Post by QPR Report on Sept 25, 2009 0:06:08 GMT
BLOOMBERG -1 Ban May Cost Briatore $9.1 Million a Year, Accounts Show
By Alex Duff
Sept. 25 (Bloomberg) -- Former Renault Formula One team manager Flavio Briatore could lose out on at least $9.1 million a year after resigning because of a cheating scandal, company accounts show.
The 59-year-old Italian was banned for life from the auto racing series on Sept. 21 for conspiring to fix a race. He collected $7.6 million in consultancy fees from selling series television rights in Spain in 2007 on top of his $1.5 million salary. He also benefited from management contracts with drivers including Red Bull’s Mark Webber and McLaren’s Heikki Kovalainen. The team escaped with a suspended ban.
“They’ve isolated him,” Mark Borkowski, a public relations consultant in London, said in an interview. “His brand is damaged: He’s got an uncertain future.”
Briatore’s troubles extend to his other holdings. He may face a ban from co-owning English soccer’s Queens Park Rangers under league rules. He denies wrongdoing, according to Formula One’s ruling body, Federation Internationale de l’Automobile, which says he has 14 days to appeal.
This weekend is this year’s Singapore Grand Prix, the race where Briatore and Renault team engineering chief Pat Symonds conspired with driver Nelson Piquet Jr. for him to crash last year to help teammate Fernando Alonso win, according to the FIA. Piquet Jr., dropped by the team in August, and a whistleblower dubbed “Witness X” gave evidence about the plot, the FIA said.
Briatore left his post last week. The FIA then ruled drivers managed by Briatore must end their contracts with him and he will be denied access to races for life. He also manages Renault’s Romain Grosjean.
Left Without Means
“He has been left without his means to earn a living,” Carlos Gracia, president of the Spanish motor racing federation, told the newspaper As. Briatore may sue the FIA because there was no clear evidence to incriminate him and he didn’t have a chance to defend himself, Gracia added.
Briatore couldn’t be reached for comment for this story.
Renault’s removal of Briatore and Symonds helped mitigate its sanction, the FIA said. The FIA also took into account an apology by Renault and a “significant” contribution it agreed to make to FIA road safety projects.
Briatore, who entered Formula One in 1989 as commercial director of Benetton SpA’s team, has multiple interests in Formula One, some of them stemming from his friendship with series Chief Executive Officer Bernie Ecclestone, former Minardi team manager Paul Stoddart said.
Tied at Hip
“Flavio and Bernie are inextricably tied at the hip,” Stoddart said.
Ecclestone ceded Briatore the television rights to Formula races in Spain, the Italian said in an interview in 2006. The rights are exploited via Stacourt Ltd., a unit of Briatore’s Formula FB Business, which is based in the British Virgin Islands. In 2007, Briatore received 4.7 million pounds ($7.6 million) in consultancy fees, company filings of Stacourt in London show.
Ecclestone, 78, didn’t immediately respond to an e-mail sent to his London office seeking comment and an FIA official didn’t return an e-mail seeking comment about whether the deals were affected.
Ecclestone and Briatore in 2003 set up the GP2 series, which runs on Formula One race weekends, with the Italian’s associate Bruno Michel. The series was sold to CVC Capital Partners Ltd. in 2007 for an undisclosed amount. The private equity firm bought Formula One a year earlier after taking out $2.5 billion in loans.
Soccer Issues
In soccer, Briatore and Ecclestone bought second-tier Queens Park Rangers for 14 million pounds in 2007. Steel billionaire Lakshmi Mittal bought a 20 percent stake four months later. Earlier this month, league officials asked the FIA for documentation about Briatore’s case. League rules say team owners or directors should be barred if subject to a ban from a sports governing body.
Neither Ecclestone nor Mittal has condemned Briatore and the possibility of repairing his public image isn’t out of the question, Borkowski said.
“He has a lot of powerful friends and Formula One is one of the most unpredictable sports,” Borkowski said.
To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net
www.bloomberg.com/apps/news?pid=20601102&sid=aLzzjyCnSfME
By Alex Duff
Sept. 25 (Bloomberg) -- Former Renault Formula One team manager Flavio Briatore could lose out on at least $9.1 million a year after resigning because of a cheating scandal, company accounts show.
The 59-year-old Italian was banned for life from the auto racing series on Sept. 21 for conspiring to fix a race. He collected $7.6 million in consultancy fees from selling series television rights in Spain in 2007 on top of his $1.5 million salary. He also benefited from management contracts with drivers including Red Bull’s Mark Webber and McLaren’s Heikki Kovalainen. The team escaped with a suspended ban.
“They’ve isolated him,” Mark Borkowski, a public relations consultant in London, said in an interview. “His brand is damaged: He’s got an uncertain future.”
Briatore’s troubles extend to his other holdings. He may face a ban from co-owning English soccer’s Queens Park Rangers under league rules. He denies wrongdoing, according to Formula One’s ruling body, Federation Internationale de l’Automobile, which says he has 14 days to appeal.
This weekend is this year’s Singapore Grand Prix, the race where Briatore and Renault team engineering chief Pat Symonds conspired with driver Nelson Piquet Jr. for him to crash last year to help teammate Fernando Alonso win, according to the FIA. Piquet Jr., dropped by the team in August, and a whistleblower dubbed “Witness X” gave evidence about the plot, the FIA said.
Briatore left his post last week. The FIA then ruled drivers managed by Briatore must end their contracts with him and he will be denied access to races for life. He also manages Renault’s Romain Grosjean.
Left Without Means
“He has been left without his means to earn a living,” Carlos Gracia, president of the Spanish motor racing federation, told the newspaper As. Briatore may sue the FIA because there was no clear evidence to incriminate him and he didn’t have a chance to defend himself, Gracia added.
Briatore couldn’t be reached for comment for this story.
Renault’s removal of Briatore and Symonds helped mitigate its sanction, the FIA said. The FIA also took into account an apology by Renault and a “significant” contribution it agreed to make to FIA road safety projects.
Briatore, who entered Formula One in 1989 as commercial director of Benetton SpA’s team, has multiple interests in Formula One, some of them stemming from his friendship with series Chief Executive Officer Bernie Ecclestone, former Minardi team manager Paul Stoddart said.
Tied at Hip
“Flavio and Bernie are inextricably tied at the hip,” Stoddart said.
Ecclestone ceded Briatore the television rights to Formula races in Spain, the Italian said in an interview in 2006. The rights are exploited via Stacourt Ltd., a unit of Briatore’s Formula FB Business, which is based in the British Virgin Islands. In 2007, Briatore received 4.7 million pounds ($7.6 million) in consultancy fees, company filings of Stacourt in London show.
Ecclestone, 78, didn’t immediately respond to an e-mail sent to his London office seeking comment and an FIA official didn’t return an e-mail seeking comment about whether the deals were affected.
Ecclestone and Briatore in 2003 set up the GP2 series, which runs on Formula One race weekends, with the Italian’s associate Bruno Michel. The series was sold to CVC Capital Partners Ltd. in 2007 for an undisclosed amount. The private equity firm bought Formula One a year earlier after taking out $2.5 billion in loans.
Soccer Issues
In soccer, Briatore and Ecclestone bought second-tier Queens Park Rangers for 14 million pounds in 2007. Steel billionaire Lakshmi Mittal bought a 20 percent stake four months later. Earlier this month, league officials asked the FIA for documentation about Briatore’s case. League rules say team owners or directors should be barred if subject to a ban from a sports governing body.
Neither Ecclestone nor Mittal has condemned Briatore and the possibility of repairing his public image isn’t out of the question, Borkowski said.
“He has a lot of powerful friends and Formula One is one of the most unpredictable sports,” Borkowski said.
To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net
www.bloomberg.com/apps/news?pid=20601102&sid=aLzzjyCnSfME
