With the intended full acquisition of CVC Capital’s interest in F1 and majority stake by Liberty Media, I was contemplating the media organization’s approach to F1 and what could be an interesting change.
If you consider the change in content delivery over the last several years from music to movies and now TV, I reckon Liberty could be the right group to usher in serious change to Formula 1. The reality is that its business model relies on race hosting fees, sponsorship and broadcast rights, just to name the big three, and the broadcast model is what I am interested in discussing.
If we concede a fact that perhaps Liberty Media (LM) would be keen to lower ticket prices, that would have a knock-on effect for what they could charge promoters for a race. If we consider rattling cages and bringing more direct sponsors to the sport, that would increase the revenue. But what about broadcast rights? The legacy broadcast deals may not be the revenue stream they have been in the past if LM doesn’t stay agile with delivery methods.
There are several broadcast rights packages already in existence and these are spread out over time. Each renewal is a chance to negotiate a new contract or seek a new organization willing to pay the price you ask. What if Liberty had a more comprehensive broadcast package in mind?
Even the NFL sells broadcast rights to multiple stations so could LM sell some races to NBC and others to Fox Sports? Could or would broadcasters feel the sport has the weight to bifurcate its broadcast package or would they call for exclusive season coverage? The trouble with a master broadcast program produced by LM and then sold for re-broadcast is that there is a language barrier to work around so that may not be an alternative.
This brings us mobile devices and content on demand. With cable companies and satellite companies all experiencing a drop in subscribers, there’s no doubt that cord-cutting is a viable lifestyle for many Americans. As I’ve argued before, though, are there enough folks who would buy a on-demand F1 content package for their mobile devices that would replace a complete broadcast package with NBC or other networks?
In the past, Mr. E has been keen to charge broadcasters more for a package that would allow them to also deliver their content on demand via mobile devices rather than create an F1 package like WRC or MotoGP has done. Having a mobile package doesn’t seem to impact traditional broadcasters from still paying for MotoGP coverage although it is now on BeIn Sports in the US and that’s only included in the highest package on ATT U-Verse, which I don’t have. So has tis had a negative impact on viewers for MotoGP? My guess is that it has in the US but I could be completely wrong.
I’m just spit-balling here. I am not suggesting I have all the answers but I am offering a few talking points to start our conversation. What way would you most like to consume F1’s broadcast? On a network and DVR it, on free-to-air transmission and DVR it? A F1 broadcast package you can buy and stream on any device? Or is there something else you’d like to see? Let us know how you’d like to watch F1 in the future. The more expensive my TV package gets, the more I am keen to simply have an F1 package to buy and stream on demand if I’m honest with you. Back in the early days of satellite, we were putting up C and Ku-band dishes (5-foot-wide) and buying programming ala carte was the name of the game. I have to admit, I loved those days when I could just buy the channels I wanted and not deal with $120 per month fees for a bundled package.
In the long run, if the music and movie industry have all had to change or die, TV will have to as well. The old models aren’t working and people want choice and ala carte on-demand. Perhaps LM knows this better than anyone but I wonder if they will embrace that change and use F1 as a new way of sport entertainment delivery? Why not, it is the pinnacle of motorsport.