Everyone knows that Formula 1 brings in a lot of money from TV rights revenues, but how does the sport compare with others when it comes to what TV companies pay per event?
The TV rights to any event are initially owned by the venue. In the case of sports teams that have their own grounds, what generally happens is that all the teams in a league will join forces and use collective bargaining to get the best price from the TV companies involved. In the case of a sport like motor racing, where the venues are not run by the competitors, the right to exploit the TV is up for grabs. In Formula 1, the Formula One group managed to get control of the TV rights, which were once controlled (but not owned) by the teams. The FIA is deemed to be the owner of the rights, in that a venue cannot get a World Championship event without the FIA agreeing to it – and that agreement means that the TV rights have to be signed over. The federation chose to have its commercial dealings done by a private company, rather than having its own division. People may say that the European Commission would not allow that, but this is not strictly true. The Commission was only ever involved in F1 because there was a complaint about the way things were done. If the FIA wanted to set up its own commercial division when the existing rights deals are over, it could do so.
In NASCAR it is the sanctioning body that negotiates its own TV deals, but it gives the venues a large percentage of the money and the venues and the sanctioning body together pay prize money to the competitors.
There are many different business models to be found in other sports, depending on who has been doing the deals.
One reads of massive TV deals in soccer and American football, which are reckoned to be the biggest sports globally and in the United States. And NASCAR too has had some pretty impressive deals as well, but how does it all boil down?
It is reckoned that each year Formula 1 generates around $600 million from TV revenues and about the same from race fees from its 20 events. That is a fairly easy calculation. Each F1 race generates $30 million in TV revenues.
Over in the United States, NASCAR is deemed to be pretty hot when it comes to TV rights sales and there has been much trumpeting of late about a new deal with Fox – which is owned by Rupert Murdoch’s News Corporation – that will bring NASCAR $2.4 billion over an eight-year period from 2015-2022. That is for the first 13 races of each season, including various non-championship affairs and the Daytona 500, which is the biggest rating race of the year. NASCAR still has a second package to sell, with 23 races on offer, including the 10-race Chase for the Sprint Cup at the end of each season. The current deal is shared between The Walter Disney Company’s ESPN and Time Warner Inc’s Turner Broadcasting System. It is worth $4.48 billion, but the talk is that a new deal will bring at least $6 billion because the new NBC Sports Channel, which is owned by the Comcast Corporation, wants a piece of the action. If one assumes that the two deals when completed will bring in $8.4 billion over eight years for the 36 championship races, one can calculate that NASCAR pulls in $29 million a race, which is not far short of the F1 figure, although the sport’s reach is much smaller than F1 because its international sales are relatively small. However US television companies are much more switched on to advertising (which is almost constant) and so TV companies can make more money from each programme than in some other countries where the culture is different.
Premier League soccer in the UK has recently done a series of new global deals that are expected to bring in as much as $8 billion over a three-year period covering the 2013-14, 2014-15 and 2015-16 seasons. This breaks down to $2.6 billion per season. Obviously these are higher numbers than Formula 1, but there are 380 games in a Premier League season and so the value per event is only $6.8 million, a third of the figure of F1 and NASCAR. That said, viewing figures are higher because of the number of events.
When it comes to the National Football League (NFL) Sumner Redstone’s CBS (which is part of an empire including Viacom, MTV and Paramount Pictures) shares the TV rights with NBC, Fox and the Disney-owned ESPN. Together they will be paying $39.6 billion for the TV rights for the NFL between 2014 and 2022, a nine-year deal with 256 games per season, which breaks down to the relative modest per-event total of $1.7 million.
There may be higher numbers generated by occasional competitions, such as the Olympic Games and the FIFA World Cup, but when it comes to regular leagues/racing series, Formula 1 comes out on top!
And one of the lures of the US market for F1 is that if it can ever grow to a marketable level, it could get its hands on some sizeable rights payments from the big US media players…
joeblogsf1 
Joe, if/when F1 makes it big in the US and starts pulling in good money from US broadcasters, do you think this will result in a reduction in ticket prices for races (either by reducing hosting fees, or giving some TV revenue to the venues)? Personally I highly doubt it!
I don’t think anything will result in a reduction in ticket prices, even if demand reduces. The only way that will happen is if F1 goes to bigger venues (such as Indianapolis Motor Speedway) where there are huge numbers of seats and sufficient mid-range demand.
Ticket reduction, lol, oh me oh my. How devilishly funny. Just the thought of passing back some revenue to the fans via reduced ticket prices on the back high success, or maybe due to a falling demand, will not happen. In the event of either situation, there will NEVER be a change to prices. This is F1… There is no heart, logic, empathy or even standard pricing economics appled to the corporate / commercial side of F1. Why do you think people like Adam Parr get kicked out and others like Flavio Briatore can have long and successful careers in F1 (barring Singapore 2008).
Joe, you are quite correct about the advertising. It drives me to distraction when watching any motorsports. However, realizing that advertising does interrupt the continuity of a race as there are no time outs, even though it can be argued that NASCAR’s constant yellow flags constitute a time out, The broadcasters here in the US have begun to use “side by side” advertisements, where the race can still be viewed in a PIP format while the ad is being shown.
The drawback to this is format is that the broadcasters seem to use this to justify more advertisements. In fact, there is getting to be so much advertising; roughly fifteen to twenty minutes per hour of broadcast time, that many people are forgoing traditional methods of viewing television by resorting to Netflix and the like, which allow an internet connection to be streamed to the television, thus no advertising. Even racing (V-8 Supercars, ALMS) can be viewed relatively advertising free.
You mentioned Premier League Football. Happily, there is a Fox Soccer Channel available in the US, and happily, each 45 minute half is broadcast without interruption, so no action is lost; one reason I’ve become a fan. As for the big four broadcast companies (ABC, NBC, CBS, and FOX), I hardly ever view them, with advertising becoming more and more pervasive.
My point being that many people are bored by the constant barrage of advertising, and there is a tipping point at which viewers will no longer watch.
My hope is that NBC Sports, who will now take over F-1 telecasts from SPEED, a FOX company, take heed and find a way to be able to make money, but not interrupt the racing. From what I notice on the blogs, a lot of US folk are streaming BBC broadcasts of F-1 rather than missing the inevitable “critical overtake/pitstop error while we were away” moments.
Personally, I wouldn’t mind a small banner line across the bottom of the screen, constantly pushing products, while watching the race. One can only hope.
Streaming the BBC won’t have worked in 2012, given half of the races were highlight shows.
The BBC isn’t the only broadcast you can stream.
Really interesting for me to read of your experiences and fixes for watching ad free sports events on TV…crazy! US TV seems to push the envelope massively in terms of “cutting in ” to live feed. Wow. I couldn’t imagine ads during a football match although your idea of an active banner on the bottom of the screen sounds like a good compromise to me. With where we all are in terms of interactivity though I often wonder why we can’t ask for the types of product or service ads we want to see to help us make choices. So for instance:
I’m going to watch a GP, I’m interested in buying a new washing machine, I need a new insurance quote for the car and I’m interested in what new deodorants are out there (?), I could tap that into a console and then watch the race and be bombarded with ads I’m actually interested in! What I find really annoying is the repetitiveness, I know it’s part of the concept but I find it makes me switch off in terms of adhering to a brand.
We already have interactive advertising on the internet, every time you fill out a “survey”, or view sites from different products, you’ll notice your gmail account fills up with offers and coupons from those products. I truly wish we had television options like the BBC. The PBS we have here is rather like the poor american cousin. It is woefully underfunded, and there is no programming continuity, although they do some things right, because we are getting season three of Downton Abbey now. Most Americans now pay for either Cable TV service or some form of Satellite service.
When I look at what NBC Sports has done with the MLS package they bought last year, I’m hopeful for the F1 coverage. They’ve done a great job so far.
As for rights money, Joe, take a look at what US Broadcasters have spent, going back to 1990, for World Cup rights. That number has climbed at a rate faster than anywhere else. If memory serves, FIFA makes more from the US (both English & Spanish rights) than anywhere else now. I’m sure Bernie would like the same to happen…but it may take a while. 😉
I’m no doubt a rather unusual American, since NASCAR is probably my least favorite form of motorsport. I watch a LOT more F1.
I do have to say that I much prefer the side-by-side advertisement usually used for NASCAR than the complete interruptions for ads which happened on the Speed coverage of F1. I wonder if NBC will switch to side-by-side. Does Bernie have any say about that.
I almost always watch F1 Practice, Qualifying and the Race with my trusty iPad running the F1 Timing app. And I always try to synchronize that with the TV, there always seems to be a slight delay measured in seconds, even for ‘live coverage’, and, for Speed at least it was worse for quallie since they did about 10 minutes of lead-in before running Q1 at least on a delay, and I had to re-sync for Q2 and Q3 since they used the time between sessions to gradually catch up.
I’m wondering if the move to NBC will improve this as well. Fingers crossed.
Annual TV revenue per viewer would be an interesting comparison. On your numbers, the annual revenue (assuming zero price escalation) is:
F1: $600m
NASCAR (current deal): $860m
Premier League: $2,667m
NFL: $4,400m
But I can’t find good TV audience figures for these sports.
So, are you saying F1 gets 600 Mil from all the countries it’s broadcast in?
UK, US, Japan, China, France, etc?
And then comparing that amount to what sports make off their TV deals in the US exclusively? If so, you’re grasping at straws IMO.
Even Obama Phone folks have 150 channels of distraction to watch in the U.S. Compare that the half the countries that pay for F1 to be broadcast on their state run channel, with no competition.
In the free market world of entertainment, F1 is small potatoes.
Don’t be silly. US sport barely exists outside the US in tv revenue terms. You obviously don’t get out much.
I get out when I need to. I went to work today….
I don’t believe I’m being silly when I point out that NBC is paying the NFL 950 Million a year for Sunday Night Football. That’s 1 game a week, for 17 weeks.
If you really want to have a nice blub, you can read your recent article and compare what Williams F1 is valued at, and then Google what the Dallas Cowboys are valued at. Small potatos…
As for US sports not being on the international radar, that just means that there’s plenty of potential fans out there in the world. I believe F1 has plateaued and will be on the down slide as more and more entertainment options are available to the rest of the world, as they are in the U.S.
BTW, I understand that the Cowboys and a couple other NFL teams are pretty popular in Mexico. Look out F1… 😆
Here’s a nice explanatiion of why the NFL and sports in general are valued TV property in the USA. : http://online.wsj.com/article/SB10001424052970204026804577098774037075832.html
Sincerely,
jim, the “Silly Hikikomori” 😆
I understood about half of this…
Do you understand that NBC paying 950 Million for 17 games a year in 1 country stomps the living !@#$ out of a bunch of networks paying 600 Million for 20 races a year globally?
Do you understand that the reason the NFL can pull that kind of dough is because it’s the only thing that can pull a huge audience, now that there are so many channels and other entertainment options?
Do you agree that Williams F1 is one of the most storied teams in F1, and is worth less than 1/2 of what the least valuable NFL team is?
Source: http://www.forbes.com/nfl-valuations/list/
Do you agree that the current F1 demo is heavy with gray hairs and it isn’t attracting the younger crowds in sufficient numbers to replace the gray hairs?
Do you think that as the rest of the world gets more and more entertainment options, F1 won’t lose viewers?
Just my glass half empty view on the F1 tv rights situation.
YMMV
His comparison is accurate actually. The U.S. market is the most lucrative by a big margin in the world. NFL/NASCAR can have such massive deals because the US media market is so large. F1 is tiny in comparison because it relies on global markets which are not as lucrative. F1 has other sports (global or US only) beat on a per event basis though.
The Premier League figure of $6.8m per match is a bit misleading – not all games are shown in full on television (although the $8bn total figure will include income for highlights packages which do – at least in the UK – include some coverage of all games, but not live, and could be only a minute or two for many games). UK rights for the 148 live games cost £3bn under the new deal, highlights only £178m. Not sure what the international figures are, but it would be fair to only consider the live games in your cost per event comparison. Think that works out at $17.5m per event. Still not quite as high as for each Grand Prix, but comparable, and for a much more ‘routine’ event than a Grand Prix (compare the number of media, spectators, size of venue etc at each and Grand Prix is much more of a ‘special’ event, I’d say.)
Of course comparisons are not exact, but it gives a good idea.
Even then at $17.5m per event – this still isn’t the value of ‘a weekend’ like F1. You can watch at least 3 live PL football events each weekend and still view less than the same amount of F1 TV coverage from Fri-Sun. So a premier league weekend and similar TV coverage to F1 costs more like $50-55m – far more than an f1 event.
Didn’t Adam Parr criticise Mr. E at the FOTA fans forum Canda 2011 for the relative paucity of F1 TV revenue and compared it to the money received annually by the Turkish Football League.
Hopefuly NBC Sports will do a better job than SPEED in the advertising front, it seemed to me that at least 30% of race time was ads. After the way that NBC handeled the colsing ceremony of the London Olympics, I’m not holding my breath though.
If the 2 US races manage to grow the following here, that should increase the revenues for FOM significantly and would probably bring in new sponsors for the teams.
Well the only opportunity for real change in the F1 business model is if the German courts go to town on the facts of the last rights acquisition by CVC and get it declared null and void.
Then there could be either a proper and decent bid for the leasing of the rights (instead of giving it away for 100 years for virtually nothing) or a major rethink and a scheme something along the lines of NASCAR where the circuits actually get paid, and make a profit, instead of spending the rest of the year scraping to support the outrageous F1 fee.
Was that intentional – “last rights…”. I thought it funny in any case! Apt?
Actually not intentional no, but I’ll take it.
If the German courts establish to their own satisfaction that a bribe was paid, then the deal done by the German bank must have been illegal. There is a gigantic amount riding on this, several other lawsuits for compensation against CVC apparently. To put it technically the whole big thingy could be brought down and all CVCs earnings from F1 become suspect and ownership restored to the previous owners.
Of course all that will happen is that a lot of lawyers will get very rich and spin it out over as many years as possible. (Having spent one’s life as an engineer/salesman, you eventually realise that the only really safe profession is law, it’s a win win win job)
Off topic sorry, but after reading the judge this morning I wonder if you have any news of rumours re Gary Hartman’s replacement or the reason for his sudden departure.
Or even Gary Hartstein. I hear it will be an Englishman but don’t know more.
Apologies, to Gary, brain not in gear!
Thanks Joe! great piece, I was worried you were about to suggest pay per view for F1. Given most of the F1 news over the Christmas break seemed to come from rehashed blogs from yourself and others, it could have been all we hear about for the next few weeks.
According to touringcartimes.com Arena Motorsport has shut down ( 1 year into a 3 year programme for a new car), with the Chilton family now focusing on Max’s efforts with Marussia. Can you validate the story? Could this have mean the family are considering buying into the team, as you suggested could be possible.
It gets very messy making comparisons with “team sports” – Premier League “soccer” and NFL “football” and so on might look like very cheap events to run but in terms of viewing figures I’d expect you get lower results for each individual “event” due to the very partisan nature of spectators.
And that’s if they’re available – deals within the UK see only 154 matches a season televised (at a cost of about $1.6bn for the UK alone, $10M per match) split between BT and BSkyB. That works out as something like 4 televised matches for the 38 “weekends” that the league runs for. Some weekends there might be 6, some maybe only one or two (Boxing Day football is one big clash really).
As an F1 fan, I can and will watch all the races. If you’re a UK-based “soccer” fan, only 15 televised matches (on average) will involve your team – more if you’re a fan of a big club, less if you’re a fan of a minnow.
In that respect, it never ceases to amaze me how cheap F1 is. The Beeb pulled out of all-live F1 for a reported saving of around £15M per annum on the broadcast rights – a quarter of its annual spend on football highlights.
A reasonable solution for a straight comparison between football and F1 popped into my head this morning, because all my best thinking is done in the shower.
BSkyB currently show all the F1 races live in the UK (half of which directly compete with the BBC live show, half compete indirectly with the BBC highlights show) and for the rights to do this they have reportedly paid “around £40M” per year. We’ll round up to £50M ($80M).
From this summer, BSkyB will show 112 Premier League games live in the UK (which compete both directly and indirectly with the 38 games shown by BT, and compete indirectly with the highlights show on the BBC) and for the rights to do this they have paid £760M per year ($1222M).
This leaves BSkyB paying for F1 races at $4M a race and for Premier League “soccer” for $11M per match.
An asymmetrical comparison perhaps.
The UK is home to the Premier League, the UK TV rights are still the lion’s share of the global TV income. BSkyB’s commanding position with respect to Premier League coverage is perhaps something they pay a premium for (they’re paying more per game than BT, by around 5%). They can possibly be reasonably confident that not everyone will have access to BT’s coverage and hence are only really competing with BBC’s highlights.
Conversely their valuation of the F1 rights will clearly take into account the potential for viewers with access to both streams to choose the BBC instead and the reduced pressure on F1 fans to subscribe, given that half the races are available.
There are counter-arguments too, The UK remains a major market for Formula 1, as close to a “home” country as the sport has. BSkyB grabbed a large chunk of the best of British F1 broadcasting talent, leaving them in a strong position to compete with the BBC coverage. F1 is rarely shown in pubs, meaning that F1 fans will be more likely to be forced to subscribe to Sky TV at home**. Premier League coverage has to compete, every weekend, with fans actually going to a match – taking around 400,000 people away from their screens.
A complicated comparison then.
** = Not dead sure how much influence this has. From a quick calculation, if I were to convert my parents’ home into a pub I’d need to have offset 20 Sky subscriptions in order to “lose” Sky any money because of the much higher pub rates.
“In Formula 1, the Formula One group managed to get control of the TV rights, which were once controlled (but not owned) by the teams.”
F1 tv revenues didn’t amount to a hill of beans before the enactment of the Broadcasting Act of 1990 that introduced real competition for the UK rights. The tv rights before then were like sunken Spanish treasure on the Atlantic ocean floor –everyone knew they were worth something yet no one took the initiative to do anything about it, bar BCE. The explosion in F1 tv rights income is yet another outcome of the deregulation policies started under the Thatcher govt. If not for this income stream, F1 would undoubtedly have remained a motley collection of greasy garagistes.
As far as NBC is concerned, it’s the NBC Sports Network, not the over-the-air network that is broadcasting the bulk of the season, and they can’t even get their Ivy league football coverage to work. It often lost the signal, and these are local events to their CT broadcast center.
Once upon a time, motor racing was about sport rather than $$$$.
It was always about the bloke with the most money.
A someone who did not forsee but saw the Sky for UK deal as likely before it happened, I can think there’s a lot of simplification possible, if that trend continues. Bear in mind that Sky brought real money to soccer / association football when it most needed to shed a terrible image. In the days of triple or quadruple play (landline / broadband / mobile / television) there is fierce competition because three of those are increasingly commoditized, so the prize goes to the sports.
I don’t think Ole Rupe more difficult than Bernie. But Bernie is not institutionalized, and NEWS is very well organized. It might not be so bad a thing. It has started to make sense to me for a number of reasons, being: continuation; broadcast revenue leverage; ability to cross subsidize promotion costs of broadcast; infrastructure (Sky really does have slick things, and piles in); and above all promotion.
There’s more, but when you see Sky hitting up F1 posters in bus stops in the darkest East End, they are trying. That could end up being very positive, and compared with “10 teams is enough” from BCE lately, I doubt that would be the idea. Also, Sky could, if needed, eat CVC (ex Citibank) if they had to.
The entire attitude at Sky is very long term. I think F1 needs long term. Right now, and fast. It’s not a impresario’s game any more. Also I like the amount of other motorsports I get through Sky. I just reckon they can sell to the addicts better than any other. Please don’t get me wrong, Sky is pricey. It’s a lot to swallow, if you’re not prepared for the bills.* But if the FIA (my typo before corrected was FISA, oh, my . . ) can up-sell, can that money bring back other motorsports we liked?
I would be far happier paying for top tier F1 and see the rest of the four wheeled world getting support by the by. Can JT do that? No idea. Nobody can ensure it. But if Ole Rupe has his eyes on something, his MO has been always to pile in with enormous investment, break the bank stuff, on his own penny. That’s the opposite really, of Bernie. Therefore, I’d not dislike the change.
*Nota bene, my Sky sub allows someone else to tune in to whatever they want on their PC or iPad, no surcharge. That alone is really neat, means I can call up a mate who is travelling, or has not Sky, and they can watch with me. That is a nice thing, really, not a fillip for the expensive sub, F1 could use that.
You’re probably right (I’ve said so below) but, unlike cricket (which is still covered by the BBC – sort of) and football (ditto plus ITV) F1 would more likely be pushed down the viewers’ list and become ‘niche’ viewing (last count Sky’s audience share was well down on the beeb – will/would it improve much?). No exposure, no sponsors? Think about the effect on the industries surrounding it ie magazines, to name but one.
+1 for the brotherhood (and sisterhood for PC readers) of F1 viewers JOJ – ‘share and share alike’ 😉
Judge, I am I assure you working on the sisterhood of F1 😉
“I think F1 needs long term. Right now, and fast.”
The irony of this is delightful. The point is probably valid though.
Quite deliberate. Same way you don’t get pregnant slowly. Some decisions are just that, a decision. Left? Or, Right?
Or do it the Grosjean way, straight into the back of somebody!
LOL, Stephen, have to say that comment was on the nose!
Just think how people’s views would change if the BBC lost/and dropped F1 coverage. At least, for the moment, there are strict controls on the amount of advertising allowed in the UK which makes watching of the BTTCC for example bearable due to the sensitive fashion in which ITV4 cuts-away to ads in between races. It seems unlikely that ITV would bid again and Sky’s apparent lack of success wouldn’t encourage them to do so, not without a dramatic reduction in the fee asked by CVC. Would the BBC return to full coverage? Only if Sky drop it and the fee is reduced – Tony Hall (new DG) is a news man and will be consumed by other more important matters in the near future including keeping costs down. I believe it’s more and more likely that F1 will end up exclusively on Sky.
We have always had ads on tv in the states. They are not going away. There is no data that supports the theory that commercials are increasing.
Complaining about commercials is an excercise in futility.
Adverts on FTA b/cast are beyond silly AFAICT. I ‘m no expert on how the money trickles down, but when i looked at NEWS Corp shares, when they made pushes into their business (mainly sports and movies) they really risked it, and Rope’s family’s voting shares were the only thing standing between them and shareholder revolt.
I nes to revise or clarify what I said: there is a Exeunt discount attached to NEWS Corp. and generally it is also seen as a one man band. The difference to me is the sheer scale, and investment into the channel, distribution and hardware. Bernie never had such toys like the Astra satellites, etc. etc.
Moreover, you can look at both, and assume they are both on their way out (looks like a race to being 100 years!) but after that, all I read about the soccer Premiership negotiations in mid 90s, to get all our foty on his network, he could slice and dice them rotten. It may be one man, but that attitude is prevalent in Sky, I remember sitting through the night quaffing a maly courtesy of who had been dragooned from ITN’s most senior founding crew, to head up Sky News. If you want someone back from retirement (as Wally was) you have to be generous, unstinting, and have a super pitch. BCE excercises none of those, unless yuo count the occasional bailout.
Seriously, Bernie, if you only ever wanted 10 teams on the grid, then why backstop Tom Walknishaw? (as was heavily rumored at the time). Walkinshaw is my kind of ballsy nutter, all save his lackadaisicality as to business side of instead of being being a plain speaking Scot. That always made me cringe, hiding behind a stereotype.
Bottom line: I think F1 has to go the way of big league sports in the US, at least management and PR / marketing style. You need budget for that. Now when BCE started, budget was to stop things looking scruffy. That sold. But we expect all that now, inclusive. So there needs a push. Ole Rupe cuts himself extraordinary ideas as a percentage of revenues, but the thing is they get spent, at least hopefully, to promote. Thee is contrast too, between herding kittyF1teams, and the big single minded bets Rupe used to make. I.E> Ole Rupe had his neck on the line, and brought up the teams. (soccer, UK) and that was responded to. BCE is all too habituated to telling everyone else to pull up their socks or read the tea leaves he left behind, still warm and squidgy.
Don’t watch commercial TV, simple. We haven’t watched much TV over the past few years, and I’d guess that less than 1% of that would be regular ITV or Channel 4 or the sub-channels of those companies.
If F1 was ONLY on commercial TV, I’d probably not bother. As it is I can get 200+ channels of satellite rubbish or 8 channels of Freesat which includes the BBC. If I move my satellite dish I can get coverage from other countries.
Commercials are part of the business plan, nobody complains about the giant Shell logo’s on the tracks or the advertising on fences and bridges, but they are all part of the financial side of F1, you’ll never get away from it.
I have got to the stage now of not ‘needing’ TV, but it is there when I want it, and more importantly, IF I want it.
I gave up complaining about advertising interrupting the races I watch. I simply refuse to buy anything from any company that had their advertisement make me miss an important moment in a race.
Above comment redundant, free.fr retracted their setting to block adverts, so I read . .
Does each race really generate the same revenue? Or is that an irrelevant metric because the contract is signed annually and not on a per-race basis?
Interesting excersise going on here in Oz. V8Supercars are trying to get takers for the TV rights for the next few seasons. Around 50days out from the first race of the season (Clipsal on the Adelaide circuit) they don’t have a deal set,
Certainly they have been caught in the cross fire of AFL, NFL, soccer and cricket deals, but the huge downturn in FTA TV advertising sales has made the 5 networks reluctant to bid.
The move to get rights deals on other platforms has also run into problems. Cable is not strong in Oz. Mobile platforms were dragging in good money while the carriers (Telstra and Vodaphone) were using it as a method to sign users, but with the (almost) demise of Vodaphone they have dropped out of bidding. The revenue model of the non FTA advertising platforms is still considered a bit dodgy with online streaming having a hurdle in the number of people who think it should be free and uninterupted.
Now this isn’t the States, or Europe but I wonder if the sort of problems V8SC are encountering are a sign of the demise of the “rivers of gold” that were claimed for TV advertising sales?
Speed TV (Fox/Murdoch) has had F1 US broadcast rights in the US for seventeen years and this year relinquishes them to NBC. The good news is that today and presumably while it builds its brand, NBC Sports is not yet a premium (additional fee required) cable channel and also that Fox/Murdoch is out of the loop in the US. I’m nervous however that, given Murdoch’s increased attention to video & cable vs printed media and Sky’s grab of F1 in UK and Italy, he will as has been rumored from time to time acquire the F1 commercial rights and lock up TV distribution world-wide. I need someone to tell me how that could be good for the sport.
Joe- what you are missing is the fact that cable-based networks like ESPN and NBC Sports and soon to come FoxSports1 all charge subscriber fees for their channels to be seen by cable and satellite subscribers. Collectively, these subscriber fees dwarf the fees paid by advertising by a large margin allowing them to compete wildly with one another for sports programming. Its a sellers market.
The reason rights fess have escalated so high, at least in the States, is upward of 75% of households pay to watch TV though cable or satellite fees – these subscriber fees provide a major offset for the cost of rights in addition to advertising sales.
The free-to-air networks are different, at least currently, they are not allowed by law to charge for content that is available over the air for free.
If the free-to-air networks didn’t own multiple cable channels for which they get paid on a per-subscriber basis–the economics of TV sports rights would be drastically different, as would access to the sports themselves.
“Just think how people’s views would change if the BBC lost/and dropped F1 coverage.”
Unless ITV or Channel 4 Picked it up then that would the the end! I can’t afford either to go to races or to have sky. The BTCC is great racing and maybe one day we could get autocross back. F1 would be confined to blogs, the radio and the live timing, but interest is going to fade if I cannot see it.
Joe, do you have any figures on what sort of revenue the NBA generates with it’s League Pass system of selling the access direct to consumers for streaming over the web?
Leaving aside the fact that FOM are practically in the dark ages when it comes to the intenet – could F1 implement a similar model?
No.
Hi joe, is your “no” answer in relation to not having NBA figures or not thinking FOM would go the direct streaming option? If it is the streaming option why wouldn’t FOM look at it? The NFL do it and can still command reasonable tv revenues, living in a country with average coverage (Australia) I would gladly pay FOM around $500 to $700 a year for full coverage of each weekend like the Sky Go system and with the increasing use of mobile devices particularly in the younger market I would have thought this would be a good avenue to attract more fans, create more advertising opportunities and generate more revenue. I have never really heard a decent explanation for F1 not having something like this, can you provide one?
The NBA figures. As to FOM going with direct streaming, we will have to see. I don’t think the technology is good enough yet.
I think the tech is well there, Joe, but getting n million homes to upgrade their kit (on premises routers etc) is more the hurdle. Was discussing this into the small ours with my BP, and we think 5 years is the turnaround. Currently got 80Mb/s down and 20 something up at our place, with a new router and asking for preferential “backhaul”. That’s decidedly enough to stream great HD. The second hurdle is to make a system or box neat and tidy, and that usually means a new box under the telly. I think people are weary of being up-sold, and though Sky could go over IP right now, they need economies of scale. Think the first HDTV (limited) broadcast was when I still wore nappies, so the constraint is distribution.
Isn’t that where the long-term plan behind the Tata Communication deal is?
One topic that would be interesting to discuss is the extent to which F1 is exploiting social media platform opportunities to increase revenues. My feeling is that it is doing a lousy job in that area. The concern if it is doing a lousy job is that young people are increasingly moving to online streaming platforms, TV is for old folks. Where is the next generation of F1 viewers going to come from if social media platforms have no f1 content? Right now, for example, F1 has Youtube pretty much on lockdown as far as F1 content is concerned. The licensing of F1 footage is also ludicrously controlled. Did anybody see how the makers of “Iron Man” had to make do with with crappy 70’s racing footage of what looked like F1 or CART instead of some nice up to date footage that might have given F1 some publicity?
I agree entirely.
Totally agree with that too! It reminds me what Adam Parr was saying over a year ago: http://www.businessf1.fr/article-william-parr-pour-que-la-f1-soit-plus-presente-sur-les-reseaux-sociaux-79443129.html
Talking about F1 publicity through entertainment, Joe, I was wondering, did Jean Graton had anything to pay to F1/Mr. E to publish his comics Michel Vaillant?
I very much doubt it.
Yes, and it was pretty painful. It was a massive missed opportunity, imo.
I enjoy F1. Being stateside – I doubt F1 is going to get the revenue they are looking for….. There is just too many other sport to compete with.
It is not planned to happen next week. These things take time. I
Steve USA – explain netflix?
A quick Google search provides me with F1 viewership, in 2010, of 527 million people. Which would equate to near enough $1 per viewer. I’d be happy to pay $5-10 per race to watch F1 live without interruption (realistically it would be more like $20-30). Surely this is an area where CVC could make extra money?
isn’t the revenue of Premier League soccer in the UK closer to 1/4th that of F1 and Nascar, and not 1/3rd, being 6.8M a year per game vs 29-30m respectively for Nascar and F1? This may sound nit picky but I just want to make sure I understand it correctly.
Yes, I was always lousy at maths!
Pedant here, that’s arithmetic, surely? Math(s) being the thing with symbols and letters and funny squiggles? 🙂
arithmetic is the most elementary branch of mathematic.
Mathematics is the science of numbers and their operations, interrelations, generalisations and abstractions. Arithmetic is a subset of Maths and Joe was declaring that he is lousy at the whole lot, so unless you know him to excel in some other branch of Math your pedantry is misplaced.
Rj, as a self declared pedant, which alone ought to raise suspicions (!), and terrible at math(s) by any useful definition, you may have to be wary of my self mockery 🙂
Part of the discrepancy may be that you worked on 380 Premier League games in a season – I confess my maths is better than my football knowledge but aren’t there twice as many games in a season? 20 teams playing 19 other teams twice = 760 games.
That’s a lot of football. Thank god those overpaid brats are tucked away on a channel i don’t subscribe to.
I don’t think so…
Sorry to bud in there Mon Pen, but its not 20 playing 19 others twice. Because there are always 2 teams at a time playing against eachother, its each team having the other 19 over once (i.e. hosting each other team), making them play against eachother 2 times during the season (once hosting and once as the visiting team).