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Formula One Chief Executive Bernie Ecclestone arrives at the High Court in central London in this November 6, 2013 file photo. Ecclestone will stand trial on bribery charges in Munich over the sale of a stake in his multi-billion dollar sport, a German court said on January 16, 2014.


This year's first Formula One action begins next week with the opening test of 2014 in Jerez, Spain. But what happens on track may take a back seat to the German trial of Bernie Ecclestone, the sport's ringmaster.

The bribery and incitement to breach of trust charges announced by German authorities last week against the 83-year-old king of the paddock could signal the end of his four-decade rule, leading to either a huge crisis for the sport – or a huge opportunity.

The F1 boss is accused of paying the man in charge of the sale of the 47 per cent stake the sport held by Bayerische Landesbank in 2005 to ensure CVC Partners won the bidding. CVC had said it would keep Ecclestone running the F1 if it took control.

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The banker in question, Gerhard Gribkowsky, was convicted of receiving a bribe from Ecclestone in 2012 and sentenced to eight and a half years. Ecclestone insists the banker blackmailed him .

Ecclestone has already stepped down from the board of the company that runs F1, Delta Topco, and while he will continue to hold the reins, he can no longer approve and sign significant contracts.

With Gribkowsky's sentence for accepting the ill-gotten payment already on the books, it's difficult to see how any argument from Ecclestone's lawyers could find the octogenarian skating away scot-free.

But would a paddock without Ecclestone really turn F 1 into a complete disaster?

Nobody can deny that Ecclestone took a disorganized band of weekend-warrior owners and transformed them into a well-oiled commercial machine. He also made most of them millions, if not billions, of dollars along the way.

But that was then and this is now, and this business model cannot continue. Frankly, F1 sits on the precipice of disaster due to the road it has taken under Ecclestone's leadership.

Ecclestone jealously controls every aspect of the sport, resisting most moves to make it more accessible. Fans rarely even catch a glimpse of a driver at a grand prix, something that doesn't go down well with today's digital generation .

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Want proof of the sport's lack of digital intelligence? Just log on to YouTube. Or Twitter. Or Facebook. Or any other social media site.

NASCAR has 1,841 videos on its YouTube channel while IndyCar has 2,132. Formula One's video contribution is a big fat zero because they don't even have a channel. In fact, upload a clip from an F1 race to YouTube and you're likely to get a note from a lawyer.

Revenue growth for F1 over the past decade has come mostly from the sanctioning fees, not television rights, since Ecclestone makes exclusive deals with one television provider in each country, excluding the rest. In contrast, NASCAR pulls in more cash just in the U.S. through splitting its television rights, selling them to the highest bidders.

The cost of hosting an F1 race under Ecclestone's tenure has priced many countries out of the market and several popular venues continue to struggle to raise the cash needed to stage a grand prix. Meanwhile, the sport headed to deep-pocketed countries in Asia which gladly paid the fees to gain the exposure on the world stage, even if tickets to the events go unsold and many grandstands remain embarrassingly empty for the entire weekend.

Along the way, F1 happily made deals for grands prix with governments that have less than stellar records on human rights, such as Bahrain and China.

The average sanctioning fee to host an F1 race is about $30-million according to F1 business publication Formula Money, although venues like Malaysia, Abu Dhabi and Singapore pay upwards of $73-million . On the other hand, Monaco pays nothing to have F1 make its annual stop on its streets, while the venerable Monza Circuit forks over a paltry $8-million or so.

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Most venues don't get to keep any of the cash raised by the event, except for the gate receipts. A few promoters, including Octane Management that promotes the F1 race at the Circuit Gilles Villeneuve in Montreal, get the revenue from trackside advertising, but they are a minority.

In almost all cases, the races, including the June's Canadian Grand Prix, would not happen without government support because there's really no way for the promoters to make a profit without public funding.

In addition to the burden on promoters, costs to complete in F1 have also skyrocketed. Only four teams on the grid are on solid financial ground, with the seven others struggling race-to-race with small F1 budgets of aroudn $80- to $100-million. The by-product is that two-thirds of the drivers now pay the teams to race their cars, something that diminishes the sport and turns off fans.

Obviously, some of blame for the exponential budgets lies at the feet of the teams, but the travel pressures of today's F1 schedule also add to the substantial bill. Twenty years ago, only five of 16 races were outside Europe; today; it's 12 of 19 grands prix.

Ecclestone first took control of the commercial side of the sport in the late 1970s, after getting the rest of the owners in the paddock to hand him the television rights to F1. He built an impressive empire in the past 40 years that made him one of the richest men in sport.

Although he sold his majority stake in F1 about 20 years ago, Ecclestone remained a constant in the paddock, running the show with a combination of guile, coercion, and ruthlessness.

It's time for the sport to find ways to get the most bang for its buck, to return to its roots of open doors and accessibility, and to discover and exploit the digital world.

Grand Prix racing cannot survive without throwing out Ecclestone's tired business model and starting fresh.

Random Thoughts: While Formula One has been under fire recently for staging races in countries with spotty human rights records, Ecclestone has long held that the sport has no business judging other countries records. Some fans might recall that F1 was one of the last sports to pull out of South Africa during the Apartheid years. At the height of the Anti-Apartheid movement, F1 held its final race in South Africa in October 1985 at the Kyalami Circuit. Unsurprisingly, it proved controversial, with French teams Ligier and Renault refusing to show up. Several drivers also wanted to stay home but honoured their contracts and raced.

By The Numbers: Ecclestone's experiment with pay-TV in the U.K seems to be failing. A seven-year deal prior to the 2012 season put half the F1 races in the U.K. on the pay channel Sky, with the rest available on the public broadcaster BBC through a partnership deal. Although total viewership was up in the U.K during the 2013 season compared to 2012, Sky started 2013 with about 10 per cent fewer viewers per race and the audience declined throughout the year, with the pay broadcaster losing about 30 per cent of viewers by year's end. Interestingly, Sky lost roughly the same percentage of its viewers over the course of the 2012 season. BBC averaged about a six per cent higher audience overall in 2013, although fans did stay away in the second half as Red Bull's Sebastian Vettel ran away with the title and its numbers sagged.

Technically Speaking: Although many know Bernie Ecclestone as the boss of Formula One, he also ran the famed Brabham Team for 17 seasons. Under his leadership, the team took 27 poles and 22 wins as well as the 1983 drivers' title with Brazilian Nelson Piquet at the wheel of a BMW-powered car. Although Ecclestone has been one of the biggest opponents of the new 1.6-litre turbo engines to be used in the 2014 season, his team scored the first-ever drivers' championship in a turbocharged car with Piquet. Ecclestone's teams were also renowned for their creativity, with his Brabham designer Gordon Murray being the first to introduce rudimentary ground effects to F1 in 1974. Murray also designed the Brabham BT46B which featured a fan that sucked the air from under the chassis to create downforce. Niki Lauda drove the car to victory in its only race before it was withdrawn from competition after a huge outcry from the rest of the paddock.

The Last Word: With Bernie Ecclestone embroiled in a court case, the situation will have an effect the ongoing negotiations to keep the Canadian Grand Prix in Montreal past 2014. The race in June is the final one of its existing deal, which means it would be ideal to see a new contract in place before the provisional calendar comes out in September. The 2015 calendar will be finalized and approved by the World Motor Sport Council in December and if a deal is not done by then, June 2015 might see Montreal's Circuit Gilles Villeneuve stay quiet for the third time since 1978.

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