The history of Formula 1’s television rights is complex: Until the Formula One Constructors Association wrestled the sport’s commercial rights off the FIA’s sporting wing (known as FISA) during the early eighties internecine war known as FIASCO, the rights to broadcasts were held by the title holder of the circuit – effectively whoever owned the land reserved the right of admission, including for cameras.
Thus, F1 went from minority sport followed solely by dedicated petrol-heads via magazines and newsreels – unless spectacular accidents made world news, in which case interest peaked briefly in the dailies – to a global sport. Start-up Extreme E has followed that ‘free’ lead.
During the transition period FOCA had no transmission equipment of its own, so cut deals with local broadcasters: in return for providing their footage to FOCA to market internationally they were granted the rights to all events for the full season. Once broadcasters’ appetites had been whetted, rights followed, which increased commensurately with audience growth.
Bidding wars followed in territories with multiple broadcasters, but all revenues – bar Ecclestone’s slice, said to have been around 15% but the figure has since been disputed by folk who believe it was higher – flowing to participating teams via a complex performance-linked formula.
All this changed in 1998 when Ecclestone acquired F1’s commercial rights in the name of SLEC, his family trust, from an FIA presided over at the time by his long-standing friend Max Mosley for $320m for a period that was ultimately extended to 113 years. Simultaneously Ecclestone developed his so-called ‘digital TV’ product – old hat now, but cutting-edge stuff 25 years ago – for which subscriptions were charged.
Within two years he sold off 50% (plus an option on a further 25%) of SLEC to German TV upstart EM.TV, which struck a deal with KirchMedia when it hit cash flow problems. Kirch, at the time hoovering up sports rights across the world, planned to monopolise the pay-per-view industry and lined up F1, plus the FIFA World Cup and Olympics, in its sights. Saliently, KirchMedia declared bankruptcy in April 2002.
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Instrumental in Kirch’s collapse was the formation of Grand Prix World Championship, founded by five motor manufacturers then in F1 – BMW, Fiat, Ford, Mercedes and Renault – with Honda and Toyota aligning themselves with it later. The GPWC threatened a breakaway series unless Ecclestone and Kirch shelved plans for (subscription) pay-per-view television.
GPWC members asserted they were in F1 to be seen globally on free-to-air TV. But the GPWC gradually collapsed, not least due to the rotating roster of motor executives at its helm, who moved on within their companies or retired – thus robbing the association of crucial stability. Jaguar’s F1 exit hastened GPWC’s demise, with the Ford-owned subsidiary selling out to Red Bull in late-2004, reportedly for a dollar.
Ecclestone smelt blood and offered the then-financially strapped Ferrari a sweetener of $100m if it signed an extension to the Concorde Agreement. This opened the way to PPV deals, with Ecclestone (and Mosley) batting away criticism by arguing free-to-air contracts would be preferentially signed provided they delivered the same revenues. Which they could not. But, as we shall see, for F1 as a whole the argument was fatally flawed.
The next to depart was Honda (at the end of 2008) followed a year later en masse by BMW, Toyota and Renault (as team owner) in 2009. All save Renault took their engines with them when they slammed the door on F1, with only Honda returning (as engine supplier only) in 2015. It is heading for the exit again at the end of this season, likely for good.
Although the manufacturers at the time cited the global economic crisis as official reason for their departures – this excuse suggested managerial caution during the downturn – a number of them subsequently revealed that the true reason was dwindling eyeballs due to F1’s gradual shift to PPV.
“We would have stayed on in F1 had the ROI [return on investment] been solid crisis notwithstanding,” a Toyota source told me later, “but TV audiences were dropping and we were in F1 to be seen, whether we won championships or not.
“Don’t forget that during the crisis we didn’t stop other promotional activities or sponsorships, or advertising campaigns. We continued with these where the ROI was feasible.”
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A BMW manager expressed similar sentiments, adding that the global economic crisis was a “convenient excuse to exit without having to explain why we were leaving, and without giving Bernie the satisfaction of crowing that he had beaten the manufacturers” in what had been an acrimonious war.
The net effect is that F1 lost three engine suppliers: Cosworth (previously owned by Ford), Toyota and BMW, while Honda dipped in and out – indeed, one wonders whether Honda would have been committed to F1 in the longer term had its F1 marketing return on investment – largely driven by global eyeballs – been stronger. F1 has not yet recovered from the loss of those engine suppliers, as new initiatives to attract them proves.
Whatever, thereafter PPV deals were struck thick and fast, not only in individual territories but across entire continents: sub-Saharan Africa has, for example, has no free-to-air live coverage, with the rights held by South Africa’s Supersport channel – as per the official F1 website. With only one (PPV) broadcaster across the entire (multi-lingual) continent, is it any wonder Africa has not staged a grand prix in 30 years?
To illustrate the debilitating effects of PPV on F1 audiences, consider some numbers provided by Motorsport Broadcasting, the go-to site for independent media ratings. In 2018, the final year during which (free-to-air) Channel 4 and Sky UK shared F1’s rights, the former pulled 2m per grand prix, while the pay station attracted a third that for a cumulative audience of around 2.8m – 45% down on historic BBC-only averages of +4.5m.
True, one could argue that the more casual (race only) F1 fans saw no reason to splash out on subscriptions that provided behind-the-scenes insights they had little interest in, so stuck to the F2A alternative. But the real question, then, is whether PPV numbers grew where no free alternative exists. This year’s opener in Bahrain, the first under an exclusive Sky Deutschland deal, provides a pointer:
With RTL losing its free-to-air rights the country that pulled upwards of six million viewers during the pomp of Michael Schumacher and Ferrari saw the number of viewers who saw his son Mick make his F1 debut slump by 75%, while Spain saw similar drops after switching to PPV – despite at times having two stars in Fernando Alonso and Carlos Sainz Jnr. Germany and Spain are not isolated instances, as France and TF1 attest.
These contractions have affected not only TV audiences, but also race attendances – less TV exposure means less overall interest, equals less fans so fewer race-goers, resulting in reduced income for race promoters – and, by extension, lower hosting fees or even the disappearance of races from the calendar. Team entries, too, dropped from 12 during the early 2000s to 10 – effectively nine had Haas not decided to join in 2016.
Further side effects are that consumer brands and financial institutions walked – think back on Martini and similar alcohol products, IT hardware companies and the likes of HSBC, RBS, UBS and others, all of whom sponsor other activities or run glossy advertisements yet withdrew from F1. F1 is on a drive to attract ‘bridge and board’ partners – a quest that Liberty’s top brass admit is challenging despite F1’s global footprint. Why?
Surely none of this is purely coincidental…
The next broadcasting change came in 2018 with the introduction of F1’s live streaming service by Liberty Media – which had acquired F1’s commercial rights a year earlier – using a technology is known in the industry as ‘over-the-top’, or OTT.
F1’s OTT comprises F1 TV Access and F1 TV Pro, the former providing highlights and archive material and the latter full race weekend streaming. These are provided for a fee, of course – a factor in F1 TV’s failure to gain hoped-for traction although myriad well-documented technological issues also blighted its cause, which it has recently addressed with a new version.
Peak PPV, though, was reached in 2019 with the Sky UK deal, as illustrated by the following extract from an analysis published earlier this year by RaceFans:
“Exactly how crucial [is the deal] was revealed in February 2020 by Scott Young, then head of Sky F1 UK, during a presentation attended by RaceFans. Young’s presentation indicated that Sky’s hosting fees run to an eye-watering £1.18 billion ($1.53bn) for 2019-2024 – the six-year contractual period – averaging $255m per year, one-third of F1’s annual television income.”
The focus of this column is on that crucial $255m, for that 33% equates to around $750m in annual income for F1 from the sale of TV rights, overwhelmingly from PPV platforms. However, of that income the ten teams share around $450m – figures approximate after Covid ravaged the sport’s income streams, with the latest full numbers pulled from 2019 reports – or an average of $50m each, with Liberty retaining $250m or so.
Based on the foregoing, let us consider the feasibility of a return to free-to-air broadcasting, whether via platforms such as YouTube or free race weekend broadcasts via traditional stations as per FOCA’s early years. Clearly the major consideration is immediate losses in TV income, and whether these can be recovered via growth in global fan interest, and thus incremental promoter fees and greater sponsor spend at team and Liberty levels.
Although a full analysis would need to be undertaken by Liberty as to the viability of such disruptive steps, the data outlined above indicates that a return to full free-to-air across the globe is feasible, thereby boosting F1’s popularity across the globe. Additional manufacturers and sponsors are sure to be attracted – these also spend on below and merchandising activities, providing further boosts – while live attendances will surely improve.
As outlined, the amount to be initially recovered totals $750, split $250m for Liberty and an average $50m per team. For starters, Liberty could still provide post- and pre-race OTT insights for the benefit of mainline fans, while YouTube’s revenue sharing structure would deliver substantial income. In addition, slices of resultant TV advertising TV could be negotiated with commercial TV broadcasters, providing additional revenues.
Motorsport Broadcasting’s data suggests that the average drop in eyeballs due to the switch to PPV amounts to over 50% and up to 75% in some territories – suggesting that F2A will result in at least a doubling of eyeballs, in turn aiding Liberty’s quest of attracting further trackside partners and boosting rates.
Given ‘bridge and board’ advertising currently generates around $200m per year – of which Liberty retains a third – the additional income reduces the potential risks. YouTube/broadcaster revenues, increased trackside hoarding income, incremental race hosting fees, additional teams and engine suppliers and their associated spend will compensate for direct losses in TV income while providing global growth F1, with commensurate economic benefits.
That brings us to team income: As outlined here, in 2019 the teams derived approximately 50% of income from sponsors – whether from the parent company or brand, commercially sourced or driver-linked – with the balance from F1 (Liberty).
Of Liberty’s income, around 40% is broadcast rights-derived, the rest being their respective shares of promoter, trackside and hospitality income, so proportionately broadcast income amounts to 20% of budgets. Under the $145m budget cap the imperative for major teams – who traditionally received the largest slices of F1 income – to maintain the same levels of income reduces substantially, with some budgets almost halved.
Thus, teams would need to derive an additional 20-25% of their income from sponsors in return for F2A, which potentially boosts eyeballs by 200%. According to a sponsor agent currently operating in F1 such increased given the improved ratings is “eminently doable, and more”, while another was equally confident, provided a clear and unambiguous road map through to 2025 was provided. That is a guarded “yes”, then.
Most of Liberty’s contracts expire over the next five years – and any that mature within this time frame could be extended for lesser periods – as does the (2021-25 Concorde Agreement), providing time enough for in-depth studies into the full implications of all possible factors associated with returning F1 to global free-to-air TV by 2025. By their nature such studies must be all-encompassing, based on quantitative empirical data.
Of course, moving back to free-to-air is a step which holds major commercial implications but, managed correctly, the move could benefit all parties – be they fans, teams, sponsors, manufacturers and Liberty itself – with the exception of pay-per-view merchants. Still, surely F1 owes its fans greater loyalty than it does to the likes of Sky.
“It is a shame that the fans are not getting to see as much because the more people you have at a grand prix the more atmosphere, it’s the fans that make the sport what it is so the more you almost block them or deter them the worse the business is going to be for the people that own it,” Lewis Hamilton told RaceFans after the realities of the Sky deal were put to him in 2019.
The situation has hardly improved since Hamilton spoke those words. Indeed, it has worsened.
- The year of sprints, ‘the show’ – and rising stock: A political review of the 2021 F1 season
- The problems of perception the FIA must address after the Abu Dhabi row
- Why the budget cap could be F1’s next battleground between Mercedes and Red Bull
- Todt defied expectations as president – now he plans to “disappear” from FIA
- Sir Frank Williams: A personal appreciation of a true racer
80 comments on “Not just a fans’ pipe dream: Why live F1 should return to free TV”
Sonny Crockett (@sonnycrockett)
5th May 2021, 12:22
So you’re saying that Bernie created the system to line his own pockets? Surely not! ;)
An excellent article and a compelling argument for free-to-view F1 coverage. I’m 100% for it, as are most people I speak with.
Sonny Crockett (@sonnycrockett)
5th May 2021, 12:25
Just to caveat my comments:
Provided there are no commercials during the race coverage.
I’ve watched many races on Spanish TV that were approx 30% adverts. Not good.
5th May 2021, 12:31
Well, isn’t that the crux with all “Free” TV? You subjecting yourself to having your time wasted?
Sonny Crockett (@sonnycrockett)
5th May 2021, 12:37
Not when F1 was on the BBC in the UK which was it’s heyday.
5th May 2021, 12:41
The point being that the BBC is not “free”.
Sonny Crockett (@sonnycrockett)
5th May 2021, 12:50
The licence fee was/is compulsory.
The F1 coverage was not charged for separately.
5th May 2021, 12:53
Even ITV managed to restrain itself and only play them if nothing was happening.
In the USA ads tend to play picture-in-picture with the race which is an option to
Alianora La Canta (@alianora-la-canta)
5th May 2021, 14:18
@sonnycrockett The TV licence is not compulsory, although anyone receiving live TV or using the BBC’s catch-up service must pay, and about 98% of the British population does (or is eligible for exemption).
@falken Usually, ITV managed to only play ads when nothing was happening – Imola 2005 was the memorable exception. Not all territories allow the use of picture-in-picture ads (in the UK, for example, it’s only legal if the ad break is only one ad long, and the gaps between ads have to be the same as if a full break was taken).
6th May 2021, 8:44
In the Netherlands the races were free too but because of Bernie it became behind a paywall Luckly Ziggo made it free again for it’s abonnes and is somethings free for the rest al because of Max.
5th May 2021, 17:14
So you want to watch the TV coverage of an expensive sports for free? I mean, non interruptions commercials will only fetch so much.
5th May 2021, 21:40
The commercials are on the front, back & sides of the cars. The more people watching, the more exposure the sponsors get. 500,000 watching on Sky in the UK pales beside the 10 to 15 million that used to regularly watch for “free” on terrestrial TV. Less fans makes the sport unimaginably poorer.
5th May 2021, 12:23
If someone is the least bit interested in F1, F1TV Pro is a great deal. (where available)
A limited number of races available to non-subscribers should be enough to figure out if you’re interested.
“Free” TV is the worst.
Alianora La Canta (@alianora-la-canta)
5th May 2021, 14:18
@proesterchen Except, of course, for those people who continue to have technical trouble with F1TV Pro (even with the new version).
5th May 2021, 14:57
F1TV Pro is a good deal financially but also costs a lot of nerves. Additional hurdle is that you only can get the F1TV subscription for this season if you already had it. New subscriptions are not possible everywhere (I’m in Germany and here it’s not possible to get a new subscription).
5th May 2021, 15:47
@Prieni What, so F1TV is not accepting any new subscribers? Serious?
Why on earth not!?
5th May 2021, 16:22
F1TV Pro is no longer available in Germany thanks to the TV rights agreements Liberty / Formula 1 have agreed with Comcast / Sky. I don’t think the same is true globally, though there are other countries where F1TV Pro has never been available, like the UK, or is yet to be launched.
5th May 2021, 19:25
That depends on where you are based Prieni, @homerlovesbeer, @proesterchen.
I live in the Czech Republic and here (as in Slovakia and quite a few other countries) many were very happy to see that it became available as an option for us from this season onwards. Thing is, it depends on what deals Liberty has in which territory.
In the Netherlands it is tied to having a Ziggo/Vodaphone subscription/contract (I hope I got that one right? Or did that change too?), in Germany it was an option under the previous mixed contract with Sky and RTL but since Sky payed up for an exlcusive deal they only allowed people who already had the OTT service to continue using it, in the UK (and Italy and …) it was never offered at all since they have exclusive TV deals with Sky or with others.
And then there are territories where Liberty did not (yet) introduce it, but they have been widening coverage as far as I know to make it wider available.
5th May 2021, 20:28
I am in the Czech Republic too (temporarily in Brno) and F1 TV saved my life. otherwise i woudl just not have been able to watch F1 with English commendary.
on the other hand, buffering is super annoying and when you connect the laptop to a TV the video quality is horrible…
6th May 2021, 0:15
Never available in Australia due to Foxtel (Murdoch) cable deal which requires extra subscription on top for “Sports package” most of which is of no interest to many F1 fans.
6th May 2021, 10:24
Yup. And Kayo is hopeless.
8th May 2021, 23:29
In the Netherlands you can buy a F1TV subscription regardless of having a Ziggo contract.
A Ziggo Sport Totaal contract (an extra pay tv sports channel service) includes a free F1TV contract as well.
5th May 2021, 12:32
If it was’nt for free-TV, I would’nt have become a fan of F1. I remember watching my first race in the early 90s out of curiosity to see who these Senna, Prost and Mansell were.
Sonny Crockett (@sonnycrockett)
5th May 2021, 12:37
Same but a few years earlier.
5th May 2021, 12:59
Yep. I’d never have bothered with F1 if it wasn’t free.
With the current fetish for paywalls (and the poor quality of product) I certainly wouldn’t get into F1 now if I wasn’t already.
5th May 2021, 20:44
Was quite interested before seeing it on TV, but free coverage helped solidify it I guess
Steven Robertson (@emu55)
5th May 2021, 12:57
I can only speak for the UK, but my main issue isn’t the PPV it’s the cost of it, at around £40 a month for a full sports channel I don’t want. So I watch the channel 4 highlights instead.
5th May 2021, 13:28
That is the same as a 12 month sub of f1tV Pro so you kNow.
5th May 2021, 23:25
@peartree Nice one! But I don’t think that anyone got what you point there. So, I’ll be more straight. F1TV + VPN subscription, which is what I do also. I got both with offers, so it’s 3.5 quid per month for me.
Phil Norman (@phil-f1-21)
5th May 2021, 14:44
Absolutely. About the only thing I would watch on Sky Sports is F1. Maybe an occasional football match. So I am not wiling to pay for Sky. I do occasionally pay to watch a live race via NOW TV. Anyway I actually prefer the C4 F1 coverage. I have never found adverts that annoying either right from when they started.
I do hope we can get to a situation in the U.K. where we can at least have more coverage on F2A TV. Even if it’s only a selection of live races like the C4 deal used to include. Now is the time to reconsider F2A deals as the sport has suffered a set-back in profile owing to the effects of Covid. I think it might spark a renaissance in the sport especially with the new rules from 2022.
5th May 2021, 15:14
Even the Channel Four packages had deminished. You use to be able to watch the entire season of highlights on their catchup service, now the hightlights are only shown for a week and then they are wiped. why? I’m guessing that’s also down to Liberty’s [the irony] F1 copy rights.
In the old days you could at least have taped the race, that’s not so feasible today with our HDMI boxes,
although you can find the hardware used by gamers to achieve something like this. So much for this promised
5th May 2021, 20:41
In Belgium, I can still watch F1 free to air on RTBF (french speaking public broadcasting). Being Dutch speaking, good for my french! There are 3 short commercial breaks during the race (one minute or even less, race still shown in a frame in a corner of the screen), with the commentator giving a cue for a break during a calm part of the race.
5th May 2021, 15:16
You pay £40 a month? For sky f1? I only pay £9.99 a month. Got that deal before the f1 season last year and have kept it. T
5th May 2021, 13:09
It is time for a rethink. And a refund to loyal fans of the sums extorted from them over the years.
I’ve written to Lewis. I’m hoping he will drop the race issue now and take up the cry for Fan Reimbursment: Robbed Fans Matter.
5th May 2021, 18:03
He sure lives rent free in your head.
5th May 2021, 13:26
The only factor I would add is how the world of media has changed and competed with f1.
there are loads of factors though, some of which we can’t or should not control like how schumi raised German ratings (as hinted in the article)
Looking at the factors we can control and as an existing fan, In my view a big hidden factor for the enjoyment of f1 is the quality of the camera work and it, is horrendous these days, hyperactive and zoomed in.
Going through the old races on f1tv I get glued watching any old race, the onboards don’t distract the viewer with overlays nor worse of all, cover the car, I can’t see the right tyre with the overlay they use today.
On f1 tv I wish we had more Qualifying sessions, especially from the 1h format, Q was the best way to get a good look at every single car.
I know the cars are quicker and more difficult to catch and the drivers often look to be driving 80’s non-refuelling turbos, or in other words pacing themselves, so shaky cameras and cruising drivers make f1 look like a bad action film.
One would expect modern tech should help, better resolution, more cameras, different angles but in the end ho watch f1 digital clips on youtube, it was bad then and it is bad now, we have lost the beauty of watching a car lap around. On f1 tv the picture quality is not good, relatively speaking, the image is oversharpened, the audio is heavily compressed and artificial.
Watching f1 today is like following f1 on the radio whilst looking at a graphic equaliser.
6th May 2021, 9:24
I’d be so much happier if they stopped zooming into the whites of the drivers eyes, @peartree. You can’t see the attitude of the car, and I can’t see what there is to be gained by zooming so far in. I want to see the lockups, the missing of an apex, etc., none of which is possible with the current camera work. It’s awful – like someone who’s found a new function on their latest gadget. “Oooh, it zooms in this far. I’m going to do that AT EVERY OPPORTUNITY NOW.”
8th May 2021, 13:11
And it is so much worse during the soft tyre runs in fp and during Q. Thanks @bradders for exposing this issue this concisely. Cqn I fit this paragraph as a nickname.
Sacha Gortchakoff (@gosac)
11th May 2021, 17:14
You Guys are SPOT ON
Red Andy (@red-andy)
5th May 2021, 13:27
The thing that strikes me most about the eye-watering sums of money involved is – where has it all gone?
For other sports that have cashed in on pay TV rights in the last couple of decades, there is a clear(ish) trail that shows at least some of the money going down the pyramid towards the grassroots. But you would be hard-pressed to argue that grassroots motorsport has benefited from the F1 pay TV boom.
Other sports can at least argue that TV revenues have made a tangible difference to the sport at all levels. In F1, it seems to be motivated entirely by greed.
Alianora La Canta (@alianora-la-canta)
5th May 2021, 14:20
It’s all gone into F1 itself, one way or the other. Other series are expected to fend for themselves.
Red Andy (@red-andy)
5th May 2021, 17:30
I think that, during the CVC years, rather a lot of it was funnelled out of the sport.
6th May 2021, 9:25
Agreed. I suspect Rugby Union is going to get a shock once they’ve realised they’ve been dancing with the devil.
5th May 2021, 15:20
Haven’t you heard?
Its gone to global warming initiatives, helping the developing countries, fighting world hunger and helping with third world dept…. If you didn’t know it, Eccelston and Mosley are quite the philanthropist-akers.
5th May 2021, 20:29
The idea that the big pay TV deals benefit grass roots in other sports is arguable at best. Take cricket as an example – would they trade the huge potential fanbase they squandered in the mid-2000s for what they actually got from the Sky big bucks (fancy training facilities for the international team and some grounds with good drainage)? I think they would. Sky removed cricket from casual fans at the exact moment it was becoming widely followed by casual fans (2005 ashes, the last series on FTA in the UK). The upshot is that the actual grassroots never benefitted from the fleeting increased popularity. That is to say nothing of lost sponsorship revenues.
All sports need to be seen to be loved. Pay TV is the worst of worst of short term economic follies. You might argue football has survived being on Sky for years but football is everywhere and on FTA TV all the time when you think about it. Interestingly, when the Champions league went off FTA the popularity dipped among younger fans. They don’t care (they can’t care) if they can’t see it. Six Nations rugby too seems poised to ignore the lessons of F1 and cricket and it’s a real shame.
5th May 2021, 21:09
Of course in the cricket case that happened because the rights were sold before the 2005 season at a time when ratings were mediocre and whilst the coverage was excellent C4 bosses wanted matches starting earlier and earlier so not to disrupt The Simpsons or Hollyoaks (incidentally the reason why Jimmy Anderson’s first ever test wicket was not shown live in the UK). In those circumstances I don’t blame the ECB for taking the deal on offer at that time. If Glenn McGrath hadn’t stepped on that ball who knows if we’d have had that amazing summer! Their bigger issue was getting into bed with Allen Stanford and dithering about an IPL competitor for over a decade and ending up with the Hundred before getting any FTA cricket back again.
A FTA/PAY mix is clearly the best option for many sports and I think come 2025 it will be interesting to see what happens in the UK. BT seem like they are done with sport (looking to sell) and a detente with Sky has already been reached with them selling each others channels so that intense rivalry that Bernie milked won’t be there. Unless who ever buys into/takes over BT Sport fancies launching another war (and inflating all rights not just F1 further) Sky won’t be wanting to start splashing the cash. Comcast already seem to be trying to NBC-ify their coverage and squeeze every penny they can out of the current deal e.g. adding advert breaks between quali sessions.
Negotiating over F1 TV Pro is clearly the big thing for Liberty do they agree for it to be bundled it with their pay tv partner (like Sky in Germany) or accept a reduction in return for being able to sell it themselves. I think they’ll be focusing on that more FTA exposure but in an ideal world they’ll at least go back to their previously stated preference of a 70/30 split in favour of pay tv.
5th May 2021, 13:36
Finally!!! At last, the nail as been hit on its ugly head! Will it make a difference? I doubt it, greed is a tough beast to kill. Great article Dieter.
Barry Bens (@barryfromdownunder)
5th May 2021, 13:41
Living in The Netherlands, having to deal with Olav Mol for the last few decades may have been the biggest issue I’ve ever had with only 1 channel showing F1 here. Which is why I’m very grateful (but also somewhat surprised) is that Ziggo (broadcaster of F1 here) made a deal with the FOM to get F1TV for free if you have the F1 package from Ziggo. Meaning that yes I pay for F1, but I can actually listen/watch the British version.
The only way for F1 to return to non-ppv (subscription based) over here would be if Verstappen retired from the sport. It’d be great as 99% of the country would lose interest in F1 as they will only watch when a countryman does well.
5th May 2021, 13:57
The fundamental problem is that F1 carries the weight of $9.0 billion of invested capital on Liberty Media’s balance sheet, and in return for F1 revenues servicing this invested capital Liberty provides almost nothing to the sport.
5th May 2021, 14:27
Honestly I’m glad more folks I know who subbed to Sky are seeing how much of a scam it is for us. The rise of F1TVPro makes you question why we pay easily £45+ for wider Sky package to watch F1 when other equally developed & rich countries get it (& tonnes more features) for low as £5-£15 a month. And now Sky is throwing in more & more Ads & milking us despite paying top £, they’re taking liberties as PPV is one thing but explosion of adverts would be the deal breaker for me, it’s what separates us from the horrid American tv experience. Personally since moving out for university & work I’ve cancelled my Sky F1 plan at my parents as it makes little sense to pay for a wider Sky package that isn’t needed in the current world of online streaming, I know this is how Sky make their money back by having a monopoly on British F1 fans who have to now use them for broadband/TV & pay extorniate sums, But it isn’t for me-I won’t return. I saw you ask this question to Carlos & Lewis, It would good to see Lewis say it as it was instead of back away & tow the company line that the new CEO seems to be forcing on everyone. I got into F1 in the dying days of BBC around 2009-2011 as did many people I went to school with, As we generally udnerestimate just how sports mad a country we are, people always somehow tuned in for the interesting races even if they’re not online to post about it or follow every detail. Lewis said he might not even have got into F1 if it was not free on air, And the same could be said for me as the initial contact just wouldn’t have occurred. Even now you can watch a YouTube highlight or ‘stan’ a driver, But you’re not really buying into the full F1 experience that will likely keep you watching in the long run if you never follow the races live. Having said that, we do live in a era of paying for things, And I would pay £10-£15 a month for F1TVPro for the live coverage, camera angles, live data & zero adverts etc. As would many people I know. Also it’s very clever of Sky to use ‘record F1 viewing figures’ headline to get more subs when the truth was that they showed Bahrain on their main event Sky channel open to all customers on a weekend during basically no football (int break) & other sports whilst we were all in lockdown before the pubs opened…..If anything all it shows is the appetite to watch F1 if it was still free, and this was partly still behind a Sky paywall in a way just not the F1 channel.
David BR (@david-br)
5th May 2021, 18:20
I checked from here (Brazil) and ended up signing up, five dollars a month for F1TVPRO. Or thirty-five dollars for a year. That’s probably realistic enough for your average Brazilian fan (and there’s no Portuguese version for the Brazilian market) but still it’s a big difference. UK viewers are getting fleeced.
5th May 2021, 21:22
I’ve also seen that question and I have to say listening to what Carlos said surprised me. Viewing figures in Spain are worrying, they’re at an all time low (talking about recent times). I don’t get why he doesn’t seem to care that almost no one from his own country are watching his performances (he sure carries that Spanish flag proudly) and accepts it all as “part of the business”.
It’s not, in my opinion. Especially in Spain, it’s short sighted greed. F1 isn’t Netflix, it isn’t even football, least of all in Spain. If they carry on like this, interest in the sport will reach zero, or very ridiculous numbers and then no channel would be interested in paying a penny to be able to broadcast the races, because if no one’s watching, why bother? Then he’ll see what’s “business”, when F1 (and therefore his career) will be ancient history and irrelevant old news for everyone around him.
I think drivers should speak up against this more clearly, but clearly they don’t seem to care much.
5th May 2021, 16:17
I’ve always argued that the move to PPV/Subscription model for F1 is fundamentally flawed as it isn’t a sport that many fans “play”. Football, Rugby, Cricket etc. manage to generate new fans by the virtue of people playing in teams in amature clubs, schools or informal street/park games. This exposes them to like minded individuals so the professional sport spreads via these networks, alongside the fact that many sports teams have a local connection (Area, Town, City or Region) which means there is a concentration of support for a team.
Obviously other indivudal sports exist but I would still argue the majority of these drive their fan base by casual participation – golf, tennis, cycling. I find it no coincidence that the increase in popularity of road cycling as a hobby/sport in the UK over the past decade has seen a huge uptick in viewers for the Tours.
Now F1 is in oddity that outside of a bit of Karting that some of us may of done our interest in F1 doesn’t come from running motor vehicles ourselves round a circuit. It was witnessing the races on TV, usually on the prominent national broadcaster or major rival (BBC and ITV in the case of the UK) that has driven many to be life long fans. Thus long term it can only be in decline without a prominent exposure to a wide range of eyeballs.
5th May 2021, 16:39
@dieterrencken Another wonderfully informative article. I especially like your inclusion of something such as You Tube, as my closest youth in my family are step-‘children’ and nieces and nephews all in their 30’s and not even all with TVs, and none of them with satellite subscriptions. In my case here in Canada I consider myself on something as close to TV F2A as is now possible, if it can even be called that, in that TSN covers Sky for us here, and TSN is available on even the most basic satellite package. So, while our satellite package is still not cheap, running us about $1200 Canadian per year for all the channels we subscribe to, it is not like we have to pay any extra for TSN.
Something else that I wonder if you could do an article on that ties in with this, and that fascinates me, is how the product on the track affects viewership as well, and how Liberty’s moves, along with the teams signing off with budget caps and fairer money distribution that should result in a lesser gulf between the have and the have less teams, along with cars able to race more closely, making it more of a driver vs driver series, might affect viewership (sponsorship, influx of money, potential new teams).
I particularly twigged on your second last paragraph containing LH’s quote, including that “it’s the fans that make the sport what it is.’ Fair comment, but I juxtapose that with the concept that the fans fall away when one team dominates, and I suppose it is no better to have one driver dominate on one dominant team. Oh I know sometimes that is just the way things fall into place, but of course often that is very intentional. I know we can’t always have Senna/Prost, but at the same time I get discouraged when the likes of Mercedes and LH fans, just as an example, through their unwillingness to have LH challenged on the team for all the peace that it garners, as well as so many fans resigned to the concept that teams do the right thing by having a lesser driver not rob points from a primary driver, only does a disservice to F1 and it’s popularity overall. If it is really about the fans, shouldn’t all the top teams strive to have only the top drivers there? Such a shame to me that in order for a team principal to have a little easier life managing his drivers, the globe gets a lesser product on the track.
So while I realize it might be naive to expect anything less, I sure do hope that fans get to see a much better product on the track due to Liberty’s work when the teams themselves can’t be trusted to really consider that the fans make the sport, when they often resist providing us the best rivalries they could. One concept that has intrigued me last appeared with BAR and their zipper car. They ideally wanted their two major sponsors to each have a differently coloured car. That has happened in the past, but was rejected by BE for BAR as that would be ‘too confusing’ for the audience. But the major spillover and imho benefit, if they would allow teams to have two major sponsors with two different liveried cars, even just somewhat differently coloured enough to be aware of the two major sponsors, is that one side of the garage would be less likely to be marginalized as the designated or even natural number two car/driver, as the team overall would not want to hang one major sponsor out to dry in favour of the other, which might make them want only the very best drivers they can get their hands on, and let them go at it fair and square, and yes, with all the contentiousness that can bring, as well as an enthralling, less predictable product on the track.
5th May 2021, 18:58
That’s not going to happen. liberty media is going to squeeze F1 for all its worth and free TV isn’t going to exist in the near future. Pay to play streaming services are where everything is headed.
5th May 2021, 19:24
A global sport needs the globe to see it. Otherwise it’s not a large enough platform for brands to invest their millions of dollars in sponsorship. Simple.
5th May 2021, 21:35
As far as a lot of the sponsors are concerned it probably doesn’t matter if people who won’t pay to see F1 on TV because they are advertising luxury products that only 0.01% of the worlds population could afford even if they were willing to buy them.
Also when the most prominent sponsor appears to be the Saudi state oil company it doesn’t seem like F1 is as interested in attracting viewers as attracting cash.
6th May 2021, 11:40
I like to think I’m immune to sponsorship but I can think of two brand examples that breached my defences, both from Red Bull.
I had never heard of Geox before and over the course of a season seeing their name on the car each race, became curious enough to do an internet search. I actually ended up buying a couple of pairs of their shoes as their technology USP appealed to my inner geek.
The other brand unknown to me was Infiniti. I made some casual remark at work about yet another obscure financial institution spending money on F1 only to be mocked and told they were actually a luxury car manufacturer. I did not buy one or two of their cars but I do now know who and what they are, which I didn’t before.
The dual points of this post are, not everything painted on the side of an F1 car is unaffordable to all but 0.01% of the population, and just being there can raise brand awareness (which I believe is the sole reason Haas chose to enter the sport).
5th May 2021, 19:51
The missing factor in all of this is whether the PPV channels are seeing any return on their investment.
If when the deal is up for renewal Sky are looking at a continued decline in viewers, are they going to pay anything like the same rates? Of course not.
Furthermore, in the UK at least, there isn’t a surfeit of PPV options that will pay big money to take F1 from Sky. What’s Liberty going to do then? (Probably desperate measures like reverse grids, fan boost and sprinklers.)
5th May 2021, 20:08
As someone living in Australia, I’m curious as to what others in this country are currently using to watch the Grand Prix. I currently have a Kayo subscription which costs about $25 (£14) per month. I don’t really want to get a whole Foxtel subscription as F1 and MotoGP is the only thing I really watch on TV (I get Optus Sport already for Premier League football).
5th May 2021, 20:42
Doubt free TV will happen, but re-runs in the week would be a nice compromise. Then you have all 3 covered. Free, pay, and F1TV.
Very good article though.
5th May 2021, 21:03
I think F2A is a thing of the past across the board, be it F1 or any other content. The direct to consumer services are taking over (Netflix not being mentioned in this article surprised me). You don’t get to see movies on F2A tv until 2 or 3 years after they were in the theater either. Same goes for high end tv shows. Seeing the prices paid for Sky in the UK I can understand why you would want to go back but you cant forget that F1 coverage when free to air was so poor it didnt serve the mainline fans as you called them. I would get a satelite dish in the Netherlands just to get to watch Free practice either on BBC or German tv. I think the future is more direct to consumer innovations with social media & docu series playing a huge part in the promotion. The people that are willing to pay get to see it live, the people that cant pay will see HL it for free on social media or F2Atv like it has become now. The arguement of more sponsor revenues being available because more people would watch goes against the fact that most sponsors are in F1 to entertain guests for which capacity is not going to expand by being on F2A. Also sponsor or advertising income is a less sure stream of income than tv rights. Marketing dollars can easely be moved arround whereas TV rights can be negotiated in the longer term and are spend in a smaller market.
5th May 2021, 21:28
I’m sure Liberty have done the math on this already, and evidently it’s come out unfavorable for F2A. It’s easy enough to see how F2A would benefit teams, tracks, sponsors and fans, but it would be riskier for Liberty, and unfortunately they are in charge. And I don’t see Liberty leadership (or whoever may be the commercial rights holder in the future), who are used to being the kings in their own little fiefdom that is F1, chaining themselves to a behemoth like YouTube, even if it does potentially increase revenue. Also, a lot of this article assumes that whatever was lost in the move away from F2A can be regained. It’s possible, but I imagine it is equally likely that the world has simply moved on.
5th May 2021, 22:47
It’s really very simple. People aren’t watching because it’s boring.
If it was worth paying for, people would pay.
Stop managing tyres.
Stop managing fuel (and let’s stop pretending the cars are running equal AFRs…).
Stop Hamilton’s faux-humility at the end of every race because Mercedes has the best fuel economy.
Bring back the spine tingling noise of yesteryear.
Bring back Steve Jones on C4F1, too.
5th May 2021, 23:56
Excellent article as usual ! I think the situation improved a lot in the MENA region recently as a result of the Qatari-Saudi/UAE conflict. Bein Sport gave up F1 rights in the region, they were losing subscribers due to the piracy (BoutQ). MBC group has bought the rights and chose to broadcast the races free-to-air on their MBC Action channel.
As for my personal experience, I have been extremely lucky having had the chance to watch F1 since the mid 90s as we had both free to air (TF1 & Rai 1) and subscription channels (ART, Canal+…) at home. I really liked watching F1 on Rai1 not because of their exceptional coverage but because I like Italy and I’ve learned to speak Italian watching the Italian channels.
However what really made me interested in watching F1, apart from Ferrari and Schumacher, is the F1 Digital+. I remember watching it in Canal+ and in the Scandinavian channels Kiosk if I recall correctly. The multiple screens and the onboard cameras were a joy to watch for me personally and was an experience that was never replicated.
6th May 2021, 0:37
@dieterrencken, have you considered my point that saturday sprint races may be used to attract new fans by being f2a tv, youtube etc. As an additional race it will (may) not be tied into ppv contracts and should be fast and furious enough to capture young fans.
Dieter Rencken (@dieterrencken)
7th May 2021, 6:39
I’d heard they were planning to use it as lever to up PPV fees…
6th May 2021, 1:12
It’s just british business issue. Britain has BBC that can solve it. Most around the world F1 is on public air. So i’m watching it on official online stream here.
Jay Menon (@jaymenon10)
6th May 2021, 2:49
I am sceptical with the return to F2A. In its current form, I just cant see it happening.
Terrestrial TV companies the world over are hanging for dear life and dare I say, rapidly losing the battle to stay relevant. A significant proportion of national populations dont even watch TV. The only time the TV in my house is switched on to a terrestrial channels is to watch Masterchef (yeah ok!) and in recent times, for local COVID updates.
Ultimately, even if the F2A model works out commercially by way of increase advertising and promotion revenues, I would assume that TV companies will still be required to cough up some sort of fee to broadcast F1. How much can/will they pay? Considering how they aren’t exactly flush with cash, the bulk of the money will come from advertising, meaning that there will be loads of adverts during races.
The YouTube option may work, because it is technically free, as long as you have a device and an internet connection. However, many places in the world doesn’t necessarily offer stable and fast internet speeds (even here in Australia it can be hit and miss!). Youtube is heavy on adverts, however, for willing fans, perhaps a YouTube red membership will offer the stream advert free?
The Netflix/Amazon/OTT method probably stands the best chance of drawing in a newer/millennial/Gen-Z crowd, as most of these people are already subscribed to one or more of these platforms. Its quite clear that Drive To Survive has sparked interest in the sport, if the product is available on the platform, a lot of people will watch it. However, it will be interesting to see how they pricing is packaged.
I guess there isnt a straight forward answer. All we know is, the current model does not work and needs to be addressed, exactly what the solution is, is unknown at this time.
My proposal would be:
– F1 to merge F1TV with Netflix (since that relationship is already there via DTS).
– Offer subscribers the choice of upgrading their account to allow streaming of live F1 Races (with different levels access costing more).
– All normal Netflix accounts to have access to F1 race highlights
– At the same time, offer the option for Terrestrial TV operators to broadcast delayed telecast and or highlights to rural areas/or states lacking internet infrastructure at a cut price
6th May 2021, 8:16
@jay-menon, Hi, Youtube ads are only 15 seconds and are spliced into, not over, the content, I can accept that.
6th May 2021, 12:08
Netflix, Sky, Amazon, F1TV – it doesn’t matter if you cover the product with red glitter, or blue or green or yellow glitter, you’re still trying to charge £30-£40 a month for it. Convincing what was already a niche audience that something that they had received and enjoyed free for years is worth that is an unwinnable battle. 15%-20% might be convinced but the rest wont be.
PPV is ultimately like a swarm of locusts. Once it has voraciously consumed all there is to consume, it will leave the field barren and move on in search of the next crop to devour.
6th May 2021, 3:32
To be honest – who even watches FTA TV any more?
The bottom line is Liberty will sell the broadcast rights to the top bidder – they don’t actually need to care about eyeballs because they get paid regardless. Its the broadcasters that make the decisions on how much to pay based on what they “estimate” the number of eyeballs will be.
It flows on from that then that the broadcasters (SKY in particular) will do absolutely everything in their power to influence Liberty into bringing about gimmicks that they (the broadcaster) think will increase viewership to justify paying for the broadcast rights.
So what we have is two very separate vested interests with differing motivations for change that have no interest whatsoever in what F1 represents, its DNA etc.
6th May 2021, 8:20
I do! but not the commercial crap.
6th May 2021, 5:10
If F1 wants to make an attempt at attracting new fans through Free to air content, then they can probably sign deals with media majors in populous countries like China, India and Indonesia and air one race from the archives every week on terrestrial F2A TV. When i say archives, I mean the more recent ones. That way, if a fan gets interested by what he sees on f2a and decides to jump to subscription, there difference in the content with respect to the driver, teams and regs is lesser than otherwise.
This way you can better monetise your outdated content and also improve fan base.
6th May 2021, 5:50
Brilliant article! Make sure Stefano Domenicali gets a copy…
6th May 2021, 7:10
They should either put it up on YouTube for free worldwide or go with a modest subscription in a deal with someone like Amazon Prime (again globally). Make it a truly worldwide sport and easily watchable by the masses and watch it become more popular again. The ratings drops in places like the UK is just despicable quite frankly. Bleeding a hardcore fan base dry and losing millions of eyeballs on the sport and this eventually interest wanes doesn’t feel like the cleverest of moves if you want your product to grow. Football can push these boundaries because it is THE sport of the nation. F1 used to be that but it never had the pleasure of being bullet proof, it got by thanks to the novelty of F1 and the fact you could watch it for free. The minute you put up a large money barrier and it was too much for the casual viewer.
Hopefully Liberty don’t extend with Sky and give us more sensible options.
6th May 2021, 8:19
Bernie was only interested in the short term once he decided to cash out.
6th May 2021, 9:09
I believe that ending free to air is what fundamentally destroyed the sport as we knew it to that and even this day.
Williams is a victim of it, Sauber was almost a victim of it. And so are numerous other small teams.
Without FTA there are high barriers to entry to view or sponsor the sport and therefore wealth, power and opportunity will concentrate at the bigger teams. Making it impossible for smaller teams to compete.
The way to have solved this, is increase revenues and imho the only way to increase revenue is technical regulations that enable the cars to race eachother rather than just follow each other, like we had the last 30 years, and by the addition of FTA. So that people can actually watch the sport.
Paid TV made the FIA and FOCA lazy, the money was coming in so the flaws didn’t need to be fixed. And through that we have almost got a sport with only 3 competitors…
6th May 2021, 11:13
Another problem with Sky is that it’s an inferior product to what was offered by F2A broadcasters on C4, ITV and the BBC. It’s one thing to be forced to pay for F1, quite another to be forced to pay for worse service. The programme is so bloated with too many pundits and too much waffle, it’s off-putting. I hope F1 will return to the Beeb one day.
Alec Glen (@alec-glen)
6th May 2021, 13:26
Liberty have to be looking at the NFL as the best example of how to maximise tv revenues. The numbers they’re able to generate both in viewership and pure dollars are insane. They’ve just signed a set of deals that will net them $10bn a year for the next 10 years in the US alone.
What do the NFL do? Free to air TV…
Sacha Gortchakoff (@gosac)
12th May 2021, 7:52
There is no other reason apart from short-term profit maximisation, at the cost of lesser longterm profits.
Those who want to grow a sport the longest, the steadiest (= the highest) they surely will go for most eyeballs.
It is not more complicated.
Yes, sad, agreed.
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