F1-NET

Formula One boss Bernard Ecclestone ushered team managers into his trailer at the Indianapolis Motor Speedway. Nearby, mechanics tended to an array of million-dollar racing cars.

It was 10 a.m. on a June day in 2005 as fans filed into their seats for the U.S. Grand Prix. Two days earlier, a Michelin & Cie.-made tire on Toyota team driver Ralf Schumacher’s car had burst on turn 13 and the auto smashed into a wall at 175 miles per hour, Bloomberg Markets magazine reports in its December issue.

The tiremaker said it couldn’t rule out more accidents.

As the managers gathered around, Ecclestone called Max Mosley, president of Formula One’s ruling body, the Federation Internationale de l’Automobile (FIA), at home in Monaco in a last-minute attempt to persuade him to alter the racetrack layout so the grand prix could proceed smoothly.

Mosley was unmoved, according to Paul Stoddart, then owner of the now-defunct Minardi team, who was in the trailer. He wouldn’t change the rules.

With the 1 p.m. start nearing, the crowd swelling toward 120,000 and a public relations disaster looming, Ecclestone lost his temper and swore at Mosley, by Stoddart’s account. As if on cue, irate fans hurled beer cans onto the racetrack after 14 of the 20 cars withdrew from the race.

“It’s the first time in all the years I’ve known Bernard when he hasn’t been in control,” Stoddart says.

Total Control

For his part, Ecclestone now says Mosley was “probably right” to stop the race because the FIA president could have faced a murder charge if another crash on the same turn caused a fatality.

Total control has been the hallmark of Ecclestone’s three- decade reign over the world’s most profitable and popular auto- racing series.

As chief executive officer of London-based Formula One Management Ltd. -- or simply “F1 Supremo” as the papers style him -- Ecclestone transformed a niche series largely confined to Europe into a complexly structured, $4 billion commercial enterprise that brings in sales of $1 billion a year, stages races in 18 countries and attracts about 50 million TV viewers on an average race Sunday.

These days, Ecclestone is struggling to keep his grip on the business.

Bribery Case

At 81, he’s under pressure on several fronts. Prosecutors in Germany have named him as a Beschuldigter, or suspect, in a bribery case linked to the sale of Formula One six years ago. Ecclestone, who hasn’t been charged, is scheduled to testify in a Munich court today and tomorrow.

In addition, race teams such as Ferrari and McLaren, which complain that Ecclestone is failing to keep Formula One up with the times, are considering putting on a breakaway series that would weaken F1. The teams’ contractual obligations, including staying in F1, expire after 2012.

The greatest threat of all to Ecclestone’s dominance could come from a looming takeover bid.

Rupert Murdoch’s News Corp. and the Agnelli family’s Exor SpA (EXO) want to buy the 63.4 percent of Formula One owned by London- based buyout firm CVC Capital Partners Ltd. through its Jersey, Channel Islands-based holding company Delta Topco Ltd.

The would-be buyers are pushing ahead despite News Corp.’s run-ins with U.K. authorities over a phone-hacking scandal involving one of its newspapers, according to two people with knowledge of the situation.

‘Bloody Enormous’

CVC, which manages $44 billion, has invested in Formula One and 53 other companies, including luggage maker Samsonite International SA and Spanish road-toll operator Abertis Infraestructuras SA.

CVC executives declined to comment on the Formula One takeover interest, referring calls to Ecclestone, who owns a 5.3 percent stake in F1. He says it would take a “bloody enormous” bid for CVC to sell.

“We’ve been building it -- more audience, more income,” Ecclestone says. Ultimately, he says, CVC Managing Director Donald Mackenzie will decide. “He’s the guy who will turn the lights on and off,” Ecclestone says. “I have very few shares, so it’s nothing to do with me.”

Under CVC’s ownership, Ecclestone says he has retained complete autonomy over management even without the full control of the commercial rights he had in the late 1990s.

‘No Angel’

All the same, his holding is now smaller than that of his former wife Slavica. The mother of his daughters Tamara, 27, and Petra, 23, controls 8.5 percent of the business through a family trust, Bambino Holdings Ltd.

Slavica, a 6-foot-2-inch (188-centimeter) Croatian who stands a foot taller than Ecclestone, was granted a divorce in the U.K. in an out-of-court settlement in 2009 after 24 years of marriage. Among several other owners, the administrators of Lehman Brothers Holdings Inc. (LEHMQ), which went bankrupt in 2008, control 15.3 percent of F1.

The son of a fisherman, Bernard Charles Ecclestone was born into the Great Depression in Suffolk, England.

During World War II, he used money earned delivering newspapers to buy buns to sell at school for a 25 percent profit, according to No Angel: The Secret Life of Bernie Ecclestone by Tom Bower (Faber & Faber, 2011). Ecclestone left school at 16 and built up a secondhand motorbike and car business in south London.

Key Commercial Insight

Ecclestone came to Formula One at age 28 in an era when race cars were not plastered with sponsor logos and the drivers included a Spanish marquis and a Thai prince. He bought two cars from the England-based Connaught Engineering team and in a brief stint as a driver failed to qualify for the Monaco Grand Prix.

After buying three-time champion Jack Brabham’s team in 1971, Ecclestone went on to lead the organization that represented the racing outfits, then called the Formula One Constructors Association, and in 1981 won control of the sport’s television rights from the FIA.

That was Ecclestone’s key commercial insight, one that would set an example for the English Premier League in soccer: to see that Formula One’s future lay in selling TV rights.

By then, his first marriage, to telephone operator Ivy Bamford, had ended in divorce. Ecclestone met Slavica, his second wife, at the 1982 Italian Grand Prix in Monza, where she was working as a model. They married in 1985.

By that time, Ecclestone was well on his way to becoming one of Britain’s richest men. In 2004, he would sell what was at the time London’s most expensive residence to steel magnate Lakshmi Mittal for 57 million pounds ($90 million).

TV Rights

In 1993, Ecclestone helped install Mosley, then his legal adviser, as FIA president. Two years later, he acquired F1’s commercial rights, including television rights, from FIA for 15 years. He later extended the agreement until 2110.

From 1999 to 2001, he sold off 75 percent of the business for a combined $2 billion to Morgan Grenfell Private Equity Ltd., Hellman & Friedman LLC and Leo Kirch’s German media group. Following heart surgery in 1999, Ecclestone says, he transferred 25 percent to the family trust to mitigate his heirs’ inheritance tax liabilities.

Through it all, Ecclestone survived a number of hazards, including the collapse of Kirch’s empire in 2002 -- eventually brokering a deal for CVC to buy the Formula One business from Kirch creditor Bayerische Landesbank -- and a breakaway threat by race teams in 2005.

‘We Challenge Him’

Today, more than half a century after Ecclestone’s first foray into Formula One, questions about his future have overtaken talk of his past successes.

The teams he once ruled grumble that his business model is outdated, prizing TV rights, which bring in about $500 million a year, over promoting an Internet presence that could attract a new fan base.

By not aggressively promoting the series in markets such as China and the U.S., where Formula One is less popular than elsewhere, Ecclestone is failing to attract new audiences, says Martin Whitmarsh, McLaren Racing Ltd. CEO and chairman of the Formula One Teams Association.

“The way F1 is consumed is going to change over the next few years,” Williams team Chairman Adam Parr said during a question-and-answer session with fans in June. “It’s time we challenge him.”

In addition to TV rights, F1 revenue comes from fees charged to race promoters -- often the cities or countries where the circuits are located.

‘We’re Poorly Paid’

Those fees amounted to $535 million in 2010, according to London-based industry monitor Formula Money. The teams, which get about half of the $1 billion in total annual revenue, feel shortchanged by Ecclestone, says Mark Jenkins, a professor of business strategy at England’s Cranfield University and co- author of Performance at the Limit: Business Lessons From Formula 1 Motor Racing (Cambridge, 2009).

“Let’s be clear: We’re poorly paid,” says Vijay Mallya, the billionaire owner of the Force India F1 team, as he holds court in the team trailer across the water from his 312-foot (95- meter) yacht Indian Empress at the European Grand Prix in Valencia in June.

The chairman of Bangalore-based United Breweries Holdings Ltd. (UB), which controls liquor, beer and airline companies, says he’s delving into his personal fortune to keep his Force India team going. A holding company Mallya co-owns bankrolled Force India’s $63 million loss in 2009, according to team filings.

“Many of the teams feel that in a sense he stole the business from them,” Jenkins says of Ecclestone. “They were the show, and he effectively appropriated that show.”

New Threat

While Ecclestone rejects such accusations, saying he took financial risks when teams didn’t, there’s talk once again among some teams of a breakaway series. In 2005, Ecclestone promised Ferrari an annual $50 million sweetener to sign new Formula One terms, thereby dividing a rebel group of teams that were plotting secession, according to Bower’s biography.

Ecclestone scoffs at the new threat. Formula One is hardly unknown, he says, slipping into a playful sarcasm. “We’re known worldwide, so I suppose we must have done something right.” He derides the idea that teams have a real chance to mount a breakaway or unseat him. “I don’t know where they meet -- probably Starbucks or somewhere,” he says. “These are nice coffee chats.”

Bower says Formula One is definitely a healthy business. “It’s an amazing moneymaking machine,” he says.

‘A Bribe?’

The series generated earnings before interest, taxes, depreciation and amortization of $428 million in 2009, according to filings by Delta 3 UK, a unit of Formula One holding company Delta Topco Ltd.

CVC sealed the deal after borrowing $2.5 billion in 2005 to acquire Bayerische Landesbank’s 48 percent holding and most of the Ecclestone family’s 25 percent stake. As part of the transaction, Ecclestone re-acquired a 5.3 percent stake.

Former FIA President Mosley says quick thinking has kept Ecclestone in a dominant position. “If he went into a revolving door behind you, he would come out in front,” Mosley says.

Nonetheless, Ecclestone’s hand is weaker than it used to be. His one-time ally Mosley stepped down as FIA president in 2009, and Ecclestone doesn’t have the same rapport with his successor, former Ferrari team boss Jean Todt, Jenkins says.

On another front, German prosecutors said earlier this year they were investigating suspicions -- Verdachte -- that Ecclestone bribed former Bayerische Landesbank risk manager Gerhard Gribkowsky in the sale of Formula One to CVC. “A bribe?” Ecclestone says. “You shouldn’t believe all you read, you know.”

‘Very Far-Fetched’

Ecclestone said he was interviewed by prosecutors in April. He declined to comment further.

Gribkowsky has been charged with breach of trust, accepting bribes and tax evasion. Rainer Bruessow, Gribkowsky’s lawyer in the case, which went on trial in October, says the allegations against his client are “manufactured and very far-fetched.”

CVC said in a statement that it isn’t aware of a payment to Gribkowsky in relation to the buyout.

As vulnerable as Ecclestone is, Formula One suitor News Corp. (NWSA) is embroiled in a phone-hacking scandal in the U.K. that has caused it to shut down the News of the World newspaper, which has admitted accessing the voice mail accounts of celebrities and others.

Amid the controversy, News Corp. announced it was shelving a £7.8 billion offer for the 61 percent of pay-television broadcaster British Sky Broadcasting Group Plc (BSY) it doesn’t own. In July, BSkyB won the rights to broadcast the entire F1 series for seven years from March 2012 onward.

The U.K. sideshow is diverting News Corp.’s attention away from its F1 bid, says Tim Westcott, an analyst for media consulting firm IHS Screen Digest in London.

James Murdoch

A person familiar with the situation counters that the bid was very much alive as of mid-October. That individual says News Corp. Deputy Chief Operating Officer James Murdoch, the 39-year- old son of CEO Rupert, and Exor chief executive John Elkann, 35, are actively courting racing-team owners and working on a 5- to 10-year business plan for Formula One.

News Corp., whose pay-television channels already air Formula One races in Germany and the U.S., faces another obstacle, Westcott says: It would have to agree to a raft of conditions to assure European Union regulators that it’s not going to monopolize the television rights. Alice Macandrew, a spokeswoman for News Corp. in London, declined to comment, as did Exor spokesman Richard Holloway.

Socialite Daughters

Today, Ecclestone continues to run Formula One from a glass-fronted building he bought in 1985.

He’s usually in his office overlooking London’s Hyde Park by 9 a.m., sometimes lunches not far away in Knightsbridge at the restaurant in the Emporio Armani store and shuns nightlife unless it’s to turn out for a party hosted by his high-spending socialite daughters. In August, Petra’s wedding featured live performances by the Black Eyed Peas.

Ecclestone conducts business with a mobile phone, whose ring tone is from the soundtrack of The Good, the Bad and the Ugly, and jets to races in his own Dassault Falcon 7X. According to Bower, he travels with a briefcase full of cash. “If I do, it’s my own money,” Ecclestone says.

As the mid-morning sun beats down on the Valencia race circuit in June, Ecclestone sits at a desk in an air-conditioned mobile office. Soundproofing turns the roar of cars speeding around city streets at 180 miles per hour during a practice session into a hum.

‘I Could Just Walk’

Ecclestone says he’s still the best person to run F1. “I travel all over the world, and when I shake hands with people they know a deal’s a deal, and that gives me a lot of credibility,” he says. “It takes a lot to build that up.”

With others threatening to take the wheel from him, he doesn’t rule out simply pulling over and retiring. “I could just walk out,” he says.

What he won’t do, he says, is help new owners find a successor: “That would be like Frank Sinatra looking for another singer.”

The trial of a former Bayerische Landesbank manager over what prosecutors say were $44 million in bribes to facilitate the sale of the bank’s stake in Formula One racing may shed light on business practices at the world’s most- watched racing series.

Gerhard Gribkowsky, 53, was charged in July with accepting bribes, breach of trust and tax evasion. Prosecutors claim he received the bribes as part of the 2005 sale of BayernLB’s 47 percent stake in Formula One to CVC Capital Partners Ltd.

The trial began today in Munich is scheduled to feature testimony from Formula One Chief Executive Officer Bernard Ecclestone, who is also being investigated, and CVC managing partner Donald Mackenzie. The criminal trial is one of several lawsuits stemming from the transaction in Germany and England.

“It’s going to be fascinating,” Tom Cannon, a professor at England’s Liverpool University who has researched the way Formula One and other sports are financed, said. “Ecclestone has found ways of resolving conflicts before they got to court; this time, he hasn’t managed to.”

BayernLB acquired the Formula One stake following the 2002 bankruptcy of Leo Kirch’s media group. Gribkowsky, BayernLB’s chief risk officer at the time, quickly clashed with the Formula One chief and sued him in a London court over corporate governance rules Ecclestone changed to limit the lender’s influence.

$50 Million Demand

Ecclestone wanted to push BayernLB out and saw a chance when CVC signaled its interest, prosecutors said in the indictment. Gribkowsky demanded $50 million from Ecclestone as a reward for consenting to the deal and threatened to disclose possible tax violation by a trust run by Ecclestone’s wife at the time, prosecutors said.

Both men agreed on a plan that funneled $44 million to Gribkowsky through sham contracts and off-shore companies, according to prosecutors. Gribkowsky then single-handedly negotiated the purchase agreement without seeking alternative bids, prosecutors said. BayernLB’s share was sold for 840 million euros.

Rainer Bruessow, Gribkowsky’s lawyer, told reporters before the hearing began that the allegation will collapse and the trial will end with an acquittal.

CVC had no knowledge of any payment to Gribkowsky, the company said in an e-mailed statement last week.

Nov. 9 Testimony

Ecclestone, who has denied any wrongdoing, is scheduled to testify Nov. 9 and 10. His attorney Sven Thomas didn’t reply to an e-mail seeking comment.

Because Ecclestone didn’t want to pick up the tab for the bribes, Gribkowsky set up another scam to funnel money from BayernLB to the Formula One chief, according to the indictment. The bank manager signed a sham contract under which BayernLB had to pay Ecclestone a kickback of $41.4 million and another $25 million to his then wife’s trust, prosecutors claim.

For BayernLB, which received a 10 billion-euro ($13.9 billion) government bailout following losses on U.S. subprime mortgages, the trial is one of several legal issues. In June, Munich prosecutors charged the lender’s former management with breach of trust over the 2007 purchase of Hypo Alpe-Adria Bank International AG.

“A quick solution of the Gribkowsky case is of particular importance to BayernLB to prevent it from leading a permanent multifront war with its owners, clients, bank supervisors and EU authorities,” said Bernd Rudolph, an finance professor at Munich’s Ludwig-Maximilians-University.

Auditors

BayernLB had its internal audit department check the bank’s processes during the Formula One sale and also asked an external auditor to verify the sales price, BayernLB spokesman Matthias Luecke said. Neither review found any wrongdoing, he said.

A day before he was arrested in January, Gribkowsky told prosecutors he was aware of the fact that he didn’t “really have a right” to the money he received and that he was “just lucky,” according to a memo by Munich prosecutors obtained by Bloomberg News.

His plan was to use the money to help children with cancer, the document cites him as saying. Ecclestone initially offered him even $80 million, Gribkowsky said. Prosecutor told him his claims were “implausible,” according to the memo.

Gribkowsky has been in custody since Jan. 5. The court has scheduled 26 days of trial and about 40 witnesses have been called to testify.

For a guy who was a ski instructor turned F1 driver agent to team boss to engine manufacturer, you have to hand it to Craig Pollock…he’s living the dream. Once a manager for world champion Jacques Villeneuve, the man has certainly moved beyond his station in life to become the head of Propulsion Universelle et Recuperation d’Energie (PURE) which will create engines for the F1 series.

Part of making engines is having people who can actually design them and who better than FIA’s director of power train and electronics Gilles Simon? You may have caught the announcement last week on AUTOSPORT but the magazine caught up with a team bosses this weekend and they are none too happy about the appointment. According to Lotus Renault GP boss Eric Boullier, Simon saw a lot of information that is sensitive. AUTOSPORT has the story:

“For me it is an issue. He had access to a lot of IP and a lot of information, as he was talking to a lot of engine people. The FIA should release people at least with a gardening leave period long enough to make sure there is no transfer of technology.”

Equally vocal about the situation was Renault’s Rob White and Pollock told AUTOSPORT that he had a sit-down with the White in order to discuss the situation:

“I had a long chat with Rob White, and I purposefully pulled him out because he had made a statement in the FIA press conference.

“I can understand what he is saying, and I suggested Rob also discusses that directly with Gilles Simon. Rob has made it clear, however, that the problem does not lie with myself and PURE, the problem actually lies within the system and the FIA.

“If somebody wants to leave a position, then there are certain ways they can do that – and it depends on the contract. Gilles was free to leave the FIA without any blockages, without any gardening leave and it was done all above board.”

So here is the crux, if the FIA hires talent from the F1 community to help develop regulations and technical parameters that are applicable to the teams, then perhaps there is an issue with the FIA’s contractual verbiage that would secure the intellectual property of the teams in just such a case. On the other hand, you cannot suggest that this doesn’t happen within the teams themselves as an event like Pat Fry leaving McLaren for Ferrari may prove. Surely you cannot pretend that an engineer will forget everything he knows. They apply their craft at whatever employer they happen to be with.

Flavio Briatore once suggested that this is the best way to progress, hire engineers and the IP comes with them. The 2007 saga known as spygate revealed a deeper, more insidious situation where technical manuals were stolen from Ferrari but can one be expected to not apply their life’s work on a new project? Surely Pat Fry has started to benefit Ferrari and few could argue that Red Bull technical boss Adrian Newey hasn’t had a major impact no matter where he goes and the team he leaves suffers the loss.

In the end, Simon may have seen technical details of the teams but I am unclear what Pollock is leveraging when he told AUTOSPORT that it is really an FIA problem due to their weak employment contract verbiage. The teams surely know that Simon knows their secret sauce and this is concerning but then Williams F1′s newest employee, Mike Coughlan, certainly knows Ferrari’s secret sauce as well. Not sure how you can prevent PURE from benefiting from the data in Simon’s melon but I guess the FIA could and should have a gardening leave clause for their employees as the IP they are exposed to is of a highly secretive nature and PURE seems the better for it.

It is believed that the BBC will pay around £18 million per season for the F1 broadcast rights in the new era, half what they are paying now (the £200 million five-year deal that started in 2009 was famously over-the-odds).

It is thought there is an escalator fee built in, however, so that £18 million figure may rise. Production costs, currently around £10 million annually, will of course decrease dramatically.

It is unclear as yet how large the BBC’s production team will be. It also remains to be seen whether the BBC can sustain their current viewing figures, which average around three to five million per race, in direct competition with Sky.

Sky Sports Early reports suggest Sky are paying around $60 million (£36 million) per season for their F1 deal although again there is believed to be an escalator fee built in.

The big question mark is over how many extra subscribers Sky can attract with their Formula One coverage and how many of their current subscribers will watch the races.

It is thought there is very little crossover with their football demographic.

Around 10 million homes in the UK have satellite with another three million accessing the channels via cable. Subscription packages vary but you are likely to be paying north of £50 per month to access Sky Sports.

The teams
The teams seemed completely taken aback by Friday's events.

Apparently they were not consulted in the process. Having insisted all along that they needed free-to-air coverage for their business models, mild panic reigned for a period.

After a mid-afternoon meeting with Bernie Ecclestone, however, they were all toeing the party line.

“Faced with the prospect of losing Formula One entirely from the BBC, this is hopefully the most sensible solution,” said Red Bull team principal Christian Horner.

Interestingly, they all seemed very sketchy on the details, giving the impression that this is all being done on the hoof.

The fans
Fans without Sky are the big losers and they vented their fury in no uncertain terms on Friday. Twitter positively exploded.

Many say they cannot and will not subscribe to Sky Sports and will also boycott the BBC coverage in protest.

Ecclestone has gambled that enough of them will, despite their rhetoric, pay for the privilege — and that keeping the sport on the BBC, even in a reduced format, will appease the teams and sponsors whose business models are predicated on large viewing figures.

Fans, as ever, will vote with their remote controls and at the moment they are extremely unhappy.

Bernard Ecclestone has admitted for the first time that he did pay money to banker Gerhard Gribkowsky - but says he only did so because he was 'threatened' over other financial matters.

Gribkowsky was charged this week for having allegedly accepted a $44 million bribe in relation to the sale of F1 by the Bayerische Landesbank.

Ecclestone has been investigated by German prosecutors over his role in the matter, and speaking to <>The Daily Telegraph he said that he did pay over money - but only because Gribkowsky threatened to expose some of his financial dealings to the Inland Revenue.

"The Inland Revenue obviously had to check everything," Ecclestone said. "It took five years going through that. I didn't deal with it. The trust had to show it was correct.

"The taxation people in England at the time were in the middle of settling everything with the trust and the last thing you need is for them to start thinking something different. He Gribkowsky was shaking me down and I didn't want to take a risk. Nothing was wrong with the trust. Nothing at all.

"He never said to me if you don't give me this I will say that. He left me with the fact that could he do it or not."

Although Ecclestone insists he had nothing to hide from the Inland Revenue, he elected to pay Gribkowsky because any investigations would have cost him money.

Ecclestone said he consulted his lawyers for advice on what to do.

"They said 'I tell you what would happen, the Revenue would assess you and you would have to defend it, because you could defend it, and you would be three years in court and it would cost you a fortune. Better pay'."

He added: "I never bribed anybody or paid any money to anybody in connection with the company. I got five per cent for the sale of the company. Bayerische Landesbank approved the sale and approved the commission, which was cheap.

"I should have got more because for that sort of deal a bank would have charged a lot more. There were no secrets."

Bernard Ecclestone is Formula One's CEO (F1). Bernard is not everyone's favorite. When you have the power that he has, you're not going to have a lot of friends.

A trawlerman's son, the former motorcycle and parts salesman has done well for himself, growing up with essentially nothing and becoming a billionaire and maybe the most powerful man in motorsports.

Bernard has had some health issues in the past but stated early this year: "I'm working till I drop." He may have more than health issues to be concerned about.

Rumors have surfaced in the past regarding shady dealings in and around Bernard. Now, another report from two German newspapers have come out stating Bernard Ecclestone paid a $50 million bribe regarding the sale of F1's commercial rights five years ago. This story first popped up at the beginning of the year.

Earlier this month, a German banker (Gerhard Gribkowsky) - who was formerly the head of the F1 holding company - was arrested on suspicion of corruption, tax fraud, bribery and breach of trust after "two consultancy contracts totaling $50 million" appeared in two of his accounts in Austria. At this point, according to German law, a tribunal will now decide whether he will stand trial. Gribkowsky could face up to 10 years in jail.

The newspapers, Stern and Suddeutsche Zeitung, refer to 'concrete evidence' to corroborate the claims that Bernie bribed the bank.

CVC Capital Partners - who owns majority interest in F1 - is detaching themselves from the allegations saying: "CVC confirms that it has no knowledge of, nor any involvement in any payment to Mr. Gribkowsky or anyone connected with him in relation to CVC's acquisition of F1."

Bernard, who continues to deny any involvement, says the prosecutors and newspapers have it all wrong concerning the accusations stating: "It's absolute nonsense; I don't even know why I would have given him money."

So is Bernard in trouble? That's a good question. The German prosecutors say that Bernard remains under investigation. But it remains to be seen and I'm not sure if he'll actually be involved in the legal proceedings; therefore, it would seem that Bernard could dodge another bullet.

Bernard didn't become as powerful as he has without knowing more than most. When the proverbial s*** hits the fan, he always comes out smelling like a rose.

There's been talk of CVC looking into the possibilities of selling F1 and controversies like this may hasten the process.

Maybe Bernard will call it quits and take the money and run … figuratively, if not literally. On the other hand, Bernard said a week or so ago that if the price was right, he might buy back F1.Yes, he really said it. All of this still makes you wonder.

Bernard Ecclestone has said that he would likely approach Channel 5 first if the BBC elects not to extend its deal to cover Formula 1.

The BBC's current contract to broadcast grand prix racing finishes at the end of 2012, and there has been speculation that budget cuts at the company could make it unable to commit beyond then - or even exit its contract a year early.

Ecclestone told The Sunday Telegraph that he hoped the BBC would choose to continue covering the sport - but admitted there were other options if it did not happen.

"We have got no problem with the Beeb," he said. "I can't see how the BBC could cancel [its contract early]. We could probably sue them."

Speaking about other contenders to keep F1 on free-to-air television, Ecclestone suggested that he would approach Channel 5 owner Richard Desmond.

"Let's wait and see about the BBC because at the moment they want to make a noise," he said. "[I would] talk to Richard, obviously."

He added: "It isn't possible that F1 could go on to pay TV, we wouldn't want to do that."

Ferrari president Luca di Montezemolo says Formula 1 teams will be open to the idea of forming their own championship from 2013, on the back of interest from News Corporation about getting involved in the sport.

A tie-up between News Corp and Italian investment group Exor, which has strong ties to Ferrari parent company Fiat, has prompted speculation that Ferrari could be evaluating the possibility of a breakaway series.

Now, in an interview with CNN, di Montezemolo has said that all options are open at the minute - as he suggested that there was no reason to feel the teams had to recommit to working with F1 owners CVC and Bernatd Ecclestone beyond the end of the current Concorde Agreement.

"I think we have to be very pragmatic. At the end of 2012, the contracts of every single team with CVC will expire. So, we have three alternatives," di Montezemolo said in an interview broadcast on CNN on Friday.

"We renew with CVC, or we theoretically -- as the basketball teams did in the U.S. with great success -- we create our own company, like the NBA. Just to run the races, the TV rights and so.

"And third, to find a different partner. Bernie Ecclestone did a very good job but he has already sold out three times, so he doesn't own the business anymore. It is CVC that will sell. It will be the teams' decisions.

"At the end of 2012, the contract will expire, so theoretically CVC doesn't own anything. I think it is important to have alternatives. We will see. We have time to do it."

Di Montezemolo was also scathing of the current state of F1 – suggesting that new rules had made grand prix racing not as pure as it was in the past.

"We have gone too far with artificial elements. It's like, if I push footballers to wear tennis shoes in the rain. To have so many pitstops - listen, I want to see competition, I want to see cars on the track. I don't want to see competition in the pits," he explained.

"In the last race there were 80 pitstops. Come on, it's too much. And the people don't understand anymore because when you come out of the pits you don't know what position you're in.

"I think we have gone too far with the machines, too many buttons. The driver is focalizing [focusing on] the buttons, when you have the authorization to overtake. We have gone too far.

"Ferrari will push a lot with the authority - with the respect that we have to the federation and the other teams - to avoid going too far with F1. Because I think it can create problems for the television people and on the racetrack."

Di Montezemolo has backed calls from other leading F1 figures for the sport to do more to improve its promotion – and to embrace new media much better than it has up until now.

"We have to invest in the U.S. We have to improve new technologies in F1 for the people watching the television, for iPad, for the Internet. So I think we are in front of a very important moment," he said.

"We will race in Russia and India. F1, thanks also to Ecclestone, has become a worldwide sport. Now we have to find the best solution. It is important to invest for the future and the other teams."

Any eventual investment in F1 would have to be in the interest of the event itself and its stakeholders, CVC added.

"James Murdoch (of News Corp.) has informed us that the approach is friendly, at a very preliminary stage, and that they acknowledge that Formula 1 is privately owned by CVC and not currently for sale," the private equity firm said in a statement late Tuesday.

News Corp. and Italian holding company Exor Tuesday confirmed news reports that they were exploring the possibility of forming a consortium to bid for Formula 1. They said they would hold meetings with potential minority partners and "key stakeholders" in the coming weeks and months.

Exor owns 30.45% of Fiat SpA (F.MI), the Italian car maker behind the sports car brand Ferrari, a prominent participant in Formula 1.

Its stock was 1.30% higher at EUR24.88 in Milan at 1000 GMT.

"The news took us by surprise," said one analyst on condition of anonymity. "From a strategic point of view, for Exor it would be an operation that would be coherent with its search for new business with a greater focus on emerging markets."

Formula 1 is popular in emerging markets such as Brazil.

CVC Capital Partners has owned a majority stake in Formula 1 since 2005. At that time, the private equity firm declined to say how much it had cost, although people in the industry had estimated Formula 1 at between $2 billion and $4 billion.

News Corp. owns Dow Jones & Co., publisher of this newswire, and The Wall Street Journal.

It is a truism that nothing in Formula 1 remains constant – be it the technical or sporting regulations, the structure of the calendar, financial arrangements, or any other aspect of this most complex and expensive of sports. And so it is with the Concorde Agreement, the tripartite covenant which provides F1's governing framework.

Back in the early eighties when first the Concorde Agreement was adopted as a means of broking peace, the F1 paddock was filled with tobacco executives. Sponsorship and its activation were still in infancy. The only mainstream car maker in the sport was Renault, with Cosworth supplying 80 percent of the grid and the garagistes holding sway. Ferrari was about to go into a competitive downhill slide that would last 21 years. The number of TV broadcasters could be counted on the fingers of a mittened hand, and then only selected races were televised, and grandstand tickets cost a fiver in any currency.

The agreement was signed on January 19, 1981 by the Fédération Internationale du Sport Automobile (the then-sporting division of the FIA) and the Formula One Constructors Association (previously known as F1CA, but changed for obvious reasons...), and it served the sport until the end of 1987.

At that stage not a word was said about free-to-air television, because what coverage was given was provided for free in any event by FOCA to the broadcasters!

The next agreement, broadly similar to the original save that it now took into account television revenues in line with increasing world-wide interest in the sport, ran for a further five years before being superceded by yet another five-year deal in 1993. This existed until 1997, although it was interrupted by the sale of F1's commercial rights by the FIA to Bernie Ecclestone – a staunch ally of then-president Max Mosley.

The 1998-2007 agreement was dogged by delays and legal threats and three teams – McLaren, Williams and Tyrrell – initially refused to sign the agreement. But for the first time in Concorde history a tripartite agreement was concluded, with the FIA on the one side (after FISA had been absorbed into the world body in line with Mosley’s global strategy); the commercial rights' holder on the second; and the teams collectively making up the third leg of the triangle.

By now F1 had developed into a global sport. Virtually every country now took television feeds, motor manufacturers prepared to enter F1 at the rate of two a year, the internet was gradually spreading across the world and tobacco companies, aware their days as free marketers were facing chronic restriction, made plans to spend, spend, spend and then spend some more.

Crucially, the world was waking up to pay-per-view broadcasts, via cable or dishes. Thus all parties agreed a clause which obliged the commercial rights holder (CRH) to use best endeavours to procure free-to-air television contracts – the income of which was divided 54/47 amongst the CRH/teams respectively. By extension, the CRH could do pay-per-view TV deals where no free-to-air broadcaster matched the terms on offer...

In those days TV contracts for prime territories commanded ?10m maximum a year – of which 12 teams shared less than half the revenue – while tobacco companies paid anything up to ten-fold that for two cars liveried in their colours. So it was little wonder this clause was insisted upon by teams' marketing departments who were ever mindful of the need for the logos of their primary paymasters, namely tobacco companies, to be seen by as many eyeballs across the world as possible. In addition, incoming car companies wished their logos to be seen by as large a global audience as possible – until they realised only one of their number could win, with, by extension, one finishing (at best) seventh...

Around this time the CRH sold 50% of the rights to exploit the sport commercially to German media entity EM-TV, which in turn found itself in serious financial difficulties after agreeing the deal. It turned to KirchMedia, then a German pay-per-view giant, which then exercised EM-TV's option to acquire an additional 25% of the rights.

Somewhere along the line Kirch failed to differentiate between 'endeavour' and 'must', and with the (mainly German) car companies breathing down the neck of founder Leo's neck to broadcast free-to-air – simultaneously threatening to start their own GPWC series – plus Kirch's inability to make pay-per-view work in other sports, the company collapsed in a pile debts owed to the likes of Lehman Bros, JP Morgan and BayernLB.

CVC, the current majority owner of the leased commercial rights, purchased the rights from said banks before a restructuring which saw both Lehman and JP Morgan retain shares.

It's worth noting that the FIA had not sold the sport, or even its rights, as is so often erroneously suggested – the body simply leased out the rights, in two deals of 13 years and 100 years respectively, to the CRH.

The first crack appeared in the golden clause at end of 2000 however, when South Africa's state-owned broadcaster did its sums and realised a full season of South American football could be procured for a quarter the price of a 16-race F1 deal – simultaneously attracting a four-fold audience. Thus SABC turned its back on free-to-air F1, with pan-African satellite sports broadcaster Supersport picking up the rights on a pay-per-view basis. In terms of the deal, SABC was permitted by Supersport to broadcast highlights after midnight. The CRH had his cake, and, crucially, gobbled it...

Finland soon followed with a similar pay-per-view/free-to-air structure, as did Germany, which offered so many viewing options that the choice made fans' eyes water, and thus the die was cast for pay-per-view provided the deal on the table bettered free-to-air’s best offer. All of which enriched a commercial entity to the detriment of teams and fans.

Meanwhile F1 changed at an enormous rate. Tobacco livery was banned, car companies left one by one, the teams tired of seeing a man go from millionaire status to multi-billionaire in ten short years on the back of their endeavours while they yielded just 23% of the sport's overall underlying revenues as a vulture fund sucked up the rest. And above all they collectively refused to accept the then-autocratic ways of the governing body. Above all, sports sponsorship had changed from sticker space to business-to-business and activation activities, with certain sponsors not even demanding space on cars/overalls/team kit in return for lots of lolly.

Something had to give, and that something turned out to be the renewal of Concorde at the end of 2007.

As regular readers of this column know, it took almost three years to agree the document, which differed vastly from its predecessors in virtually every single respect save for having the same title page. The current document, agreed in August 2009 – almost two years after its predecessor expired – changed F1's entire landscape, in the process persuading Mosley to step away from office.

Sources advise that no less than nine versions did the rounds before it was finally signed by the FIA, CRH and the 12 teams, while another insider suggests 31 issues totalling over 1000 pages were bandied about. Included in that lot were something like 600 pages of notes, side documents and definitions. But, eventually, there was peace in our time, effective from January 1, 2010.

Despite all the to-ing and fro-ing, impeccable sources advise there exists absolutely no free-to-air clause in the current Concorde, with another suggesting both Ecclestone and the teams realised the clause was so porous that a sideways F1 car could power through it at breakneck speed without touching its sides. Yet another stated it was just quietly dropped and its demise never questioned, particularly as the teams' had far larger fish to fry, such as an overhaul of the Concorde's governance provisions and a doubling of revenue income. Against those issues a virtually redundant clause, particularly one where the team's stood to gain proportionately from any inherent increase in revenues, was small beer.

Since the latest agreement, the landscape has changed further: Sauber's successful Club1 concept, based on a club of partners who have no wish to even be seen, but instead receive a menu of benefits based on below-the-line activities. Across at Ferrari, Marboro's barcode is no longer visible, with the marketing thrust of F1's biggest sponsor being aimed at trade outlets. Of the mainstream seven car companies previously in F1, only one – Mercedes – remains totally committed to F1. Even Renault has turned its involvement into a profit centre via a customer engine programme.

Talking of which, the purchaser of the French company's team is an investment house very effectively using the operation as a business-to-business platform, with such B2B activities playing ever increasing roles in sponsorship acquisition. Sir Jackie Stewart was recently appointed Business Ambassador for owner Genii Capital – proving further that the need for free-to-air TV is diminishing by the season, with the medium's primary benefit being not sponsor exposure, but revenue generator.

Against this background there are mounting rumours that CVC wishes to sell its F1 investment, having creamed profits for the past four years. That Abu Dhabi's wealth fund is a potential punter is known to this column, while late last week a report was published by Sky's business editor that Newscorp, the world's largest electronic and print media outlet by a massive margin and owner of the subscription TV channel, was investigating the purchase of F1's CRH lease. The report said that the deal could possibly be in conjunction with Mexican media mogul Carlos Slim (the world's richest man) and an unnamed car company.

Then, on Sunday, Britain's Sunday Times (a Newscorp title) devoted a two-page feature – authored by no less than four top business journalists – to the subject. So, the stories might have legs, at least...

But, what would Newscorp (and Slim) stand to gain from such an acquisition? The group is already heavily involved with F1 broadcasts via Sky in Germany and various Fox stations in North and South America and elsewhere, while the group's internet sites and news outlets could heavily punt the sport.

Mexican Slim, mentor of Sauber driver Sergio Perez, too, could benefit enormously, particularly via his Central and South American telecoms network and the convergence of media across the region, while the unnamed manufacturer (likely Ferrari or Mercedes, although VW cannot be discounted as the German group, well on its way to becoming the world's number one, is toying with entry into F1 and would certainly like a voice proportionate to its stature) stands to gain financially and politically.

Meanwhile, back in Paris, the FIA is agitating for increased revenues from the lease, for, as exclusively disclosed by this column almost a year ago, the FIA's office bearers, who swept into power on the back of Mosley's departure, consider the FIA to have been somewhat short-changed by the 113-year lease, and have already indicated they intend renegotiating aspects of the deal. The FIA holds a right of veto over any change of ownership (the 'Don King Clause'), and would no doubt be rather inclined to approve a transaction which favours F1's ultimate owner.

So, after all that, how likely is it Newscorp will – either alone or via a joint venture – buy into Formula 1's commercial rights in the short term? While some in the paddock have rejected the idea out of hand, this column's sources, most of whom have in-depth knowledge of Concorde and Newscorp, take a more pragmatic view: They place the odds at 60/40 in favour.