Economy

Can Formula One Survive Without Bernie Ecclestone?

The 82-year-old "godfather" of F1 has built the motor sport into a billion-dollar business with a very Bernie-centric system. But bribery charges may force the sport to find a new formula.

Not ready to hang it up
Not ready to hang it up
Simon Pausch

MUNICH - Bernie Ecclestone's indictment by a Munich court last week on bribery charges marks a turning point for Formula One. After nearly four decades of tough-guy leadership, the 82-year-old former Ipswich tire dealer is most likely on his way out this year, even if he steadfastly continues to protest his innocence and refuses to step down.

Possibly as early as when the trial begins in September -- but at the very latest if he were to be convicted of paying $44 million in bribes to former Bayern LB bank Chief Risk Officer Gerhard Griboswky -- Ecclestone will become an unsustainable presence in a sector where major companies are faced with strict compliance rules.

"Within Formula One, contracts are not transparent and they are monopolized by Ecclestone. These days no business is organized like that," says Sylvia Schenk, senior advisor for sport at Transparency International (a NGO that monitors corporate and political corruption). And she’s not the only one to hold that opinion.

But the bigger question people are beginning to ask is: How can Formula One continue without Bernie Ecclestone?

Everyone agrees on one thing: Nobody can truly replace him. The diminutive figure (1.58 meters/5ft.3 tall) virtually single-handedly turned Formula One into a global player worth billions. To do that, over decades he built up a complicated structure of subsidiaries and a web of mutual dependencies.

There are subsidiaries in charge of contracts with the race courses, television rights, catering, and yet another that deals with legal ties to the FIA (International Automobile Federation).

Ecclestone even oversaw personally who got pit lane tickets. Over the years, the amounts of money that flowed through subsidiaries reached eight figures. Last year alone, Formula One turned over some 3 billion euros. This success led people to avoid thinking about who would one day take the place of the almighty Ecclestone.

"Maybe I’ll stop when I’m a hundred," Ecclestone liked to say when he was asked about retiring from Formula One. He is a workaholic who even at his age puts in 16-hour days and flies around the globe doing deals. For him, life without Formula One is unimaginable.

That a conviction could dash this plan 18 years before his 100th birthday has until now not been something he could wrap his brain around. Legally, the worst-case scenario could mean a ten-year prison sentence. And even he, the quintessential dealmaker, won’t be able to wangle his way out of prison time if he is sentenced.

When talks turn to potential successors, one of the names that often comes up is Justin King. However King -- who made his reputation in the corporate world as CEO of Sainsbury's supermarket chain – has no particular background in motorsport, even though his son Jordan is a Formula Two driver.

Two other names mentioned have similar corporate backgrounds, without any direct motor world experience. Donald Mackenzie -- boss of CVC Capital Partners investment company that owns a majority stake in Formula One, would on paper at least be a kind of logical successor to Ecclestone; and Nestlé Chairman Peter Brabeck-Letmathe, planned chairman of the Formula One corporation.

Whether the Formula One racing stables, split into numerous and in some cases hostile interest groups, would accept their leadership appears to be more than questionable. Fear of Ecclestone’s not always kosher maneuvers keeps them in line. When Ecclestone goes, Formula One will lose the glue that binds it together. The timing couldn’t be worse. The threat of an untimely power vacuum is very real.

Public quoting

The entity now faces its most important decisions in years. A listing on the stock exchange – a move that will supposedly generate billions -- had been foreseen for this fall. It’s supposed to cement Ecclestone’s legacy and pump fresh funds into the series that has been hit by the effects of the worldwide financial crisis.

The coffers of the small racing stables are empty, which is why in the past they’ve accepted -- without complaint – to race in authoritarian countries like Bahrain and China. A recent rule of thumb at F1 has been: If you show us the money, we’ll race.

However going onto the stock exchange is hardly imaginable if the world-famous F1 boss is sitting in the accused dock in a Munich courtroom.

Not least: a new Concorde Agreement -- the basic document in which the division of income among the teams is set down, along with the terms of the relationship to the FIA -- has yet to be signed. Many teams have been longing for the day when they can play by their own, and not Ecclestone’s, rules. But they still have to deliver proof that they’re capable of that without causing the series to implode.

In October, Bernie Ecclestone will turn 83. His financial overseers at CVC Capital Partners are all too aware of this. According to the British media, CVC hired a headhunter months ago to start looking for a replacement for "Mr. E." -- so far without success.

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Society

Dutch Cities Have Been Secretly Probing Mosques Since 2013

Revelations of a nationally funded clandestine operation within 10 municipalities in the Netherlands to keep tabs on mosques and Muslim organizations after a rise in radicalization eight years ago.

The Nasser mosque in Veenendaal, one of the mosques reportedly surveilled

Meike Eijsberg

At least ten Dutch towns and cities have secretly used a private agency to probe mosques and other local religious organizations, Amsterdam-based daily het NRC reports in an exclusive investigation.

The clandestine operation — funded by NCTV, the National Security Services, the Netherlands' leading counter-terrorism agency — was prompted by the social unrest and uncertainty following multiple terror attacks in 2013, and a rise in Islamic radicalization.


The NCTV, which advises and financially supports municipalities in countering radicalization, put the municipalities in touch with Nuance by Training and Advice (Nuance door Trainingen en Advies, NTA), a private research agency based in Deventer, Netherlands. Among the institutions targeted by the investigations, which came at a cost of circa 500,000 euros, were the Al Mouahidin mosque in the central Dutch town of Ede, and the Nasser mosque east of the city of Utrecht, according to NRC.

Photo of people standing on prayer mats inside a Dutch mosque

Praying inside a Dutch mosque.

Hollandse-Hoogte/ZUMA

Broken trust in Islamic community

Unlike public officials, the private agency can enter the mosques to clandestinely research the situation. In this case, the agents observed activity, talk to visitors, administrators, and religious leaders, and investigated what they do and say on social media.

All findings then wound up in a secret report which includes personal details about what the administrators and teachers studied, who their relatives are, with whom they argued, and how often they had contact with authorities in foreign countries, like Morocco.

Leaders of the Muslim organizations that were secretly probed say they feel betrayed.

It is unclear whether the practice is legal, which is why several members of the Dutch Parliament are now demanding clarification from the outgoing Minister of Justice and Security, Ferd Grapperhaus, who is said to be involved.

"The ease with which the government violates (fundamental) rights when it comes to Islam or Muslims is shocking," Stephan van Baarle, member of the leftist party DENK, told De Volkskrant, another Dutch newspaper.

Leaders of the Muslim organizations that were secretly probed say they feel betrayed. Hassan Saidi, director of one of the mosques investigated, said that the relationship with the local municipality had been good. "This puts a huge dent in the trust I'd had in the municipality," he told the Dutch public broadcaster NOS.

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