CVC back to square one as Ecclestone sees off another potential successor

CVC Capital Partners, which owns the major stake in F1, has lost the man it hoped would lead the transition from Bernie Ecclestone's stewardship in...

CVC Capital Partners, which owns the major stake in F1, has lost the man it hoped would lead the transition from Bernie Ecclestone's stewardship into a new era and ultimately to floatation.

Paul Walsh, former CEO of Diageo and a respected figure in the world's finance districts, has walked away from the opportunity to become chairman of the F1 group, following a meeting with Ecclestone last Thursday, according to the Financial Times.

Walsh had been readied by CVC's managing partner Donald Mackenzie to take the helm and to steer a transitional period, looking for a successor to the 84 year old Ecclestone. Current chairman Peter Brabeck is standing down due to ill health. Everything was in place around Walsh, but then at a meeting of the F1 board last Monday the appointment was not made and questions began to be asked.

Following a meeting between Walsh and Ecclestone, it seems that Walsh (above) has decided not to pursue this avenue.

According to the FT, although he had no problems with working alongside Ecclestone, "Mr Walsh has decided that the role now envisaged for him does not give him the authority and power to manage the business, according to people with knowledge of the situation."

It is not clear at this stage whether that is the end of the matter, or whether Walsh is making a play for CVC to move decisively against Ecclestone, but it appears to be the former rather than the latter.

So it is back to square one for Mackenzie, having sold in the idea of Walsh to the investors and the F1 teams and Ecclestone has seen off another challenge to his grip on Formula 1. F1 has a very strong base on which to work and in a world where increasing numbers of people in new countries are finding wealth and wanting cars, Rolex watches and most especially exciting content, F1 has immense potential for growth.

The question is whether Ecclestone, at 84 and an avowed non-believer in the power of the internet and social media, is the man to take the sport into that future. He has said he has no plans to let go of the reins.

Meanwhile the sport faces some other significant challenges, especially the sustainability of teams, as small and medium sized teams face a struggle for survival due to an imbalance in payments of F1 commercial revenues in favour of the big famous teams, who also hoover up the bulk of available sponsorship.

Sauber, for example, was forced to hire Marcus Ericcson and Felipe Nasr as drivers for next year because their sponsors could make guaranteed up-front payments to the team before the end of this season, to shore up the cash flow.

F1's succession problem remains unresolved. Ecclestone is keen for his own candidate, Sasha Woodward-Hill to take the reins. She has been his in house lawyer for many years and it would give him long term control of the business.

But there is concern in major institutions over top managers appointing their own successors, as Manchester United's handover from Sir Alex Ferguson showed last year.