For years the name “Bernie Ecclestone” was directly associated with Formula 1. F1 was Bernie and Bernie was… well, Bernie was Bernie. Emotions aside, the Briton would equally prefer to stay in charge of his favorite child or exit the game, if he had to. If you are Bernie, you can opt for the latter and get away with a few scratches. Why Ecclestone wanted out is another whole story, but it is even more interesting to look into how F1 ended up under new leadership and ownership through a procedure that kept going on for over a decade.

There had been various other dealings and transactions, but let’s start from the point when it really gets weird and interesting. Back in 2005, Bernie Ecclestone used to hold a respectable 25% of F1, through his family trust Bambino Holdings (founded 2000, dissolved 2012). Together with German bank Bayern Landesbank they could both claim majority and control F1’s future. In theory, both of them could sell to any potential buyer, each one for his own part and without the need for the buyer to be the same for both. However, in 2006 a major shares selling was made, after which CVC Capital Partners ended up in control of F1. CVC gets shares both from Bayern Landesbank and Bernie Ecclestone. How did that happen?

Well, it might have been random. What is certain is that a German banker named Gerhard Gribkowsky (of the aforementioned bank) was charged with bribery, with the suit claiming he was bribed $28m by Bernie Ecclestone in order to favor the selling of the shares to CVC. Gribkowsky plead guilty (and sentenced to 8.5 years of prison, also carrying charges on several other financial crimes), but Ecclestone never admitted any wrongdoing, despite finally settling the case with $100m. The CVC sale was complete, Ecclestone kept a small share albeit crucial for marginal power games in F1 and CVC retained him as F1’s CEO. This, of course, could have also been random.

At this point it is important to mention that this particular transaction which resulted into a change of the F1 ownership status had to be approved by the FIA, who acted as a regulator. After a feud with the European Commission back in 2001, the FIA was instructed to be strictly confined in its regulatory role, barred from any influence on F1’s decisions of commercial interest. FIA had to grant its approval in cases of ownership changes, but not in the case of flotation (hold onto this…). The FIA approved the CVC deal and F1’s control changed hands.

A few years later (2012), CVC decided it wanted out and attempted to sell the shares through flotation (Singapore market). In this case, the FIA could not approve or disapprove the change of ownership, since the transfer of power would not be carried out through a direct sale. Suddenly, though, at that time, the bribery scandal broke out (the one between Gribkowsky and Ecclestone, for the CVC sale). Under these circumstances, the flotation could not move forward, since the CEO of F1 was charged with such serious allegations. CVC should then find another way to get rid of the share and this time this would require the FIA’s approval.

At about that time, the hot talk in F1 was all about the new Concorde Agreement negotiations, aiming to get the sport through 2020 at least. Bernie had the teams’ vote, but needed to get the FIA aboard as well. The negotiations were carried out between Ecclestone and Jean Todt, the newly elected FIA president. In order to earn his confidence, Bernie offered the FIA a 1% option on CVC’s shares (well, essentially Delta Topco’s, but the same thing for that matter) at a bargain-price of about $460k, instead of an approximate then value of $70m, which the FIA could only cash out in case CVC sells its share. The only thing remaining was finding a suitable, respectable buyer.

The problem in this was that the FIA was required to grant approval for this transaction to happen and this would automatically mean that this 1% cashed out to yield $70m. Well, whichever way you cut it, it’s hard to see this not ringing bells as a conflict of interest, also in potential breach of the previous agreement between the FIA and the European Commission. According to former FIA president Max Mosley, this round of actions is questionable to say the least, in terms of how it aligns with the aforementioned agreement, but it’s up to the EU to pursue the matter any further.

So, the FIA approves the acquisition of F1 by Liberty Media in 2017. CVC gets $3billions, Bernie Ecclestone receives about $29m (while keeping a share of a then estimated value of $27m), Liberty acquires control of F1 and the FIA cashes out about $70m, having only spent $460k some time ago.

Liberty Media appeared to be an absolutely credible, respectable buyer, with no need for a favorable “push” for the transaction to happen. They later also relieved Bernie Ecclestone from his duties as CEO, placing their own Chase Carey in charge, while showing their intentions for a switch in the sport’s governing rationale. This, though, did not seem to bother Bernie too much, if not also helping with defending against any allegations of prior collusion between Ecclestone and Liberty Media. Bernie Ecclestone has managed to get out of the sport, keeping a small share and the chance to carry on doing business walking around the paddocks. Did he bail the right moment? This is something worth taking a separate look…