Liberty Media CEO Greg Maffei has suggested that the increasing interest shown by digital players is likely to benefit Formula One as they compete with established broadcasters for live coverage rights.
Speaking at an investor event, Maffei noted that Liberty, as owner of the sport, had a range of deals to negotiate. “We always have a rolling set of promoter deals to re-cut, broadcast deals to re-cut, and sponsorship deals to re-cut,” he advised, adding that it was not really dependant on any one single deal, but admitted that there are some that are larger than others. “We are in the midst for example of doing Germany and I’m optimistic how that’s going to turn out.”
He suggested that in general leverage had gone up with promoters as a result of increased interest in the sport. “But the thing that drives us to get the best broadcast deals besides interest in the sport is competition,” he asserted. “The more broadcasters you have bidding, the more there is a sense of urgency, the more you can play the one against the other. I’m very confident on where we stand on those. Longer term, one of the best upsides in the business is the entry of new, larger digital players who may enter the sport and bid for the sport, and that’s only a positive for us,” he said.
He said that F1 was a “powerful” business with three big revenue streams. “Some kind of a broadcast stream, a sponsorship stream, and a promoter stream, how much we get paid for bringing the race. And there are tensions between all three,” he admitted. “If we put everything on free television we can probably grow our sponsorship revenue more quickly, because we’re showing more eyeballs for sponsors. Conversely, if we put everything on a paid platform we would probably dramatically increase our broadcast revenues, but threaten our sponsorship revenue,” he accepted.
He acknowledged that Formula One’s OTT service, F1 TV, was unlikely to be a “massive” revenue stream, suggesting that it was probably going to be an additive for truly dedicated fans, or potentially a way to tie the sport’s fans more closely. “Some of the challenges around that are so much of the races are already shown on air. When you only have 21 or 22 races there’s not much content that we are holding back, compared to other sports,” he suggested, comparing WWE, where around half of its events were not available on any other broadcast platform, and are only available through its own OTT platform.
“We don’t have enough content to do that,” he admitted. “We have a bunch of shoulder programming, we have a bunch of camera angles, we have a bunch of archives, that’s for truly dedicated fans. There are also things we can do for more general fans which may not be pay, but which may tie them and build fan interest,” he concluded.