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Bernie restructures

BERNIE ECCLESTONE has spent the last few months quietly restructuring his group of Grand Prix-racing related companies in what appears to be preparation for the rumored flotation of the entire business on the London and New York stock exchanges.

Ecclestone has cleverly constructed his empire in the course of the last 19 years, beginning when he became chief executive of the Formula One Constructors' Association, which at the time was not much more than a travel agency, which enabled the teams to keep down the costs of shipping their cars around the world. Ecclestone unified the teams and began demanding money from organizers for the teams to appear. These charges grew dramatically in the 1980s and Ecclestone began to take on the role of promoting events himself.

The other teams were not willing to take the risks and so Ecclestone began to act on behalf of the teams but as an independent operator.

It was a similar story with television rights. With a united group of teams behind him Ecclestone won the right from the FIA to market F1 to TV companies. This was highly successful and in March 1987 Ecclestone was appointed Vice-President (Promotional Affairs) of the FIA. As the TV deals grew bigger and bigger the teams were unwilling to take the risks and so Ecclestone gradually won control of the TV rights as well through his Formula 1 Promotions and Administration company.

In the early 1990s this was revealed to be Britain's most profitable company with an 80% profit ratio on a turnover of $30m. Soon afterwards Ecclestone became the highest wage owner in British history with a salary in 1993 of $45m, a figure he matched the following year.

In 1994 he invested around $40m in a multi-channel digital television system, designed for pay-per-view satellite channels.

The structure of Ecclestone's companies has now been completely streamlined with Formula One Promotions and Administration disappearing and a new company called Formula One Holdings Ltd. - which is wholly-owned by Ecclestone - becoming the parent body of a series of businesses looking after different aspects of the sport.

This controls the new companies: Formula One Administration Ltd., Formula One Communications, Formula One World Travel and others.

Formula One Holdings Ltd. is expected to be the company which will eventually be floated, with Ecclestone tipped to make an estimated profit of $4 billion.

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