CHAPTER 438: FORMULA 1 BACKGROUND

Richard thought his meeting with Bernie Ecclestone was nothing more than a formality that didn’t warrant much reflection.

After exchanging a firm handshake and a few courteous words, Bernie excused himself, leaving Richard alone with Vince McMahon.

Richard chose to remain reserved. The reception, after all, wasn’t an official Formula 1 gathering but a promotional event organized under a third-party banner. Since he was there, it wasn’t wrong to think of it as just another evening of polite networking under bright lights and champagne/orange juice chatter.

"Are you interested in SLEC shares?"

Suddenly, out of nowhere, Vince said to Richard, catching him completely off guard and leaving him momentarily speechless.

"...What?"

"SLEC shares, do you want it?"

SLEC, or SLEC Holdings Ltd., was a holding company created by Bernie Ecclestone, which owned the companies that controlled Formula One’s commercial rights, such as Formula One Administration (FOA) and Formula One Management (FOM).

The company was founded by Bernie Ecclestone, who, at that time, held only 25% of SLEC’s shares through his family trust, Bambino Holdings. The remaining 75% had fallen into the hands of Speed Investments, a consortium jointly established by Bayerische Landesbank, JP Morgan Investment Bank, and Lehman Brothers.

Vince McMahon let out a weary sigh. "Bernie, that guy’s chasing investments left and right — but since when has anything ever been easy?"

Among the elite circle of businessmen, it was common knowledge that Formula 1 was a high-risk, high-prestige, low-profit venture. On the surface, F1 looked like a premium, future-proof sport, but beneath the glamour lay brutal realities — spiraling costs, fierce competition, and relentless regulatory hurdles.

Just the year before, whispers around the paddock claimed that top teams were burning through more than $200 million a season, while smaller outfits were barely keeping their wheels on the track. Unless a team delivered results or carried the weight of a powerful brand, profits were little more than wishful thinking.

"Is he having financial difficulties?" Richard was stunned.

Butterfly effect?

For as long as he could remember, SLEC Holdings had never collapsed. Even when Formula 1 went through periods of turbulence, the structure somehow managed to stay afloat.

"No. Bernie wants to have full control of F1, but right now he’s facing challenges. SPEED Investments, which is said to hold the majority of shares, is preparing to seize those rights from him."

"SPEED?"

Vince nodded. "Bayerische Landesbank, JP Morgan Investment Bank, and Lehman Brothers. They want to scoop up Kirch’s stake, and possibly Bernie’s as well. Kirch, meanwhile, is looking for a higher valuation — that’s why..."

The consortium, jointly established by three banks, wanted to take the opportunity to bring down Bernie Ecclestone — to intervene and see if there was a chance to acquire SLEC and thus control the operations of Formula 1, which was known as the third-largest sport in the world.

To them, such a massive business should never have been so centralized. Not to mention, Bernie himself was under growing pressure from car manufacturers forming their own alliance — the GPWC — which threatened to create a rival series.

Since almost all of the money flowed through Bernie Ecclestone’s private companies (FOM, FOA, and SLEC), it could be said that Formula 1 at the time was a billion-dollar enterprise run like a family shop.

"Hmmm..." Richard rubbed his chin.

Bernie Ecclestone’s relationship with Formula 1 was complicated — and it began long before he became the sport’s undisputed ruler.

Formula 1 was founded in 1950, but in those early days, it was a far cry from the billion-dollar spectacle it would one day become. It was an amateur affair, with little to no income. Races were held on rough country roads, pit stops were nothing more than makeshift shacks, and drivers doubled as their own mechanics. Many weren’t even paid — they raced for passion, not profit.

Either they came from wealthy families, or they juggled second jobs just to afford to compete.

Team owners weren’t much better off. Most gambled their entire fortunes on racing. Enzo Ferrari, for instance, began producing and selling road cars solely to fund his Formula 1 dream.

By the time Bernie Ecclestone bought the Brabham team in the early 1970s, the sport had already been running for two decades. Conditions had improved, but management was still a mess. There were no clear rules governing participation or sponsor commitments, and chaos often ruled the paddock.

Bernie saw what others missed — a rough diamond waiting to be polished.

In 1978, after being elected chairman of the Formula One Constructors Association (FOCA) — a coalition of independent teams — Bernie began his transformation of Formula 1 into a true global business. FOCA’s purpose was simple: to unite the teams and fight for better commercial terms.

But to execute his vision, Bernie needed control of Formula 1’s commercial rights, which were held by the Fédération Internationale du Sport Automobile (FISA), the governing arm of the FIA.

To achieve that, he found an invaluable ally — Max Mosley, FOCA’s legal advisor. Together, they waged war against FISA President Jean-Marie Balestre, even threatening to form a breakaway championship.

The sport teetered on the brink of division: manufacturer-backed teams sided with FISA, while privateers backed FOCA. The future of Formula 1 hung in the balance.

Bernie knew that one name could tip the scales — Ferrari. He traveled to Italy repeatedly to win over Enzo Ferrari, and eventually, his persistence paid off. Ferrari joined FOCA’s cause, forcing FISA to surrender. Under pressure, Balestre handed the commercial rights of Formula 1 to FOCA.

With control in hand, Bernie moved fast. He guaranteed prize money for winning teams and required all entrants to commit to the full season, ensuring stability for sponsors.

Then came his masterstroke — television. At a time when live sports broadcasts were still in their infancy, Bernie foresaw their potential. He sold season-long broadcasting packages, convincing TV networks to buy coverage for the entire championship rather than individual races.

This brought stability, visibility, and — for the first time — real money.

Bernie kept 60% of the TV revenue for his own companies and gave 40% to the teams. No one complained — 40% of something was better than 100% of nothing.

Over time, however, as the sport exploded in popularity, that "small share" made the teams wealthy — and increasingly resentful of Bernie’s cut. Though their share eventually rose to 63%, many believed it still wasn’t enough.

Bernie, meanwhile, understood that money alone wasn’t enough to secure control — power was the real prize. He helped Max Mosley rise through the ranks of motorsport governance: Mosley became head of the Fédération Internationale du Sport Automobile in 1991, then the Fédération Internationale de l’Automobile (FIA) itself by 1993, uniting global motorsport governance under one roof.

With Mosley at the helm, Bernie struck his boldest deal yet — he purchased Formula 1’s commercial rights for 110 years, from for $360 million.

To do this, Bernie used SLEC Holdings, a company he founded specifically to manage F1’s commercial operations. But there was a problem: Bernie didn’t have enough liquid capital to pay for the deal outright.

To raise the funds, he sold 75% of SLEC to Germany’s Kirch Group, on the condition that he retained full control of Formula 1’s day-to-day management.

Now, with the Kirch Group teetering on the brink of bankruptcy, it could be said that if they failed to secure funds quickly, it would mark the largest corporate collapse in Germany since World War II.

Kirch’s 75% stake in SLEC was the opening SPEED Investments had been looking for to pressure Bernie into relinquishing control of Formula 1’s management. But Bernie Ecclestone’s empire was built on control — it was his greatest weapon and his greatest source of wealth. There was no way he would give it up without a fight.

In the original timeline, Bernie eventually contacted the private equity firm CVC Capital Partners and, through certain means, secretly acquired the shares held by Bayerische Landesbank, which owned the largest portion of SLEC — 50% of its shares.

With that, combined with Bernie’s own 25% stake, they effectively controlled up to 75% of SLEC.

The balance of power shifted. In the end, Lehman Brothers and JP Morgan Chase, the two American banks, had no choice but to swallow their pride and sell all their remaining shares to CVC Capital Partners, thereby withdrawing from the battle for control over Formula 1’s commercial rights.

"I know this is very sudden, Richard," Vince began, "But I heard you’ve been making some investment moves in America — including in the MLS — so I thought maybe you’d also be interested in something here."

Richard raised an eyebrow. "Why? Why not you? Why don’t you invest in F1 yourself?"

The other party gave a short laugh, then coughed awkwardly as he shook his head. "Forget it. I want to focus on the WWF for now. Besides..." His expression twisted into a grimace. "The amount of money Bernie’s asking for is insane."

Richard nodded. Indeed, Formula 1’s global growth was still in its expansion phase — not yet mature. Early entry meant high risk, but for Richard, who knew what the future held, there was massive upside potential before the consolidation peaked in the 2000s.

However, for that to happen, Bernie Ecclestone was the key player — the man who would transform this gentleman’s sport into a global commercial empire.

"Fine then," Richard said suddenly.

If it meant stepping into the shoes of CVC Investment Company and working alongside Bernie Ecclestone to acquire shares of SLEC, then so be it — he would do it.

A slow smile spread across his face as a thought struck him. ’Hmmm, if I can also promote the Rover Group in F1...’

Two birds with one stone.

In other words... jackpot.