Broadcasting partnerships have become an increasingly critical component of leading sporting disciplines across the past couple of decades. Several new platforms have joined a market which itself is still expanding, taking different sports to new territories and audiences, chasing finances and eyeballs, and Formula 1 is a central player in such a battlefield.
Since its acquisition of F1 a year ago, a main focus for Liberty Media has been on the commercial side of the sport, both in terms of the product shown to spectators and the method in which it is delivered, believing that F1 was outshone by other sports during the past few years. This season Liberty intends to introduce new graphics, enhanced visuals and make other tweaks (with some races moved to 10 past the hour to aid broadcasters), but while presentation is key, its deliverance has become a talking point, with several new deals changing the landscape, with fans left wondering about Liberty’s long-term goal.
There are three chief components in Liberty Media’s landscape: FTA (free-to-air), PPV (pay-per-view – and for the sake of acronyms we're including the Pay TV model into this segment) and OTT (over-the-top).
Of F1’s leading TV markets, several have entered new, tweaked, or prolonged arrangements across the past 12 months, with further changes on the horizon.
In France, home to Renault and three of 2018’s 20 F1 drivers, the sport will return to FTA for the first time in several years, with four events to be broadcast live on TF1, including the French Grand Prix’s comeback, complementing Canal+’s season-long PVV live offering.
In Spain, home to two drivers – including the uber-popular Fernando Alonso – PPV channel Movistar+ has extended its deal through 2020, with F1 pledging to help Movistar+ “produce exclusive content for its distribution across their digital and social media platforms.”
Across the Mediterranean, long-time FTA broadcaster RAI is set to lose all rights, after its gradual decline in recent years, with fewer races having been shown live amid Sky Italia’s arrival on the scene in 2013. Sky Italia (PPV) will continue for the next three years, and a compensation of sorts comes in the form of four races, including Monza, set to be shown on its FTA subsidiary TV8, where the remaining 17 races will be available delayed. It was stressed that maintaining a FTA presence in Italy – home to two teams, including F1’s most successful and marketable, which itself has threatened to quit post-2020 – was “crucial”, highlighting the desire for Liberty to keep it fingers in different pots on a territory-by-territory basis
Conversely, a renewed deal with FTA channel RTL in Germany has left long-term PPV broadcaster Sky Sport Deutschland unwilling to continue into 2018, much to the chagrin of some viewers, who will now be subject to in-race adverts. German spectators, in some respects, were fortunate to have two options, but now one has gone. Enter into the equation OTT.
Germany is one of the territories where Liberty’s new-for-2018 OTT service has been rumoured to be available, and it is hardly surprising that Sky is not eager to compete with the sport’s in-house offering. It is the exact reason why NBC Sports, which raised Formula 1 to new levels in the United States through its coverage, did not renew post-2017. “We chose not to enter into a new agreement in which the rights holder itself competes with us and our distribution partners,” read NBC’s statement at the time, before cattily adding: “We wish the new owners of F1 well.” ESPN will pick up the coverage, and is not expected to rival its predecessor’s offering of non-world feed programming. It is a bold gamble from Liberty in a territory which F1 remains keen to further exploit, but, from a financial perspective, sources indicate Liberty does not need many OTT subscribers to match NBC's mooted offering
F1, and in turn Liberty Media, is therefore facing the predicament encountered by several sports: which road to take, where to take it, and for how long, while also adapting to the changing demands of consumers and varying generational habits. Its early deals are an indicator of its desires: blending FTA, PPV and OTT depending on territory and circumstance, with some of its options and ideas hamstrung by arrangements agreed under previous ownership (including the United Kingdom’s binding PPV deal with Sky Sports, which will kick in next year).
FTA grabs the largest audience, naturally meaning that there are more eyes on the sport, the greater chance of capturing new fans, and in turn giving teams greater ammunition to demand more cash from sponsors. PPV, meanwhile, typically provides F1 with a greater direct financial injection – such is the nature of the market – with the trickle-down effect a bonus for teams’ budgets and, in some territories, means an entire channel can be dedicated to the sport, satiating the desires of the hardcore fan. But PPV means fewer viewers, the lesser chance of grabbing the casual fans – who in turn could become devotees – and therefore the spiral effect has a knock-on impact on sponsorship. OTT, meanwhile, should bring F1 to new fans (and crucially the younger audience) – with the sport’s digital offering almost non-existent until the very latter years of the CVC/Ecclestone reign. A new (younger) fan paying to watch a revamped service – super, right? But as NBC has determined, what will a subscription-based broadcaster gain from going up against F1’s own service? It won’t. And F1 is unlikely to be so open to losing the money offered by some PPV broadcasters, therefore limiting the territories in which OTT can, or will, be available, at least in the short-term.
FTA, PPV, OTT? Liberty has so far indicated that it is keen to utilise all three, and, now entering its second year in charge of the sport, its direction and ambitions over the next few months and years will be tracked with interest across the board…
This feature originally appeared in issue 250 of our sister publication Motorsport Monday – our weekly free magazine published every Monday – to read the latest issue, click here. To subscribe, head to www.motorsportmonday.com.
