Bernie Ecclestone: Fast money

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Welcome to Good Bad Billionaire.

Every episode, we pick a billionaire and we find out how they made their money.

Then we judge them.

Are they good, bad, or just another billionaire?

I'm Singh Singh and I'm a journalist, author and podcaster.

And I'm Simon Jack and I'm the BBC's business editor.

In this episode, we are talking about a man with a need for speed.

Yeah, a wheeler dealer around the fastest wheels perhaps in the world, Bernie Eccleston, who made Formula One into a one-man empire.

Now, I have to admit, I have actually never really watched Formula One, but I know that it is a huge industry.

The business of carting around cars, engines, huge teams of engineers all around the world is a massive enterprise.

And Bernie Eccleston was the person who made it into one of the biggest sporting empires in the world.

In fact, today I think it's valued at around £13 billion.

And that's with Formula One Grand Prix competitions all over the world.

And the person who steered it to that position was Bernie, who basically had an almost an iron grip on this entire sport in a way that I can't think that any other individual controls a sport like that.

No, because you've got, you know, Premier League owners, but you know, they own like a single club.

They don't own the whole thing.

Yeah, he owned the commercial rights, the TV rights to Formula One in its biggest growth phase, and that made him a very rich man.

In 2001, Bernie himself was the third richest man in the UK with £3 billion.

Admittedly, in the year 2023, they were down several notches, so Bernie and his his family went all the way down to number 73 with a poultry £2.5 billion.

That may have been because he had one of the biggest tax bills in history.

We'll get to that in time.

But while he was on top, he spent very lavishly.

Yeah, I mean, you wouldn't be surprised to hear that for someone who basically ran Formula One, he had over 100 race cars in his collection.

That is one car park I would like to see.

Yeah, private jets, super yachts, luxury hotels, homes in the UK and Switzerland, an £8 million coffee plantation in Brazil that's bigger than Monaco.

He also had a bath made from marble from the same quarry as the Taj Mahal.

And he was famously quite a, he spoilt his children rotten.

Tamara Eccleston became the kind of poster child for having a rich daddy who gave her anything.

A spoil, wild child.

But he had a few scrapes with the taxman and the law.

At the end of last year, he was convicted of fraud and sentenced to 17 months in jail, although that was suspended for two years.

And he also agreed to pay almost £653 million back to HMRC, the UK tax authorities.

That made him the second biggest taxpayer in that year in the country.

So he's powerful and he's rich, but this is a story that is not going to end well.

So just listen to his 2008 clip.

It's of Bernie Eccleston talking to Nikki Campbell at the BBC.

He's being asked about the racist abuse that Louis Hamilton faced at a Grand Prix.

I think that's all nonsense.

I mean, I don't think it's anything to do with racism.

No, no, I think some of them had wigs and they were blacked up and stuff like that.

And if it happened in this country, there was a few people in Spain.

I mean,

and that was probably taken its beginning as a joke rather than anything as abusive.

People entitled to support who they want to support.

But without insulting somebody, surely.

Well, I don't see when was he insulted?

When they're putting on the wigs and the, you know, all that stuff.

And, you know, I know it was a few people.

It was a minority.

But a lot of people were very uncomfortable with it.

Well, I don't see what they should have been.

Do you remember the Ferrari guys all wore the red wig somewhere for some

when they won?

mean, these things, these are

people expressing themselves.

It's a view.

It's a view.

It's a view.

It's certainly a view.

Oh, God.

He tends to get in trouble when he expresses himself, as we'll see.

He's sort of said that Vladimir Putin was a first-class guy and he'd take a bullet for him.

Oh, God.

I mean, he's a man who, if you give him a shovel, he'll just keep digging, as you can hear in that sound clip.

With that thought in mind, let's go right back to the beginning.

Bernie Eccleston started life modestly.

He was born in rural Suffolk in 1930.

I'm surprised by how old he is, actually.

He's well into his 90s.

Yeah, and he's still going.

His dad was a fisherman-turned crane driver.

His mum was a housewife, and he grew up in pretty humble circumstances.

Yeah, no running water in his first home, but the family then moved to Kent when he was eight, and that was just as World War II was getting underway.

There's a great story about how Bernie Eccleston didn't grow up with very much.

So apparently at Christmas, his family didn't buy presents and he didn't have a party until he was eight.

At which point, when they did throw him one, he apparently ran away because he was terrified.

But he was also thinking about working for himself from a really young age.

He said he wanted to earn his own money because he knew he didn't have it anyway.

Yeah, he did a couple of paper rounds before school.

He bought cakes just from a bakery and sold it on for a profit.

Not the first billionaire we've come across who had a paper round and would buy stuff and sell it on.

We've had a few of them.

It's actually quite ironic that so many of the billionaires we've talked about are responsible for decimating the media industry because there's not going to be very many paper rounds for the next generation of billionaires to grow up doing.

Well, he used his earnings to buy a bike.

He and his friend would cycle to the American GI camps and deliver messages to their local girlfriends.

And one of his friends actually said, don't do too much bargaining with Bernard.

He always gets the better of the deal.

So even from a young age, he had a punch offered wheeler dealering.

And I don't think we can go much further before we say that there's one thing you will notice about Bernie Eccleson is that he is short.

And when he was bullied for being small, nicknamed Titch, Bernie said, small people have to fight to survive.

I've learned to fight the battles.

I had a good chance of winning or I'd run.

And when we're talking small, he's reportedly, I think, five foot three.

Yeah.

But anyway, he's entrepreneurial.

We know that.

And he's about to find the thing that would be his real passion.

So studying at Woolwich Polytechnic, a fellow student introduced Bernie to racing motorbikes.

He actually left left school at 16 and his first proper job at the gas board, he would actually just spend searching the classifieds to buy motorbike parts to sell on for a profit.

Yeah, and that sideline apparently earned him more than his day job at the gas board.

So he convinced the owner of a motorcycle shop to hire him at just 17 years old.

And he clearly had a gift of the gap because then he went on to convince a car showroom in Bexley Heath, just outside of London, called Compton and Fuller to rent him part of their forecourt to sell motorbikes for a cut of the profits of course, obviously.

Yeah, and soon he was out selling that car business.

After three years of working, aged only 21, he bought out the Fuller's share of that.

So Compton and Fuller then becomes Compton and Eccleston.

So at the age of 21, he's already got his own business up and running.

But we kind of need to rewind to understand a little bit about the car industry at this point, because remember, we're talking about post-World War II Britain.

Yeah, so new cars were very hard to come by.

The second-hand car market was basically the car market.

and it was full of wheeler dealer types that the the word that some of them used at the time was spibs they would give them fast talking sharp elbowed well-dressed people who are sort of sitting slickering around and doing a bit of wheeler dealing It's funny because this is the exact same period that one of our other billionaires, Chuck Feeney, was also doing quite a bit of wheeler dealering

on military ships.

Yeah, then that post-war environment where things were hard to come by.

If you could get access to stuff, you could sell it on for a profit.

There were margins margins to be made in some of those businesses you just have this image of all these kind of post-war guys carrying around enormous suitcases springing open to show you watches and things like that yeah he's learned his trade in this world and he he once said you dealt with what I call proper people we dealt with cash you learned to keep on your toes and you honoured a handshake so when he's asked about how he actually made his money early on at this point in his career he often says he made it through quote-unquote property yeah but he doesn't go into much detail about that obviously rumours of shady deals we can't substantiate any of those, but it seems he did make money on houses, buying car dealerships, buying up parcels of land.

In 1951, he's on record as buying a derelict industrial plot in Greenwich.

And it's around this time he gets engaged to his first wife, Ivy Bamford.

Then he bought his business partner, remember, Compton and Eccleston.

He bought Fred's detached, semi-detached house for a thousand pounds and gave it as a gift to his fiancée, Ivy Bamford.

A few years later, by the way, he re-gifts that house to his own parents as the couple are moving up the property ladder, shall we say?

And then moving up in the world, because at age 25, Bernie buys out Fred completely from Compton and Eccleston and becomes the sole owner of the car dealership.

Meanwhile, he's transferring his love from motorcycles to racing cars, and he had his first race in 1949, racing Formula 3.

And there are three main formulas in racing.

There's Formula 3, Formula 2, Formula 1.

But it's worth going back just a little bit to look at the structure of the sport because because this is the thing that Bernie comes to dominate.

You have something called the Fédération Internationale de l'Automobile or the FIA which is the governing body of Formula One.

Established at the beginning of the 20th century to represent the interest of motoring and it became that governing body for many of those auto racing events.

They're the ones who established these new categories of Formula One, Formula Two, Formula Three.

Pretty technical but basically as you go down in formulas from three to one, the cars get more powerful.

And presumably the prestige level and prize money goes up.

Oh, yeah, massively.

I mean, Formula One is a different world to Formula 2.

It's so interesting to think there's a parallel universe where Bernie Equiston was a driver rather than the supremo of your Formula One.

That's interesting because one of the most famous racing team bosses, Toto Wolf, he also started out in that before going into the business side because it's dangerous because disaster struck early on in Bernie's racing career.

He had several accidents, so he retired from racing to focus on the business side of things.

So at age 26 he made friends of a driver called stuart lewis evans and began managing him and quite sweetly you know bernie would take care of his diet he would even organize regular supplies of milk because stewart had a stomach ulcer he would accompany him to the races yeah and they had some success by the late 50s stewart was racing formula one and bernie was thinking about starting his own racing team but in 1958 at the moroccan grand prix something really quite tragic happens yeah stuart's engines locked on a fast bend, the car spun off, the tail hit something, the petrol tank ripped open, and the car caught fire.

He escaped the car, but he was literally, his overalls were on fire.

His burns were terrible and he was taken to the hospital, but the doctors told Bernie that they were so severe that he wouldn't survive and he passed away.

Yeah, he did age 28.

It's worth looking back on this because I just about remember the era of Formula One when it was still really quite dangerous and people died quite often.

The most famous casualty of all time is Ayton Senner because he was a god of the racing world, but there were plenty of others, and some of which we'll talk about.

But it was in a post-war era where many people had actually died in the war.

And I think that there was a different risk tolerance and risk appetite back then.

Today, it's a much safer environment.

And actually, Bernie and his old mucker, Max Mosley, who will come into this picture quite soon, are credited with making it a much safer sport.

And fatalities are incredibly rare now.

So, fire-resistant suits, for instance, they were introduced in 1975.

You know, know, there's pit lane speed limits, padded headrests, the safety car, all these things were introduced.

Yeah.

So now we come to a point where his best friend, the driver he was managing, has passed away in really tragic circumstances.

And this actually kind of propels Bernie Eccleston out of the sport.

He cuts ties and decides to focus back on his car dealership, which is booming by the 60s.

Yeah, because we've come out of that post-war period.

We're in that 60s boom.

So not just second-hand cars, he's now selling the latest models, the sports cars that were now desired by middle classes who are, you know, the swinging 60s, had a bit more cash to spend and wanted to spend it.

And he's got the showroom to match.

He's got this glitzy, modern showroom on Bexley Heath Broadway.

It's all white, gleaming tiles, big windows.

Apparently, Bernie's dad himself would meet and greet people when they came in.

And his customers would show business names from the swinging 60s.

In fact, I have a story about this.

As he's making his way

around the kind of West End car dealing world,

he used to go to casinos and hang out with all the kind of cool people in the 60s at that time, people like Adam Faith, Twiggy, and I have to say my late father-in-law, who's the composer John Barry, and his then wife had a bet with him at a casino in the West End.

Wow.

And she ended up winning.

And rather than pay her the money, he found her a pale blue Triumph Herald, quite a desirable car at that time.

And she drove that for the next five years.

So if you've got the scene, it's kind of like all these kind of trendy people hanging out together.

But there was still some sharp dealing going on.

There was one story where a customer pulled a gun on him to force a sale.

Bernie coolly talked him down and then he said he became a very good customer from then on.

So he's got the gift of the gab for sure.

But it's also during the swinging 60s that Bernie has his first run-in with the tax authorities.

Yeah, he bought a company which owed £9,700 to the inland revenue.

So he said, I've just bought this company.

I'll pay you a third of the bill.

But he was told, you don't understand.

You have to pay the whole fine.

And Bernie offers to pay even less because he assumes the debt will be forgotten about.

Yeah, but then 10 years later, that's why I say to anyone, never mess with the tax man.

It always comes back to get you.

10 years later, he finds himself back in the High Court, told he broke company law and had to pay a large fine.

So remember that moment because that's going to come back in this story a bit later.

So it's a swinging 60s, business is booming, people are driving fast cars all over London.

and Bernie just couldn't keep himself away from the racetrack.

Yeah, so he started managing the German driver and a friend of his called Jochen Rind,

but I'm afraid tragedy struck again.

Rind died during practice for the 1970 Italian Grand Prix, so another tragic moment.

Bernie was obviously devastated about his friend's death, but this time he actually stayed in the sport.

And in 1971, he bought a team called Brabham for £100,000, which is quite a lot of money in those days.

It was.

And he actually said, buying Brabham, he said, was like having all my birthdays at the same time.

I couldn't get the feeling of racing out of my blood.

I just loved it.

But it's worth noting that Bernie didn't kind of treat this as a Playboy's toy.

He actually kind of focused his business mind on trying to sort the team out.

Yeah, back in the 70s, it was a sort of pastime for

rich, looshe kind of characters.

It was sort of glamorous, kind of dangerous.

If you can put it this way, at the end of the race, you'd have the winner with a shock of kind of cool hair, a bottle of champagne, some scantily clad female either side giving him kisses on both cheeks.

That was the kind of vibe that was going on then.

It's not exactly respectable, world-class sport, let's put it that way.

Exactly so.

But actually, Bernie got to work trying to change the image of the sport.

And so he applied the same micromanaging techniques, the kind of fastidious he bought to his car business.

He said, I wanted to get everyone a bit more tidy with how they dress so things look more business-wise.

You can imagine how some people on the team might have taken that.

But it was also an expensive endeavour, right?

So he bought the team for 100k, but the annual costs of just running it were 80k, and they were eating quite substantially into his fortune.

In fact, all the British teams known as the Constructors, you still hear about the Constructors Championship, were close to bankruptcy back then because the running costs were so high and the earnings and the winnings were so low.

Bernie, however, managed to get hold of a balance sheet that showed that the the British teams were only paid $10,000 per race, but the circuits themselves could actually afford to pay them $100,000.

So they were being shortchanged quite massively.

Massively underpaid.

So Bernie got to work on that.

He negotiated on behalf of all 10 teams for a fee, of course.

There's the fees being remembered variously as either was it 2%?

Was it 4%?

Was it 7%?

But we can be pretty sure Bernie got a commission and he was solely in charge of negotiating.

So he's the only person who's gotten paid for doing that deal.

Yeah.

And in 1975, for example, he demanded an extra $350,000 from the US and Canadian Grand Prix circuits.

And when Canada refused, he cancelled the Canadian Grand Prix.

So the Canadians paid the extra money and the Canadian Grand Prix returned the next year.

So clearly, Bernie Eccleston likes to gamble, right?

It's quite something to threaten to cancel a Grand Prix.

Also, I think that at this point, he's operating well beyond his official brief, to be honest.

He's negotiating on behalf of all teams and taking decisions you can imagine some of those people from the 10 teams he negotiated for were like who appointed this guy who put this guy in charge i'm sorry but who is he you're not afraid to take charge and i think that's the interesting thing here he's got a natural instinct saying i'll deal with this leave it to me and that's eventually how he sort of rises to the very top so he's figured out a way to make money and profit from formula one which is useful because car sales are slowing down yeah the introduction of vat VAT, which happened in 1973, I never knew that before I started studying this.

I thought VAT had been around for as long as I've been alive, but it hadn't.

VAT is just the UK version of a sales tax.

And that made cash deals difficult.

And for Bernie, who liked to do stuff in cash and not necessarily in full view of the tax man, this made life difficult.

He actually said, I'm retiring.

I don't want to be a tax collector for the government.

I'm going to travel the world with Brabham.

It's quite interesting how he views paying taxes as being a tax collector for the government.

So at this point he's quit the car trade.

He's no longer a secondhand or brand new car salesman.

He's devoting his focus entirely to Formula One.

And he goes all in.

So you were talking about how he likes to wade in there and take charge sometimes beyond his actual official remit.

Okay, well in 1974 the Belgian Grand Prix was in disarray financially.

It looked like it was about to be cancelled.

So Bernie walked straight in and just took charge of the situation.

Yeah, he got sponsors to cover most of the costs.

He had to cover some of the costs personally.

He put an extra car in the race and encouraged a record 31 cars to start that race to attract more fans.

And this expensive gamble paid off because 70,000 people bought tickets, which brought money in, and Bernie made a large profit personally.

Yeah, and that set a bit of a template for him, taking control and profits at a Formula One.

So he may have been a millionaire earlier from his car business and property business, but it's safe to say that at this point, Bernie Eccleston in the mid-1970s is a millionaire.

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Hi, my name's Eddie Hearn and this is No Passion, No Appointment.

I'm excited to be back with this new series.

As always, I'll be talking to top performers about what drives them, how they gain an edge over competitors, and whether their dedication to constant improvement comes at a cost.

I love golf.

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What makes them feel fulfilled?

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And does that change as their career progresses?

Just a girl who grew up playing football and now I'm getting packs like without even seeing the camera, like it's crazy.

From BBC Radio 5 Live.

No passion, no point.

Listen whenever you like on BBC Sounds.

So from a million to a billion, this is the story about how he wrests control of an entire sport.

And it starts out as a battle for control between two different governing bodies.

So you could call this the FISA-FOCA war.

Yeah, FOCA was the Formula One Constructors Association, FOCA, and FISA was basically a division of the FIA, that French organisation which was the governing body.

In 1978, Bernie became the chief executive of FOCA and Max Mosley, who's a son of Sir Oswald Mosley, the former leader of the British Union of Fascists.

Max was his legal advisor.

And these two are

a very important double act.

Max Mosley died not long ago.

But Bernie Eggleston and the late Max Mosley were like twins in a way, but came from very different backgrounds.

Max Mosley was quite a posh.

Bernie was from a very modest, but the two of them had a really strong relationship and good understanding.

And between them, they managed to wrest control.

But the path there is not straightforward.

So Folker represented teams led by private owners like Bernie rather than car manufacturer-owned teams like, for instance, Ferrari.

Yeah, and on the other side of the battle was FISA, part of, as I say, the FIA.

That was led by a Frenchman called Jean-Marie Belestre.

So at this point, no one really owned Formula One.

You know, both sides had some amount of power, and obviously they wanted more for themselves.

Yeah, Belestre, FISA, he had things like the power to change technical regulations, which is enormously important because if you just suddenly, the car has to be this long, you can't have this little bit on it, it has to be this weight, that can have a massive bearing on which team's going to win because it can, you know, it can put some teams off balance if they have to change the technical specifications of their car at short notice.

Meanwhile, Bernie would ask his teams to boycott races and that culminated in the 1982 San Marino Grand Prix.

Only 14 cars ended up entering.

That was half the normal entry.

So in a way, he could take his ball and walk off the pitch, if you like, in protest of what was going on.

So a real battle going on.

It's insane to think of Formula One at at one point being so disorganized that you could have these two warring factions essentially determining the outcome of all these different races around the world.

Yeah, and two very different characters here.

Bernie on the one side, described as brisk, neat, understated, astute, and with ruthless moves below the radar, compared to Belestre, volcanic, illogical, theatrical, vain, enraptured to the sound of his own oratory, but fighting for what he believed was right.

So chalk and cheese.

Yeah, you could almost imagine the biopic now.

Yeah, exactly.

In fact, Balestra said of his, of Bernie and his friend's tactics, you're just little men, which probably didn't go down very well with the 5'3 Bernie.

Little men playing with toys, making cars and garages.

Who do you think you are?

You don't own motorsport.

Your group are just a bunch of nobodies living off the back of the sport.

So amid all these words thrown around, the battle actually ended with both sides signing up to what is called the Concord Agreement.

And while it seemed that both sides, you know, made compromises in certain agreements, it's generally viewed that Bernie ultimately won this fight because FISA agreed to equally distribute the funds that it made from Formula One.

But Bernie had an insight.

He believed that with the growth of television, it will be TV rights going to be the key to the profits in this sport.

And there was actually a clause in the Concorde agreement that Belestra failed to notice because it essentially assigned all of Formula One's TV rights for four years to FOCA, i.e., to Bernie.

And Bernie gave 47% of the TV revenues to the teams, 30% to the FIA, the other half of this battle, and took 23% for FOCA, i.e., himself personally.

And in return, he agreed to put up the prize money himself because, you know, Grand Prix, remember, means grand prize, and that grand prize came courtesy of Bernie.

And this is a time when it was getting quite glamorous.

Formula One, there was this huge, certainly in the UK, I remember this.

I was six years old at the time.

I can just dimly remember that James Hunt, he was a sort of slightly shaggy, blonde-haired, handsome dude, up against Nikki Lauder, the kind of clipped technocratic Austrian and this became a real kind of like any great sport like Federer versus Nadal or McEnroe versus Borg or those rivalries are the thing that really sell the sport and this was really burgeoning so people were paying attention.

And it's a famous rivalry that actually ended up inspiring a film called Rush which is also very good if you want to get an insight into what Formula One was like at the time.

That's right.

And given with this new growing TV audience, things like advertising at the the tracks, because it's been televised, becomes more important.

He tried to up the game on that.

He wanted to make it more like Wimbledon.

He wanted to elevate Formula One's image, but also make a big profit.

He also wanted to encourage, you know, glitz and glamour.

He was focusing on hospitality.

Before the mid-80s, you know, you had friends, family, journalists welcome in the hospitality areas.

Bernie thought this was a big no-no.

He also monitored the guest list and excluded anyone he didn't like.

Yeah, it's just one of the kind of rites of passage of any sort of movie star passing through a Grand Prix, you'll always see like a Brad Pitt on the pit lane hanging around the cars, looking like they don't really know what to do with themselves, but they're kind of convinced that this is where they should be.

Yeah, and also don't forget all the dictators and despots because there are quite a few pictures of Bernie Eccleston hanging out with Vladimir Putin, as we'll see later on.

And in fact, for a lot of countries, getting a Formula One Grand Prix was a kind of place-making, sports-washing kind of event.

It legitimised his regime, you know, that has been used in that way before.

So, his changes to Formula One created a lot of personal profit for Bernie, but he fed the money back into the sport.

Yeah, teams had more money to spend on cutting-edge technology, it made the sport more appealing to watch.

And I think it's worth saying at this point for UK audiences that Formula One, although it goes all over the world, most of the teams and most of the engineering and all that stuff happens in a kind of stretch of the M40 going from London to Oxford, where you have this kind of combination of automotive, aerospace, technical engineering, excellence, which actually is the beating heart of the sport.

And a lot of those technological developments sort of spawn other developments in engineering.

And so they filter into other things we do in normal cars as well.

So even though this is a story about sport, it's actually also a story about technological innovation.

Just we don't tend to kind of see it as a tech story.

That's right.

And umpteen kind of rule changes.

For example, they tried to make it a little bit greener.

A lot of people say it's a monstrous sport in the sense that you are burning petrol at 13,000 revolutions per minute going around in cars which are a thousand horsepower doing 230 miles an hour.

That is about as off messages as you can get.

But in fact, Formula One was one of the first places.

You saw things like hybrid engines installed, lower carbon content in the fuels.

I'm not saying in any way it's green, but some of those engineering advances started here.

And one of the things that made Formula One so lucrative was the fact that as audiences grew, TV stations started paying more for the broadcast rights, which again gave more money to the sport.

So Bernie and Max Mosley, this double act, have got control of the Constructors Association.

They've got the TV rights for the next four years, but they've got their sights set on getting control of the other bit of the sport, which is the FIA.

So in the late 80s, they convinced their old opponent, John Murray, to actually hire Max Mosley as the president of the FIA's Manufacturers Commission and then hire Bernie as head of promotions.

So they're in, they've got a foothold at the FIA.

And once he was there, Bernie used his position to add more races, more money to Formula One.

He added things like the Australian Grand Prix, that's a big one these days.

And letting them in, it turns out, would be Jean-Marie Bellestee's downfall.

And in 1991, Max Mosley ousted him as president of the FIA and started doing some big reforms.

So Bernie's man is now in charge of the FIA.

And then without really fully understanding it at the time, the the teams agreed under Max Mosley to give full control to Bernie.

And Bernie, you know, holds its hands up and admits to it.

You know, he later said they signed away their rights in 1992.

Because there was a new Concorde agreement in that Bernie won in many ways.

First,

he increased his percentage of new television rights from 23 to 53% with the teams getting the other 47.

And secondly, he convinced the teams to transfer their rights from FOCA, the Federation of Constructors, to his newly created Formula One Management, which he owns.

Right, so he kind of told them, you know, nothing would change, it's just a kind of, you know, handover.

But FOCA was a kind of loose, non-legal group, whereas FOM, Formula One Management, was completely owned by Bernie and it made serious money.

In 1990, it had revenues of $12 million,

and just six years later, it had gone up to $127 million.

Yeah, and Bernie's salary at that time was $83 million, which would have made him, I think did make him the world's highest paid executive anywhere at that time.

So Bernie is riding high.

He is on top of the world.

He's kind of got everything he's wanted.

And his iron grip on this begins to get even tighter because Formula One management, FOM, Bernie's company, secures the commercial rights to Formula One for 14 years from 1997.

In return, he would give the teams and everyone else $10 million annually.

So he's paying them a fixed fee.

He's got all the rights now.

I mean, it's a terrible deal for them, but a great deal for Bernie because this gives him complete control of Formula One for the first time in the sports history.

He has officially established himself as the dictator of Formula One.

Then he strikes another deal with the FIA in 2000.

And this mind-boggling deal gave Bernie commercial rights over Formula One for 100 years.

And he paid $360 million for that, which sounds like a lot of money, but a hundred years?

I mean, he's not even going to be alive to see the end of the hundred years.

Yeah, Forbes put it, this was Bernie's best business move, and this was what, in their words, handed him the keys to the billionaire's club.

So he's on the precipice of becoming a billionaire, but there is trouble on the horizon because obviously people start noticing that one guy having complete ownership of a rapidly growing industry that's becoming very, very lucrative indeed, it's starting to raise some eyebrows.

Yeah.

And in 1999, it was announced there was going to be an investigation of the FIA for abusing their dominant position, restricting competition.

Remember, Max Mosley is in charge of this.

And a few years earlier, he transferred the ownership of his Formula One business to his then-wife, Slavica, for tax reasons.

And this will become very important.

Big Philip Green vibes here.

I don't know if you remember.

He paid his wife an enormous dividend who lived in Monaco.

So similar sort of thing going on here.

So this new company is called SLEC Holdings, S-L-E-C, Slavica, Eccleston.

It's the first kind of few letters combined.

Now, if you're wondering to yourself, wait a second, who's a Slavica woman?

It's probably worth doing an update on Bernie's marital status.

It gets quite busy.

He divorced his first wife, Ivy.

You remember her, the one he gave a house to back in the 1960s?

They'd had one daughter.

He then married Croatian former model, Slavica Radic, in 1985.

She was 28 years his junior and quite a few inches taller than him, too.

So they had two daughters, but Slavica and Bernie would later divorce, and it went down as one of the top five most expensive divorce settlements in history at the time.

Slavica was given £740 million.

It's interesting that so often when we've been doing these billionaire stories, we get a kind of measure of how rich they actually are by the size of their divorce settlement at various times.

It's like a kind of benchmark, isn't it?

How much were you willing to pay your wife and did you or did you not sign the prenup?

Yeah, exactly.

Jeff Bezos' wife, for example, I think is now one of the top 10 richest richest people in the world as a result of that divorce settlement.

Anyway, back to Bernie and Slavica.

At the end of the 1990s, they're still happily married, and she owns Sleck Holdings, which is essentially Formula One.

And together, they start to sell off shares of Sleck Holdings.

Yeah, which is not the done thing, right?

Well, it's an odd one, this, because he's trying to, in a way, I suppose he's cashing out, he's turning this asset into cash bit by bit.

So it's pretty complicated, but he sells off 25% here 25

there 1.50 is owned by a german media company called kirch eventually kirch goes bust the banks end up taking it over and they have 75 is owned by big banks like jp morgan layman brothers uh bearish landsbank you know there's been a labyrinthine bunch of of corporate structures here but eventually 75 is owned by a bunch of banks and Bernie Eccleston's own family trust, Bambino Holdings, owns the other 25%.

So after selling 75%,

by the age of 70, Bernie Equiston is worth £3 billion.

And that makes him the third richest man in Britain in 2001.

So it's official.

He is a billionaire.

But does Bernie take his foot off the gas?

Oh, no.

Not at all.

He doesn't take his foot off the gas, but some threats begin to hove into view.

In 2004, his control, which he's now had for pretty much 30 years, comes under threat.

The three banks who own that 75% attempt to sue him for the right to appoint directors because they say, hang on a second, we got 75% of the shares, but we've got no control whatsoever.

What's going on?

So the judge in this case ruled that the banks should be given a bigger say in the running of the sport, but Bernie still has a few cards up his sleeve.

Yeah, he basically buys them off.

He has this weird meeting at Heathrow Airport with lots of the team bosses.

He offers the teams £260 million over three years, but only if they commit to a new agreement.

And this means that the banks back down because they then announced they've got no plans to oust Bernie and that was never the intention.

But they did kind of fire a warning shot.

They said, there are limits.

We will no longer allow ourselves to be pressed into a role in which we carry all the equity risk without saying a word.

This is incredible, actually, because when you have three powerful banks up against you, the odds are in the banks' favour.

Right, because it's big guys like J.P.

Morgan, Lehman Brothers.

But what they think realised is that Bernie still had control and influence with the teams who are the people who put the cars together and made the races and what have you.

So they didn't want to earn 75% of something if he still had control of what was the stuff that made people want to watch it.

Right.

And he still has presumably the ear of all these team bosses too.

Correct.

If he can corral them all in Heathrow Airport.

So there are a few other changes to the ownership of this.

There's a private equity company called CVC that comes in and buys up the bank's interest.

They end up selling out to a company called Liberty Media.

They completed an $8 billion takeover of Formula One's parent company.

Liberty Media is owned by a guy called John Malone.

He's an even bigger fish than Bernie.

So in 2016, Liberty Media completes this takeover and that effectively pushes Bernie out.

So that's after four decades of like an iron grip on Formula One.

Yeah, he was given some meaningless title of chairman emeritus and he said he was an advisor to the board, but they never consulted him.

I've got the highest position there is, so high that when I look down, I can't see anything.

So at this point Bernie isn't in control of the sport but he's still got tons and tons of cash but the story does not end there and you know spoiler alert it really doesn't end well.

Back in 2014 Bernie had found himself in a German court on bribery charges.

He was accused of paying a bribe to ensure Formula One was sold to a party that would keep him running the sport.

So pretty serious allegations and he actually faced quite a long stretch in prison, 10 years, which at that point for Bernie, who's a relatively advanced age by then, it's no joke.

But he manages to wiggle free because, under German law, you can settle criminal cases with financial penalties with no admission of guilt.

And Bernie has a lot of cash to spend, so he pays $100 million to walk away scot-free.

Basically, buys himself out.

Meanwhile, the Inland Revenue in the UK and, in fact, BBC's Panorama team, have been investigating Bernie since the late 1990s, thanks to this curious trust relationship he'd set up for his wife.

So this arrangement was legally sound so long as Bernie had never been involved in operating the trust.

And you think about everything we've discussed about this man and his and his love of weighing in on things.

Do you think he was running that trust or not?

Yeah, exactly.

He's not a hands-off kind of guy, is he?

The Inland Revenue came to an agreement with Eccleston about that trust in 2008.

So it involved a £10 million payment.

Some people said, look, this is a bung to call off the investigation.

He said that it was the amount that HMRC said he'd underpaid.

So it was in fact just paying his back tax bill.

But the deal was later sort of rescinded by HMRC, who said they'd been misled.

So then in 2015, he sets up a meeting with HMRC to try and bring an end to this whole investigation into his finances.

And they kind of gave him a chance to correct his mistakes.

Yeah, they said, come clean, but he didn't.

He didn't declare more than £400 million held in a trust in Singapore when he was asked about it by tax authorities.

So in 2022, he was charged with tax fraud and he initially pled not guilty, sir.

But in 2023, just last year, he did plead guilty to tax fraud and he was sentenced to 17 months in prison, suspended for two years on the basis that he's pretty old by this stage.

He's in his 90s.

Oh, yeah, I think he was 92.

He also agreed to repay almost £653 million to HMRC.

And that £653 million was the biggest an individual has ever paid HMRC, the UK tax authorities, in relation to a fraud case.

And I think put him second in the list of all taxpayers.

That's a tax bill and a half.

And by his side, loyally at the courthouse, was not his second wife, but his third wife, Fabiana Flossi, whom he met at the Brazilian Grand Prix.

She is, for the record, 46 years younger than him.

And they had a son in 2020 when Bernie was age 90.

Respect.

And talk about becoming a dad late in life.

We've come right up to the point at which Bernie, a new dad in his 90s, also convicted of tax fraud and paying back an enormous tax bill.

It's time to judge him.

Is he good, bad, or just another billionaire?

Well, on wealth, his current wealth is listed at $2.9 billion.

That makes him the 65th richest man in the UK, well down

on the global list.

But in 2001 he was the third richest man in Britain.

And sometimes when we do this, don't we?

We sort of say how they wear it.

And he spent so lavishly.

He was famous for spoiling his wife and kids rotten.

And actually they had houses they didn't even live in.

Like there's one London house they sold in 2004, which they sold for £57 million.

They'd never even moved in.

That's incredible.

I'm going to give him a four for absolute wealth.

I think I would agree.

I'd actually rank him lower because, you know, obviously he had to pay that enormous tax bill, but he splashes the cash very, very luxuriously.

So he goes up.

Okay, so how far has he come?

Rags to riches is our next category.

Pretty humble beginnings.

Yeah.

You know, I actually think he might be probably one of the most modestly born billionaires we've encountered so far, aside from people like Oprah.

Yeah, Oprah wins that one hands down.

But yeah, from being rural Suffolk, bike rounds,

hustling, second-hand car dealer to dominating a very glamorous, deep-pocketed international sport.

I'm going to scoring pretty highly on this.

I might give him an eight.

I think I'd actually give him a nine, you know.

Okay.

Just because he grew up with no running water.

He was scared of parties when he was a child because he never had one thrown for him.

And then just see him, you know,

splashing champagne all over supermodels.

That's quite the journey.

Yeah.

So you're an eight, I'm a nine.

Okay.

What about villainy?

Because he has said some pretty bad things.

Yeah.

Every time he opens his mouth, he says something disastrous and very damning.

Yes.

So the biography, No Angel, The Secret Life of Bernie Eccleston by Tom Boer was very helpful for this episode.

And actually, Bernie cooperated while writing it and he fully acknowledged that he was quote unquote no angel.

Yeah.

So let's, where should we start?

Let's start with women.

Okay, with the women.

What did he say about female racing drivers?

So when asked what he thought in 2005 about Danica Patrick, who was was a female race driver, he said, you know, I've got one of those wonderful ideas.

Women should be dressed in white like all the other domestic appliances.

Oh, God.

We heard earlier in the podcast about him dismissing those concerns about racism that was directed at Lewis Hamilton.

And it's also worth noting that the Lewis Hamilton comment is not the first time he's made a racist gaffe, if you want to put it kindly.

There's actually an interview with Piers Morgan where he compares using the N-word to like being rude about someone's weight.

Yeah, and then he says something which is, I've never met a coloured person I didn't like.

I mean, this is the language of someone who's, you know.

It's a language of someone who doesn't really belong in a modern sport.

Yeah, I think that's exactly right.

And he's got a few choice words about Vladimir Putin.

He said in a 2017 interview about Putin, I think the guy who should be running Europe impressed me more than anything as Mr.

Putin because he's a guy that says he's going to do something and does it.

He's a first-class person.

And then he doubled down in 2022, saying saying that he would take a bullet for him.

Yeah, 2022, that is post-Ukraine invasion?

Yeah, I think it was because he had to apologise for that.

But let's also talk about the ruthlessness he had to deploy to get to where he was at the top of Formula One.

Yeah.

Some would call it ruthless.

I would say really, really astute deal making.

I mean, his big breakthrough in many ways was getting his mate, Max Mosley, installed at the FIA, because that meant he had an ally on the other other side of the warring factions and that made him bring them together.

But he did put money back into the sport.

There's no doubt he skimmed off an awful lot for himself.

And he also did his absolute best to avoid paying tax on any of it.

Yeah, tax man shy,

misogynist.

It's not going well.

No.

But then I would have to say on the relative scale of bad billionaires, you know, compared to arms dealers and drug traffickers.

Yeah, he's nowhere near there, is he?

I'm going to give him, for villainy, I'm going to give him a

seven.

I'll give him a seven as well.

I think he's nowhere near someone like El Chapo.

Exactly.

So we have to kind of...

El Victor Boot,

God of War, Merchant of Death.

Philanthropy is another of our categories.

It's often mentioned that Bernie regularly gives to charity, but we have yet to see very many details about it.

We do know this is a very big story.

In 1997, he donated a million pounds to the Labour Party.

It wasn't made public at the time, but it emerged because once Labour were in power, Tony Blair got into power, they announced they were going to ban all sports sponsorship by tobacco companies.

And at that time, Formula One was dominated by tobacco advertising.

The government then announced proposals to exempt Formula One from that ban for a period of time.

And basically, people put the two things together, saying million pound donation.

getting a stay of execution on on sports sponsorship from tobacco.

Those two things look pretty rotten rotten to me.

And so that was a big story.

And Tony Blair actually had to apologise, I think, for how they handled the whole affair.

So I don't think that counts as philanthropy, do you?

No, I don't think that counts as philanthropy either.

It sounds like he made a very good deal for himself.

Yeah, it's interesting, actually, because

if you go back to the 70s, all the cars, the McLarens, were kind of in Marlborough colours, you know, cigarettes, camel were on all of them.

It was basically, it was a tobacco fest.

I think Eccleston's point was that given it's so dominant, can we have a bit more time to adjust?

But putting those two things together through that political donation, people just thought that smelt a bit bad.

Yeah, it does smell.

I mean, it smells like a bag of smoke to me.

Philanthropy, we don't really know, do we?

I'm going to say one.

Yeah, I mean, I think in 2008, the Times said he gave away $50 million a year, but didn't go into the details.

We'll put one question mark.

One question.

Could you have some more details?

Yeah, yes, please.

Bernie, if you're listening, could you send through the charity receipts, please?

Okay.

He was very, very generous to his own family.

Again, I wouldn't class Tamara Eckerston as a charity.

Certainly not.

Okay, poor score there.

Power.

At the height of his power, I mean, within the sport, totally dominant.

Yeah, but while Formula One is massive, it's not huge in the same way the Premier League is, is it?

Well, it's funny you say that.

I think that's right.

In terms of viewing figures, Premier League probably does more, but Formula One does incredible numbers all around the world.

And not only that, but as I said earlier, getting a Grand Prix to a country, whether Bahrain or whatever, or

those are conceived as kind of placemaking, sports washing events, which are incredibly important for the prestige of countries.

So that is why he knows a lot of heads of state,

you know, many, many heads of state among his friends and could probably call them up and say, you know, probably drive a hard bargain, but if they say, Bernie, help me out, I need a Grand Prix because it's good for the prestige of my country.

I want to take people's minds off X, Y, and Z.

There's some real political power there.

It's interesting, actually.

I didn't think of it that way.

I guess it's because he never tried to use it beyond, you know, that dodgy stuff with labor.

He never tried to use it for his own personal ends.

He basically just loved Formula One and racing.

He never tried to turn that kind of political clout into, you know, running for office or anything like that.

True enough.

Okay,

that's a fair point.

He's not trying to wield political power other than to get a better deal for himself and for the sport in general.

Within the sport, a 10.

Within the world at large, a 3.

So So I'm going to give him a 6.

Right.

I think I'd kind of come down slightly lower.

I think I'd give him a 5.

Okay, so legacy.

How long will we remember Bernie Eccleston?

It's funny, because Bernie Eccleston himself said he would have no legacy.

He actually told a podcast in 2019, I don't have one.

I will disappear and be forgotten within a few months, like most people.

The question on all of these sometimes is...

What lasting impression did they make that nobody else could have made?

And I think that it was very unusual that he managed to seize control.

I think he's got legacy in one regard.

People will be very nervous about seeing a sport fall into the control of a single individual with very few checks and balances ever again.

So I think, in legacy terms, it's probably like, here's not what to do.

Don't let this person become an Eccleston of ex-sport.

So I think that in that sense, there's a sense of legacy.

A kind of cautionary tale.

A cautionary tale of what happens if someone gets total grip on something.

I mean, for example, there are people who call Barry Hearn the Bernie Eccleston of Snooker because he's essentially taking over the entire sport.

He gets to decide where they play, how often they play, which countries they play, and all that kind of stuff.

And that's in one person's sole control.

And people say, we don't want one individual to be able to call the shots in that regard.

So for legacy, I'm going to give him a...

five against his better judgment.

I feel like I'm tempted to agree with Bernie on his own judgment.

I'm going to give him a four.

Okay.

So good, bad, or just another billionaire, I think I know which way I'm going on this one.

I just think that sticking up for Vladimir Putin's outrageous comments about defending the racism against Lewis Hamilton and his unacceptable comments about women's role in Formula One, I think he's got to end up in the bad column.

Oh, I think even just for his comments about women in Formula One, this wasn't like the 70s.

He was saying this stuff at a time when women in sport were becoming actually a thing, and people were like, Oh, it's a good thing to have more women in sport.

And he's still out there comparing them to refrigerators.

Yeah, I mean, he's a bad guy for me for sure.

And not only that, of course, in the tax thing, I mean, they actually had a sit-down with HMLC and they say, Let's sort this out, right?

And he said, Okay, I'll tell you everything, and then didn't.

Although they caught up with him in the end, it's not because he didn't strain every sinew to try and keep as much money out of their hands as possible.

Um, sorry, Bernie, you're a bad billionaire.

So who do we have next episode?

Well if you're a football fan you will probably will have heard of this person.

He's just bought a quarter share in one of the most famous football clubs in the world and it's considered one of the great post-war industries.

It's Sir Jim Ratcliffe, very big in the petrol chemicals industry and soon to become very big in football.

Thanks for listening to Good Bad Billionaire.

This podcast is produced by Hannah Hufford and Mark Ward.

James Cook is our editor and it's a BBC audio production.

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