mellowed quite a lot.
Do you think the Bahrianis are happy with Ron?
They are nothing more to do with the race team any more. They have sold the shares to Ron. He has got to pay for them by a certain date. If he doesn’t pay he will obviously take them back but at the moment Ron would own the company.
And his [business partner] Mansour presumably?
I don’t think so.
Just Ron? That’s a bit of a risk for him to take the whole team back on in the state it is in.
They have got Honda now. Jenson [Button] is going to be there which is good isn’t it? He is the right guy. He is well known and he gets the job done.
Going back to social media, you need saleable items and Lewis, Jenson and Fernando are three of the names you can sell around the world.
Probably Jenson in front of all other ones.
Somebody asked me about whether Mercedes favoured [Nico] Rosberg for the title and my answer was that ‘if you were putting a Mercedes billboard up in Los Angeles which driver would you choose, Nico or Lewis?’
Absolutely. In my opinion he was the right guy. If we had to choose the world champion sat around here we would probably have chosen him.
Who would you choose for next year?
Him. I think he will win the championship and I think he is a good face, if that’s the right word, for Formula One. I’m thinking of doing a Formula One presentation at the end of the season ourselves.
It would be a good idea. The other thing I have always thought is that it is wrong that the World Champion doesn’t get his trophy on the day he wins it.
I discussed this with Max [Mosley, former president of F1’s governing body] some time ago, and I said imagine we have said you have won and then he is disqualified. Then what happens? It would probably have been nicer to congratulate Lewis in Abu Dhabi.
