Neither Lewis Hamilton nor Jenson Button will be the focus of attention on the grid before the start of today's Formula One race at Northamptonshire's Silverstone circuit.
Instead, a 79-year-old 5'4" man with a mop of Andy Warhol-style hair and round glasses will be surrounded by photographers, dignitaries and celebrities. There is good reason for this because the man at the centre of the action is Bernie Ecclestone, the chief executive of F1's Jersey-based commercial rights-holder, Delta Topco. In the 38 years Ecclestone has been in F1's driving seat, his family has banked $3.9bn from the sport and he says there is more to come.
It is hard to tell that Ecclestone is a millionaire, let alone a billionaire. He has no entourage except for a chauffeur, although Ecclestone himself drove me, at a rather nippy speed, in his Toyota Lexus people carrier from his swanky offices facing Hyde Park. It is a long way from his roots.
The son of a Suffolk trawlerman, Ecclestone's life is the epitome of a rags-to-riches story. Leaving school at 16, he established one of Britain's biggest car dealerships while dabbling in driving. After two failed attempts to qualify for F1 races, he bought the Brabham F1 team. His driver, Nelson Piquet, won the World Championship twice. However, Ecclestone had his eye on an even bigger prize. At the time, F1 races ran as ad hoc events. Television coverage was sporadic since races could be cancelled at the last moment if there weren't enough cars to fill the grid.
Ecclestone convinced the teams to sign a contract committing them to race and he took this to TV companies which could then guarantee coverage. His company, Formula One Promotions and Administration (FOPA), negotiated the deals and took a share of the proceeds with the remainder going to the teams and F1's governing body, the Fédération Internationale de l'Automobile (FIA).
In 1990, FOPA had revenues of just £7.6m, but by 1995 this had ballooned to £83.7m and Ecclestone's salary of £54.9m made him the world's highest-paid executive. Realising that he needed to hold the F1 rights directly to cash in his chips, Ecclestone got them in 1997 with the FIA receiving the paltry annual sum of £6m. It was the best business move of Ecclestone's career giving him an annual return on investment of more than 10,000 per cent.
F1 now has 520 million viewers annually with television rights making up about $450m of Delta Topco's revenue last year, according to F1's industry monitor, Formula Money. Race hosting fees generate the same amount; trackside advertising pulls in $250m; $130m comes from corporate hospitality and $50m from sponsorship. Ever the shrewd negotiator, Ecclestone has escalator clauses in all the race contracts which increase the fee by 10 per cent annually. This insulated the sport against the downturn.
Tucking into his roast chicken over lunch, the softly spoken Ecclestone says advertising revenues are "gradually coming back again in all different sports". He adds that, although "corporate hospitality was down about 30 per cent in 2009, this year I think we have got a 10 per cent uplift".
The quickest way to boost revenues would be to add more races, but F1's 12 teams object to the additional travel costs they would incur. There are 19 Grands Prix on this year's calendar and Ecclestone says that the limit is 20. His strategy has been to replace races in traditional locations, such as France and Austria, with emerging nations whose governments are prepared to pay more to use the exposure through the sport to drive tourism.
This bidding war has boosted the average race hosting fee to $31.2m and has changed the sport's landscape. In the past two years alone, races have been added in Abu Dhabi and Singapore with South Korea joining in October this year, India following in 2011 and then a US Grand Prix in Texas beginning in 2012. To stay within the limit, Ecclestone will have to trim several races. The European rounds are at most risk since the governments in these countries do not need to use the sport for promotion and so they only give limited financial support.
"The Europeans are going to have to pay more money or we will have to go somewhere else," says Ecclestone. "Russia has also got to go on the calendar. We will do it the year after next in Sochi." Even the historic Monaco Grand Prix could face the chop, as Ecclestone says, "We can do without Monaco." The principality has been on F1's calendar since 1955 and is believed to be the only race which pays no fee. Ecclestone says he doesn't expect he will ditch Monaco but grumpily admits, "They don't pay enough."
This is hard-nosed Ecclestone at his best. He is skilled in steering discussions to subjects that suit him. Disarmingly, many of his responses begin with "I don't know", resulting in the questioner offering their opinion instead.
The waiting room to his office is littered with art and sculptures but one sums him up better than the rest – a bronze work of two disembodied hands gripping each other. In the old-school entrepreneur tradition, all his deals are done on a handshake.
Despite his age, Ecclestone works nine to five, six days a week and his only known hobby is collecting miniature Japanese sculptures. He is a keen poker player but it's tough to tell whether this is to hone his negotiation skills. They were put to the test in 2006 when the private equity firm CVC bought F1 from Ecclestone's family trust and three investment banks – JP Morgan, Lehman Brothers and Bayerische Landesbank. Ecclestone negotiated a personal stake of 5.3 per cent in Delta Topco, with his family trust owning 8.5 per cent, CVC controlling the business with a 63.4 per cent stake and management and financial advisers making up the remaining minority shareholders.
CVC used a $2.8bn loan to finance the acquisition, with the bulk coming from RBS and $550m from Lehman Brothers. F1 has driven over several bumps in the road in the past year, including the departure of several teams and the threat of a rival series, and it even got an unexpected boost from the recession. Libor rates crashed last year to promote lending between financial institutions and this led to the interest charges on F1's debt being 54.7 per cent lower than the previous year.
By the end of 2009, F1 had reduced its net bank debt to $1.6bn. CVC's UK managing director, Nick Clarry, says, "We have no need to refinance until 2013 at the earliest, by which time we would expect conditions to have improved." On exit, it can look forward to a high-octane return as Ecclestone believes that the business is worth "six or seven billion".
Ecclestone says he has no intention of retiring and his driving force is that "there are always new problems to solve". However, his dedication to work has come at a high price. For 24 years, Ecclestone was married to Slavica, a Croatian former Armani model 28 years his junior and nearly a foot taller. He met her at an F1 event but last year their marriage was annulled on the grounds of his unreasonable behaviour. He now has a new lady in his life.
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