First someone blows a whistle, and then a supervisor pushes aside a partition screen for a moment. A Mercedes limousine glides out from behind the screen. A man with a mane of whitish-gray hair, so short that he can hardly see over the dashboard, is sitting in the passenger seat. The car stops. It's a Saturday morning, and Bernie Ecclestone has reached his place of work: the Formula One paddock.
Ecclestone has spent more than half of his life in this racing circus, turning it into a big business in the process. Now, at 80, he still travels with the teams to events in places like China, the Arab world and the United States. Ecclestone is still the man who gets things done, and he is firmly convinced that without him Formula One would descend into chaos.
After getting out of the Mercedes, he steps into a vehicle that looks like a tour bus, with covered wheels and tinted windows. It's Ecclestone's mobile office. He won't leave the bus again before lunch, and why should he? Everyone comes to him. Politicians, businessmen, world champions and team captains wait, like schoolchildren outside the principal's office, until the sliding door opens and a liver-spotted hand waves in the next person.
"Five minutes," says Ecclestone, spreading his fingers. The visitors' section in the middle of the bus consists of two padded benches, not exactly a very comfortable spot. Ecclestone hates wasting time and money. He sits on the edge of one of the benches and shows only a hint of a smile on his face.
Five minutes. The clock is running.
'It Isn't For Sale'
Would it be a good thing if Formula One were sold? "It isn't for sale," Ecclestone says quietly. But there are prospective buyers, aren't there? "It isn't for sale. It's an academic question. Buckingham Palace isn't for sale, either, even though I'd like to have it."
When this man agrees to be asked questions, which happens rarely, he likes to answer them with his own questions, insinuations or statements of sheer optimism. He always says the same thing: Let's just leave Formula One where it's best off -- in my hands.
But nowadays the multibillionaire finds himself fighting more than ever to protect his empire, which is being attacked from two sides.
On the one hand, the racing teams are demanding more money and threatening, once again, to launch their own series. On the other hand, two prospective buyers want to take over the marketing of Formula One: Rupert Murdoch's media conglomerate and Exor, an investment company owned by the Agnelli family.
Motorsport teams like Ferrari, Mercedes-Benz, McLaren and Red Bull invest many millions of euros in the sport every year. They develop the cars and pay drivers, mechanics and support teams. Without them, there wouldn't be a single car behind the starting line. But when it comes to the distribution of the revenues from television rights, advertising, VIP hospitality and the fees each racetrack pays for the privilege of hosting Formula One, most of the money goes elsewhere.
Currently, the teams receive only half of the profits. The rest goes to a company called Delta Topco and to its subsidiaries (see graphic), which handle the organization and marketing of Formula One. The owners of Delta Topco -- financial investor CVC Capital Partners, banks and Ecclestone and his family -- are the real beneficiaries from the global racing circus. The 500 million TV viewers in Japan, China, South America, Europe and the Middle East are almost completely in the dark about the large deals being made, which are often handled using tax havens. The business behind motorsport events is worth billions, and it's one of the biggest secrets around -- until now.
Looking into 'Formula Money'
Christian Sylt, a former Ecclestone employee and Formula One expert for many years, offers insights into these business deals. He has just published the latest edition of the "Formula Money" report, in which he traces the financial transactions associated with Formula One. The upshot of Sylt's extensive research is that, for the companies in the Formula One group, the ratios of revenues, expenditures and profits are about as spectacular as in the drug trade.
According to the study, the financial holding company Delta Topco and its subsidiaries made $1.493 billion (1.06 billion) in revenues last year.
In return, Delta markets the racing series. Its approximately 300 employees negotiate contracts with television networks, racetracks and sponsors. They manage the transport of racecars and equipment to the venues. Using about 30 cameras, they film all events. According to Sylt's calculations, all of this activity generates costs of $325 million.
That leaves $1.168 billion in earnings before taxes and depreciation, making Formula One's profit margin a spectacular 78 percent. (For comparison, carmakers like Daimler usually have profit margins of around 8 percent.) Formula One distributes half of its earnings to the racing teams, while the owners keep the other half.
Ecclestone and CVC were unwilling to confirm Sylt's figures. Duncan Llowarch, Ecclestone's financial expert, told SPIEGEL that the Formula One Group was "not involved" in the preparation of the report and therefore "cannot provide" any information or numbers in this regard.
A Formula One insider says that the numbers in the report are based on estimates and extrapolations -- and that they are not unrealistic.
The money is often funneled through companies headquartered on the Channel island of Jersey, a place of great discretion and low taxes. According to the study, a number of companies in the Formula One empire that are based in England have taken out large loans at 15 percent interest from the subsidiaries in Jersey. As a result, the companies in Jersey post high earnings, which are only subject to the Channel island's low tax rates. In return, profits are reduced for the companies registered in Great Britain, which pay higher taxes.
Ecclestone and CVC were also unwilling to comment on this issue. According to a Formula One insider, the financial setup is legal and has been approved by the British tax authorities.
This may be true. But there can be no doubt anymore that Formula One is something of a license to print money for Ecclestone and the investment company CVC.
It's still unclear what financial investor CVC will end up doing. Its managers have already had an initial meeting with potential buyers Rupert Murdoch and John Elkann, a member of the Agnelli family. If CVC were to sell its 63 percent share of the Formula One marketing company in the near future, the investors would likely collect up to $3.4 billion after all outstanding loans have been paid off. This means that their original investment would have more than doubled within five years.
Ecclestone already cashed in years ago, collecting several billion dollars.
Convinced of His Own Worth
For Ecclestone, money is merely a gauge of whether he has done his job well. And he would be the last person to doubt that this is the case. Without him, Formula One would not exist in its current form. Without him, it would hardly have developed into a billion-dollar business. And the 80-year-old is convinced that without him everything would fall apart again.
Who else could bring together the teams, the racetracks, the sponsors and the TV networks, which all pursue their own, different interests, in such a way as to produce a gigantic sporting event and an equally massive business?
Ecclestone is unwilling to comment on how many billions he has made to date. "I never discuss last night or money," he says.