In Formula One, a grip not easily loosened

The command center of the shimmering, multibillion-dollar road show that is Formula One Grand Prix racing is an unobtrusive, gray-walled motor home known colloquially as the Kremlin.

Named for the iron-fisted rule dispensed from its bland leather sofas, the Kremlin sits parked at the heart of a crowded paddock that is the base for teams like Red Bull, Ferrari, Lotus, Mercedes and McLaren. It can be easy to miss amid the gourmet restaurants and wine-stocked bars of the teams' palatial hospitality centers, but none in the paddock dispute that the Kremlin and its elusive tenant - the 82-year-old Englishman Bernie Ecclestone - remain the nerve center of racing's Billionaires Row.

A former driver in feeder series for Formula One and Grand Prix team owner, Ecclestone has wielded unfettered control over Formula One for decades. His power was entrenched by a controversial deal in the late 1990s under which the sport's governing body assigned him ownership of the Formula One commercial rights for 100 years for a small fraction of what investment analysts said they were worth. Selling the rights on to outside investors, then rolling them over again, has helped Ecclestone amass a family fortune Forbes magazine has estimated at $3.8 billion.

Ecclestone has said that he is more interested in power than money - he summers on a Mediterranean yacht and winters in Gstaad, Switzerland, but his wealth is largely conspicuous only because of the multimillion-dollar, gossip-magazine lifestyles of his two 20-something, real-estate-collecting daughters. But few sporting entrepreneurs can match his authority. His powers include divvying up Formula One's $1.5 billion a year in earnings between the racing teams and the sport's current owner, a London-based private equity company, CVC Capital Partners, which bought a majority share in the commercial rights for a reported $2.5 billion in 2006.

He controls the lucrative broadcasting contracts that are Grand Prix racing's main earner, relaying races to more than 100 countries, and has the authority to designate - or, when it suits him, terminate - Grand Prix venues across Europe, Asia and South America, 19 of them in 2013, that pay up to $60 million each in race-hosting fees. Then there are the revenues yielded by the fleet of 747s that carry the race cars and cargos of team equipment to distant frontiers like Abu Dhabi, Shanghai and Singapore, and decisions about which companies can advertise on billboards around the tracks. Even the sale of paddock access at each race is part of Ecclestone's portfolio.

But now, the power of the remorseless, mop-haired, 5-foot-2-inch Bernie - as he is known to critics and loyalists alike - is under challenge as never before. The threat of a lengthy jail term has hung over him since German prosecutors charged him in the spring with bribery and embezzlement in the deal that swung control of the sport to CVC from a group of European banks that acquired them in a German media company's bankruptcy. And racing teams restive for a bigger chunk of the sport's revenues, as well as track owners struggling to break even on gate receipts alone, are also seeking to loosen his grip.

For months, hushed talk in the paddock has turned to how a new, more open and more financially equitable Formula One might look. Without far-reaching changes, including a system that retrieves a far larger share of future earnings than Ecclestone and CVC executives seem willing to concede, some team owners are questioning whether Formula One can survive if it remains an obdurate Ecclestone fief, enriching outside owners before ensuring the sport's viability.

An urgent priority, as many teams see it, is building up the sport in the world's richest market, the United States, where 40 years ago Formula One events at Watkins Glen, N.Y., ranked with the Indianapolis 500 among American racing's biggest draws. Transforming Formula One in America into a credible competitor among racing fans with NASCAR has been something that Ecclestone has been slow, even reluctant, to tackle, his critics say.

"Bernie feels he's been responsible for creating a multibillion enterprise out of Formula One, enabling many of the people involved to become very, very rich, so that they have no business challenging his autocracy," said Mark Hughes, the Grand Prix editor for the British magazine Autosport. "He feels he's been a benign dictator, but the teams say, 'Anything but benign.'"

Insiders attribute Ecclestone's dominance to the ruthlessness and chicanery - as some he has outwitted describe it - that he honed in his early 20s as a sidewalk trader of secondhand cars and motorcycles in the quick-buck back streets of postwar London. There, he rubbed shoulders with the London underworld, and counted among his friends the man who was jailed for his role as a getaway driver in Britain's most notorious postwar heist, the 1962 Great Train Robbery. It is a story he revels in recounting.

TRANSFORMING THE SPORT

Even among detractors, Ecclestone draws widespread respect for what he has achieved while transforming the sport into a personal bonanza: remaking Formula One into a much safer, globe-spanning, 220-mph showcase for motor racing's most advanced technologies from the greasy-overalls, cash-in-the-back-pocket, often-fatal endeavor of the 1950s, '60s and '70s. Then, drivers like Juan Manuel Fangio counted their winnings from Grand Prix races in a few thousands of dollars. Now top drivers earn as much as $50 million a year, and some team owners have grown similarly rich.

Front-running teams like Ferrari can earn $80 million a year, and more, from the revenues that remain after CVC and Ecclestone, still a minority owner of the commercial rights, take the lion's share. That helps defray operating costs that dwarf those in NASCAR; in the case of Ferrari, which has 650 people working for its Grand Prix team, these run to about $400 million a year.

But in interviews at this summer's races in Silverstone, in England, and at Spa-Francorchamps, the superfast rack that hosts the Belgian Grand Prix and Monza, site of the Italian Grand Prix, executives of many of the competing teams said they were struggling to avoid going under. One major team, Lotus, has acknowledged that it has been unable to pay the $20 million it owes its top driver, Kimi Raikkonen, on this year's contract. And other teams said they, too, were struggling to pay drivers and engine suppliers until the end-of-the-year Ecclestone payouts land.

TEAM LEADERS SPEAK OUT

Most powerful among Ecclestone's critics is Luca Cordero di Montezemolo, Ferrari's chairman. In an interview in September at the Ferrari headquarters in central Italy, di Montezemolo made it clear that he and other team owners had lost patience.

"There have been minuses and pluses, the cativo and the buono, as we say in Italian," he said, speaking of Ecclestone's reign. "The minus is that he made too much money, he sold out our business three or four times in the past 40 years, making all the time a lot of money for himself. Second, being all the time a one-man show. I think his job was sometimes very good. But having said that, sooner or later, he has to leave and do something else."

The head of the McLaren team, Martin Whitmarsh, spoke with similar concern in the paddock at Spa-Francorchamps. While crediting Ecclestone for using his "dictatorial style" to globalize the sport and swell its wealth, Whitmarsh said that the fear that one-man rule has generated had inhibited discussion of the sport's future.

"Nobody wants to talk about it openly, because it's disrespectful of Bernie and because we learned years ago that speaking disrespectfully of Bernie is not good for business," he said.

Whitmarsh emphasized the need for radical changes to a system that has allowed the "cash cow" of Formula One to be so skewed in favor of outside investors that only four of the 11 teams - Ferrari, McLaren, Mercedes and Red Bull - are now reliably solvent. He also criticized Ecclestone for dragging out negotiations on a planned race in New Jersey in June, one that would plant the Formula One flag in the shadow of the New York skyline.

The New Jersey race moved a step closer last week when Ecclestone approved its inclusion on a provisional list of 22 races for next year. But detailed negotiations on commercial rights could still derail the event.

"What we have to learn is that North America doesn't need us, so we have to have a degree of humility that we haven't needed in Europe and Asia," Whitmarsh said.

He pointed to the wide spectrum of sports, including the NASCAR and IndyCar series, available to U.S. television viewers, and he said the decision to abandon Watkins Glen in the 1970s and move the U.S. Grand Prix race from city to city - an Ecclestone initiative - had been a mistake. "Formula One lost its way in Detroit, Caesars Palace, Long Beach and Indianapolis," Whitmarsh said.

ANSWERING HIS CRITICS

In public, at least, Ecclestone has put a brave face on his travails. He had a reprieve of sorts in September when a Bavarian court announced it had delayed until next year a decision on whether to proceed with his bribery trial, and at Spa-Francorchamps, he interrupted a stroll through the paddock to usher a reporter into his motor home and open a 90-minute discussion of his problems.

"Well, what lies would you like?" he asked with an insouciance that has become his trademark in fending off impenitent journalists.

Asked whether he was troubled by the possibility of going to prison in the German case, he said he was unbothered. "The time to worry is when you have to worry," he said. Formula One in America? He pointed to the U.S. Grand Prix at Austin, Texas, which will have its second running Nov. 17 after a successful debut last year. And the teams' complaints that he has taken too much money from the sport, leaving its finances in perilous state? "Very few of them are business people," he said of the team owners. "They spend too much. It's as simple as that."

Formula One, he said, could never be run "democratically" because of the anarchic nature of the rival teams. He launched into an encomium about the "dictators" and autocrats he had met and admired while traveling the world in pursuit of new venues. These included the former Italian prime minister, Silvio Berlusconi, and Leonid I. Brezhnev, the longtime leader of the Soviet Union during the Cold War, as well as Vladimir Putin, the current Russian leader, with whom Ecclestone negotiated for a Grand Prix to be held next year at the Olympic city of Sochi.

"A super guy," Ecclestone said of Putin, inside the comfort of his own Kremlin. "Could do with him in every country."

© 2013, The New York Times News Service