At a Bloomberg event this week, Liberty Media’s Greg Maffei that F1 is going to see a massive increase in its new U.S. media-rights deal that will start next year.
— Adam Stern (@A_S12) May 6, 2022
🔳 The numbers are based on sales since the start of the season. pic.twitter.com/Oe4ODV8I8L
— Adam Stern (@A_S12) May 6, 2022
April 10, 2022
ESPN’s current intention is to continue to run F1 race broadcasts without ads if it can secure a renewal with Liberty Media from 2023, per an SBJ source familiar with the negotiations.
However, once the bid price gets close to F1’s desired price of $75 million per year, it could get hard for any network to go commercial-free. It would have to cover its costs.
One solution might be to broadcast it ad free on ESPN+ and run with ads on the ESPN cable channel. Then ESPN gets the subscription fees for ESPN+ and derives traffic to the streaming site.
In addition to the incumbent ESPN, F1 is rumored to be talking NBC Sports, Fox Sports and Amazon.
April 9, 2022
At Sports Business Journal, John Ourand reported on the current state of negotiations, writing that F1 parent company Liberty Media are currently seeking a 15x increase on their current rights fees:
Formula One has been out in the market seeking upward of $75 million per year for its U.S. media rights, according to several sources.
Currently, sources say that ESPN is paying in the neighborhood of $5 million per year for the rights. ESPN signed a three-year deal worth $15 million in 2019 and holds F1’s U.S. media rights through this current season.
$75 million per year would obviously be a huge increase, and in the neighborhood where ESPN would perhaps have to consider the value proposition. That figure seems very, very aspirational, however. Formula 1 might be growing in the United States, with a demographic appealing to advertisers, but the audiences are still in 1.3 to 1.5 million viewer range. And as for those advertisers, the sport is limited in some ways when it comes to the American television model because of the times many of the races air in the USA.
April 6, 2022
(GMM) Formula 1 is now turning its focus to a more lucrative television rights deal in the United States.
F1 CEO Stefano Domenicali freely admits that the American market is a “massive focus” for the sport, as Las Vegas is added to an ever-expanding calendar alongside existing US-based races in Miami and Austin.
“We believe that Formula 1 simply belongs in the United States,” he is quoted by Sky Deutschland.
“We want to make the American market the most important one in the sport.”
F1’s commercial rights are owned by US-based Liberty Media, with its CEO Greg Maffei insisting that the next piece of the jigsaw puzzle will be an American driver.
“I think with an event like the one in Las Vegas and all the other things we do in the US, it only makes it more likely that we’ll have an American driver soon,” he said.
Domenicali agrees that an American driver is “very important” from a “commercial point of view”.
Also important is a better television deal, as the current deal with Disney-owned ESPN is apparently not as lucrative as it might be.
“This year we’re on ESPN and next year we’re looking for a broadcast partner,” Maffei told CNBC. “We have a lot of interest.
“They (ESPN) got a very good deal because we’ve had a rise in popularity, and they’ve capitalized on that as well.”
He confirmed that the next US TV deal is “likely to be at a much better price for us”.
At the same time, Maffei insists that Liberty Media “will not forget” that “Europe is the birthplace” of Formula 1, even if it is a “global sport today”.
McLaren supremo and Californian Zak Brown, however, thinks the sport could actually survive without its flagship grand prix, with other historic mainstays like Spa-Francorchamps also in doubt.
“I would prefer Monaco to stay on the calendar, but just as the sport as a whole is bigger than any individual driver or team, it is also bigger than any individual grand prix,” he told Reuters.
April 5, 2022
ESPN has held U.S. rights to Formula 1 since 2018, replacing NBC. In November 2019, the network agreed to a three-year extension with ESPN, which runs through this year. In August 2021, ESPN made it clear it wanted to continue its partnership beyond 2022.
- NBC paid $4 million annually from 2013 to 2018 to broadcast Formula 1, but ESPN is currently not paying an annual fee. In return, ESPN broadcasts the races commercial free which has helped grow the all-important USA fan base. Commercial free likely will not continue after 2022
- Disney-owned ESPN also does not currently produce the Formula 1 races, but carries British Sky Sports broadcasts. British Sky Sports does an excellent job. Why reinvent the wheel? It makes sense for ESPN to use the Sky Sports feed to save money and because Sky is so good.
The 2021 Formula 1 season averaged 931,000 viewers on ESPN through its first 14 races, a 50% increase compared to the 2020 season. Through two races this season, Formula 1 is averaging 1.4 million viewers on ESPN, a 47% uptick compared to the same period last year.
April 4, 2022
F1 is so popular in the USA now that there will be an all-out bidding war for TV Broadcast rights starting in 2023.
Let the sparks fly!
Liberty Media President & CEO @GregMaffei tells CNBC’s @DavidFaber that @F1 has a lot of media companies interested in bidding for U.S. media rights and that a return to @ESPN next year is not assured. pic.twitter.com/niZ7bgUneZ
— Adam Stern (@A_S12) April 4, 2022