I’ll be interested to see what revenue streams Formula 1 can create given the recent comments—since acquiring the series—that Liberty Media’s boss, Chase Carey, has offered on long-term growth versus immediate gains.
Since buying F1, Carey has said they are in it for the long term and says they are energizing and growing the sport and getting smart about social media and they even created a fan zone where you can change tires on a car—you know, like they’ve been doing in NASCAR for years. Carey said that European races are the main focus and with France and Germany returning, he seems to be on target.
Now Carey has spoken of the challenge—we’ve mentioned many times before—over television broadcast rights. National broadcast packages are important to F1’s revenue and as we’ve argued, you can’t ignore them or simply suggest that F1 go digital streaming only. Carey discusses the four concepts he sees:
“In terms of the television arena that we deal with, I guess the way to describe it is that there are three or even four potential arenas that we are engaged with,” said Carey.
“Traditional free, pay, digital, and then our own probably more direct ‘over the top’ product.
“To some degree what you have is conflicting goals across them.
“Probably the economic premium paid gets higher as you go up the ladder, but the reach gets less.”
The challenge is the retain broadcast rights packages for free and paid TV but to introduce digital packages for cord-cutters and apparently and over-the-top package but I’m not sure about the details of such a package.
There are sponsors and teams to consider as well as advertising and the fans. It’s a complicated mix but the former owners of F1 knew where the revenue was and did the best broadcast deals they could.
“We’re trying to balance what is the right mix of reach and direct economic value,” he said.
“Clearly there are impacts on other partners we have – for sponsors the fan engagement is obviously very important.
“For us the goal is to maximise long-term growth, not to find a short term pop.
“If you’re energising the sport we want to make sure we continue to position it for long-term growth that finds a balance between that reach [and money] as opposed to just where you can get the biggest buck?”
Once again, there seems to be a dig at former F1 boss Bernie Ecclestone in the Autosport article and Carey’s commentary. It is those biggest bucks that have kept the revenue stream flowing and the teams paid the prize money for which they have become very reliant sans sponsorship. I understand his point, I’m not digging at Chase on this but I’m curious in that European race (lower sanctioning fees), cheaper tickets, more digital TV models and other “long-term” concepts while spending more on marketing F1 through London Live and the Fanzone stuff, how will all this play out in total revenue split with teams?
It’s an interesting series of objects he’ll have to juggle but one that I will be very curious to see done. Here’s hoping he has a great plan and everyone benefits.
Hat Tip: Autosport