From being the leader of Formula 1 to being convicted of tax fraud: the ascent and descent of Bernie Ecclestone.
Ernie Ecclestone was the dominant force in managing Formula One for many years. Due to the small number of employees at the company’s London headquarters in Kensington, there were limited options for leadership. The top tier of the motor sport industry operated through personal interactions and in-person discussions.
Unfortunately, the friendly gesture of a handshake seems to have caused his downfall. Ecclestone recently admitted to committing tax fraud at Southwark Crown Court in London on Thursday. In an attempt to resolve a financial investigation by HM Revenue and Customs, he arranged a meeting in July 2015. However, he deceived the officials during this meeting. As a result, his problems did not come to an end, but rather, his responses that day have led to him receiving a 17-month suspended prison sentence.
Ecclestone has been ordered to give HMRC £652.6m as well as pay prosecution costs of £74,000. This comes after he confessed to not disclosing £400m in assets to the British tax authority.
Upon arriving at the court, Ecclestone, who will turn 93 later this month, was dressed in a grey three-piece suit and informed the judge, “I plead guilty.”
He experienced a significant decline in reputation after having a strong hold over race paddocks and receiving preferential treatment from various world leaders, such as Tony Blair and Vladimir Putin, from the late 1970s until January 2017. This made him a highly influential figure in the world of motor sport. Throughout his tenure, he successfully elevated Formula One into a valuable global media asset while also maintaining strict control over its commercial and sporting aspects.
Ecclestone’s ascent began when he became the owner of the Brabham racing team in the 1970s. He recognized that the unprofessional atmosphere of the sport was overshadowing its potential for profit. By uniting competing teams, he successfully convinced them to sell broadcasting rights as a package deal, resulting in a significant influx of television revenue.
After three decades, he slowly relinquished his hold on the company’s finances and in 2005 sold a portion to the American private equity firm CVC. CVC allowed Ecclestone, who seemed to enjoy negotiations as much as the sport itself, to operate independently as profits poured in. But this changed when Liberty Media purchased Formula One from CVC in 2017. Ecclestone, whose unorthodox business practices did not align with current standards of corporate management, was ousted soon after the acquisition.
Liberty’s current goal is to attract a younger demographic, which was previously rejected by Ecclestone in 2014 due to his belief that young people could not afford luxury watches like Rolex. However, Liberty has a different perspective and has utilized social media to increase visibility and attract more viewers. Additionally, their successful Netflix documentary, Drive to Survive, has played a significant role in Formula One’s surge in popularity in the US, something that Ecclestone was never able to achieve.
Previously, Ecclestone has encountered legal issues. In 2014, he reached an agreement, without accepting any wrongdoing, to pay £60m in order to resolve a bribery trial in Germany. Additionally, in 2022 he was detained by Brazilian authorities for possessing a firearm while boarding a personal aircraft, but was later released on bail. According to the Crown Prosecution Service, HMRC initiated their investigation in 2012.
Ecclestone was given an opportunity by the tax authority to rectify any errors in his tax payment and settle the owed amount along with a penalty, without facing criminal charges. However, during a meeting in July 2015, he committed a crime by falsely claiming in an interview with tax investigators that he was not involved in any offshore trust as a settlor or beneficiary.
The CPS stated that information from the authorities in Singapore revealed that Ecclestone had given false information. In August, Ecclestone originally pleaded not guilty, but eventually changed his plea after lengthy discussions.
Ecclestone has made sporadic appearances at Formula One races since his removal, but his public presence has decreased. He has also made peculiar remarks, including criticism of F1 and declaring last year that he would defend Putin at all costs, even after Putin ordered the invasion of Ukraine.
Ecclestone’s legal team argued during the trial that his advanced age made him vulnerable to the effects of imprisonment and that it could potentially be life-threatening. However, the presiding judge, Mr Justice Bryan, acknowledged the severity of Ecclestone’s crime but also considered factors such as his low likelihood of committing another offense, his age, his health, and the potential impact on his young child before giving his ruling.
On Thursday, Ecclestone was surrounded by the media once again as he entered a white Range Rover outside the court. When asked for his thoughts on his sentence, his response was inaudible.
Despite his damaged image, the founder of Formula One remains free. Following the trial, a journalist from the Sunday Times saw him purchasing doughnuts at a stall in London’s Borough Market.