Formula One boss Bernie Ecclestone is a polarising figure in the eyes of many. A powerful negotiator and master dealmaker, he has built Formula One into a multibillion-dollar global operation, having identified early on the potential of television to turn the sports property into a worldwide spectacle. In the process he has made billions from his management and ownership of the commercial activities, and earned both fear and respect from admirers and detractors alike.
At 84, however, Ecclestone is under assault on several fronts. The futures of two teams—Caterham and Marussia—hang in the balance. Pressure is mounting for a new strategy to tackle Formula One issues, from the spiralling costs and declining television audiences to falling sponsorships figures. Ecclestone, who has fought bribery allegations in London and Munich, has lived through many of the sport’s ups and downs.
Our first interview takes place at the Singapore Grand Prix, where he had just signed a seven-year deal with Fox Sports. A few weeks later we meet in London at Formula One Management’s offices. He reflects on the need to build Formula One into an entertainment property, the trends in sponsorships and why he won’t take to social media.
What does the Formula One brand stand for?
That’s a difficult question to answer. I suppose it is a major sport and most sports are in the entertainment business. Sometimes we tend to lose track of the entertainment and get caught up a bit more on the technical aspect of Formula One, which I’m not happy about. We are very technical and we need to stay that way but I’d rather see a bit more effort on the entertainment. That normally balances itself. And it will because we’ve just gone through a particular phase, so when we’ve worked that out, we’ll be back to where we were. Obviously for people involved in Formula One for marketing we have a worldwide audience and an audience in the right bracket for people that are perhaps what you might call up-market. We’re different to the football crowd, if you like. I’m not saying there’s anything wrong with that market at all. Quite the opposite: the football audience is a super market but I think they’re a different type of viewer.
How can you bring more of the entertainment factor into Formula One?
Bernie Ecclestone: Entertainment is what people want to see. If you asked me tonight to go to the ballet and said it’s fantastic, I would say, it’s not for me. Sure, it’s good entertainment for a lot of people but it doesn’t suit me. If I asked people who like ballet if they wanted to go to a Formula One race, they wouldn’t particularly want to go. We don’t know what people like and don’t like. Maybe if I tried it, I’d love ballet. I just can’t understand the reason why they have these girls dancing on their toes. Why don’t they get taller girls? It would be so much easier. Today, there are so many forms of entertainment. I may be speaking against us, but previously the amount of entertainment was limited. There were fewer TV channels. People didn’t have much choice and now they’ve got plenty of it. So there’s generally a lot of competition.
What is the trend in sponsorship that you’ve seen in recent years?
There are so many places that brands can put their money in for sponsorship. Why is that? Because there are lots more sports on television these days. They may not be on the premier channels and not with big audiences, but they’re there. Some brands, I believe, take the wrong approach. They spend little amounts in a lot of different places that don’t deliver much [return on investment]. We get massive audiences worldwide every couple of weeks; the Olympics in comparison is every four years and the World Cup is the same. So I don’t think people really research where they can spend their money and what results they get.
How much do the teams depend on sponsorship?
Quite a lot, although it varies by team. So, for the large, successful teams it is probably 50 per cent of their budget, and the teams at the bottom of the grid need 70 or 80 per cent.
How much does F1 need sponsors, versus broadcasting rights or race fees?
It’s not life and death for us. The income comes from promoters that run races, and have to be there to provide a service for the show or the television. Sponsors are there and, of course, if all the sponsors stopped it would hurt us financially but it wouldn’t cause as much damage as it would for a race team because we could cut our costs.
What does a major brand such as Rolex get for its Formula One sponsorship that other sports properties can’t offer?
They get worldwide coverage, and association with a premier sport. If you’re sponsoring the Olympics you’ve got to wait a long time for these things to come back. I believe the big sponsors want to be able to offer their clients some form of entertainment, an experience that money can’t buy. So, they get the use of the Paddock Club, which is just a little bit up-market, and if they sponsor us or one of the teams they can meet the drivers and it’s all a bit special. In terms of advertising budgets, I don’t know whether this is considered luxury spend. But if I put a new brand out there today, people worldwide will see that brand and be talking and writing about it. Rolex do a very good job activating their sponsorship. Red Bull does a truly super job. We’ve got Singapore Airlines as a sponsor, as well as UBS and Emirates that do well with their sponsorships.
What’s the secret to Red Bull’s marketing success?
They have a person that owns the company, who is a super marketing guy [Dietrich Mateschitz]. He got into Formula One, and built on the idea of using it as a marketing tool and he’s done fantastic job with it. In the end you can say because he had the courage to choose the right people that he had a four times world champion. Obviously that made his marketing easier but in the meantime he would have still been successful because he markets all the other things he’s involved in. He keeps his brand in front of the public all the time. He’s very good and very courageous at doing what he does. He picks the right things to do.
Could Formula One benefit from marketing itself more?
What could we say to people? It’s pretty obvious what we produce and what we do. Either people like it and buy or don’t like it. I’ve had a lot of criticism lately because the television audience has declined. We have seen that decline in nearly all sports. Have the viewers declined? I doubt it. The viewership is just spread in different areas because today people can watch on these iPads or on even telephones. And it’s only now that we’re catching up and finding out that if we lose 10 per cent of our free-to-air television audience how much we might have picked up elsewhere as more people watch Formula One through other means.
How can Formula One widen its reach (beyond television) to expand its audience base?
I’m not interested in tweeting, Facebook and whatever this nonsense is. I tried to find out but in any case I’m too old-fashioned. I couldn’t see any value in it. And, I don’t know what the so-called ‘young generation’ of today really wants. What is it? You ask a 15 or 16-year-old kid, ‘What do you want?’ and they don’t know. The challenge is getting the audience in the first place. I say to some of these people who start this nonsense about social media, look at what tobacco companies tried to do—get people smoking their brand early on because then people continue smoking their brand forever.
Do you believe there is no value in reaching this young audience?
If you have a brand that you want to put in front of a few hundred million people, I can do that easily for you on television. Now, you’re telling me I need to find a channel to get this 15-year-old to watch Formula One because somebody wants to put out a new brand in front of them? They are not going to be interested in the slightest bit. Young kids will see the Rolex brand, but are they going to go and buy one? They can’t afford it. Or our other sponsor, UBS—these kids don’t care about banking. They haven’t got enough money to put in the bloody banks anyway. That’s what I think. I don’t know why people want to get to the so-called ‘young generation’. Why do they want to do that? Is it to sell them something? Most of these kids haven’t got any money. I’d rather get to the 70-year-old guy who’s got plenty of cash. So, there’s no point trying to reach these kids because they won’t buy any of the products here and if marketers are aiming at this audience, then maybe they should advertise with Disney.
But can’t social media help you build or amplify fan engagement?
How are you going to get all the fans to meet these drivers, who don’t even want to meet their girlfriends? You’re right that we should use social media to promote Formula One. I just don’t know how. They say the kids watch things on [tablets and phones], but it doesn’t mean they’re watching Formula One. And even if they are today, will they still watch it when they are 40? The world has changed so much in the last few years, and I doubt that’s going to stop. But with all the technology out there are limits to what we can do and the amount of time people can watch something. So, I’m not a great supporter of social media and I think we’ll find that a number of things will happen. Very shortly these companies like Twitter will be charging for anything that’s put on there that looks vaguely commercial. Otherwise they can’t stay in business. Their shares have suddenly dropped 10 per cent this week, and it’s because people aren’t using Twitter as much.
What drives you? What do you say to the critics?
I run the business from day to day. I get up in the morning and I really don’t know what’s going to happen; I’m a firefighter. When the fires start, I have to put them out and we’re always having fires. I don’t say anything to these people because the majority of them don’t have the slightest idea what they’re talking about. They have to fill the columns of a newspaper and if what they write happens to be true it’s more by luck than anything else. They make up stories that they think the public wants to read, and nobody wants to read good news. Everybody in their life has got a problem so they’re so happy when other people have got problems. Good news never sells. The answer is stay away.
I had a book written about me called No Angel, which apparently sold very well in a lot of languages. This guy, Tom Bower, has buried a lot of very important people, from politicians to business leaders. I asked to speak to him before he started writing and I said: ‘I’m not going to try and persuade you to write anything except the truth but I will tell you one thing I’m no angel.’ He took that as the title of his book, and he bothered to find out the facts. But he had an easy job. I’ll tell you why: I’m really an angel.
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