Ecclestone races home with pounds 54m

Details of the secretive Formula One supremo's pay packet emerge ahead of pounds 1.5bn float
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The Independent Online
Grand Prix promoter Bernie Ecclestone paid himself an astonishing pounds 54m in the last full financial year before the planned pounds 1.5bn-plus flotation of Formula One Holdings.

Mr Ecclestone's pay is set out in the accounts for the year to 31 March 1996 for Formula One Promotions and Administration, Ecclestone's main company until a recent corporate reorganisation ahead of the float.

The accounts are not yet available at Companies House, but Ecclestone's payment was confirmed by David Wilson, the former Ladbroke senior financial executive who joined Ecclestone a few months ago as finance director of the new Formula One group.

Mr Ecclestone's salary was twice the pounds 27m or so he took out of the business in each of the previous three years. In the four years up to March 1996 Mr Ecclestone paid himself pounds 140m.

The new company is set to go public around the time of the British Grand Prix at Silverstone on 13 July. The flotation will make the Ecclestone family worth between pounds 750m and pounds 1bn, putting it well up the list of the UK's wealthiest families - assuming the float goes ahead and investors can be persuaded to buy the shares.

Formula One Holdings has grown astonishingly on a high-octane diet of television deals, notably with ITV which is paying many times the amount Mr Ecclestone used to receive from the BBC. Mr Ecclestone also has pay- TV deals across Europe with media giants such as Germany's Kirch, Canal Plus in France and Telepiu in Italy.

Revenue this year is forecast to rise to over pounds 200m, on which pre-tax profit is likely to be around pounds 85m. The revenue figure is more than double the amount last year before the new TV deals were signed.

Recent reports suggest the Kirch pay-TV deal is failing to live up to Mr Ecclestone's hopes. "It's had some teething problems with the timing of the take-up, but there isn't anybody who thinks pay-TV won't happen," said Mr Wilson.

In the short term the Kirch deal has little affect on Mr Ecclestone. According to Mr Wilson, Formula One receives a minimum annual payment plus further sums when revenue gets above a certain figure. "It won't be an issue for 1997 and 1998 as nobody expects to get past the minimum for a few years yet."

Mr Ecclestone employs a team of 200 to run a company-owned film unit which broadcasts six tracks of digital signals for pay-per-view TV. "It takes two and half jumbo jets or 30 articulated lorries to move the team and the equipment," said Mr Wilson.

He rejects rumours that Mr Ecclestone's TV deals are largely word-of- mouth, making the new company hard to value. "Formula One has annual revenues already contracted of pounds 240m a year between now and 2001. What's unusual about this company is just how much future revenue is contracted for and known in advance."

On reports that analysts are moaning about a lack of financial information, Mr Wilson said: "Analysts always ask for more information but I don't think there are any complaints." Analysts working for brokers in the selling syndicate led by Salomon Brothers are expected to produce their reports tomorrow.

"Bernie has always kept a tight rein on all information to protect his position in negotiations with broadcasters, teams and promoters," said Mr Wilson. "Now the company is going public that has to be balanced against the need to be more transparent."

As part of the float the Federation Internationale d'Automobile (FIA) will get 10 per cent of the new company. This is in return for the FIA granting Ecclestone's company a new 25-year licence which began on 1 January this year, to manage and exploit Formula One.

Mr Wilson says the row with Tyrrell, McLaren and Williams over sharing TV revenues is really a row between the Formula One teams. These three teams refused to sign the so-called Concorde deal which gives the 10 Grand Prix teams 47 per cent of TV revenues.

"Seven teams signed the deal and collect revenue," says Mr Wilson. " They're not so keen on the three who refused to sign it now wanting to join up and take a share."

According to Mr Wilson, "the logical thing is for them all to give up part of their share of the TV revenues in exchange for shares in the company".