Will Gray

Gray Matter: Is F1 right to reach for the Sky?

Will Gray

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It was a shock for British F1 fans when news of the new
BBC/Sky share TV deal broke last week - but now it has had time to sink in what
are the implications and can it prove the doubters wrong?

Free-to-air live Formula One has been a given in the UK
for decades, but from next year only half the races will be available to fans
for free, with the other half requiring a Sky Sports subscription. As such, it
has been immediately seen as something that will, for certain, alienate many
who either cannot afford to pay for the service or who refuse to do so.

The simple reason for the change is that the BBC could
not afford to pay for F1, which at around £40m per year was the most expensive
rights in the Corporation's budget. Cue F1 commercial rights holder Bernie
Ecclestone's shrewd deal, which is reported to bring in £45m from Sky and £20m
from the BBC each year. It seems a sensible move in pure financial terms - but
what about the other important elements?

The Viewers

In the UK, around 7m fans have tuned in to watch some of
the live races this year and the 45-minutes or so of pre-amble and the
post-race analysis have proved popular, even if the post-race 'red button'
take-up is understood not to be so significant.

Losing 10 of those free-to-air live races will be a blow,
and although the BBC will be showing extended highlights later on, in those
cases they will not have time for the kind of insightful features and analysis
that have helped to give the viewers a real insight into the sport.

That said, for the hardcore fan, free-to-air TV will
still be telling the story of the season, even if half the time it will not be
told at the instant it happens. For those who love the buzz of the live action,
there will be no substitute (apart from listening on BBC Radio Five Live) but
some will argue it could actually make for a better Sunday - allowing for an
afternoon out and, if reports are correct, a perfectly timed race re-run when
you return in the late afternoon.

As for those who can afford Sky, it will offer the best
of both worlds.

When Sky does a sport, it does it well. Cricket, tennis,
football, they've all benefitted from the Sky treatment and they seem to be
able to do it with anything - just look at how they've transformed darts!

Formula One will get this treatment and subscribers will
likely be flooded with hours of in-depth analysis, replays, features and
insight. And although the BBC's red button feedback may question how much of
this is really required, it will all be there if you want it and can afford to
pay for it.

The Teams

For the teams, there are two elements to the TV deal -
the first is the amount of revenue generated by the rights and the second is
the amount of viewers able to tune in, with high numbers required to justify
the high rate card they have for sponsors.

For many years, Sky has shown in other sports that they
have financial muscle to out-bid any free-to-air channel for TV rights and the
only reason any sport is not on Sky is if they don't want it or, on some rare
occasions, the sport deems it morally wrong to go down that route.

Although Ecclestone has recently tried to develop a
sponsor portfolio for the sport, his model for F1 revenue has long centred on
venue hosting fees and broadcasting rights - and his ever-increasing value for
the latter is what pinned him and the teams into a corner here.

In terms of television rights, football is a fantastic
comparison - and the fact that you have to go so far back in time to see it
shows that by sticking free-to-air for so long, Formula One has missed a trick.

Back in 1986, the Football League had a two-year
agreement with the BBC worth £2.6m per year, but it went to ITV in 1988 for £11m
per year. When the Premier League formed and moved to Sky in 1992, their first
deal, with the added income from highlights shown on BBC, is reported to have
totalled £304m over a five-year period.

With the BBC's swathing cuts, a salivating Sky chewing at
the bit to get a piece of F1, and a commercial rights holder that is less 'traditional'
than the likes of Wimbledon, the Boat Race and the Grand National, this move
was in fact inevitable.

As was the assumption that F1 will lose viewers because
of this - but that expected inevitability may not necessarily be correct.

Last November, BSkyB announced they had 10 million
subscribers and were hitting 36 percent of UK and Irish households with a reach
of 25 million people, although the amount of those who subscribe to Sky Sports
is not formally revealed.

Sky has claimed up to 2m viewers for some football
matches, and if F1 can achieve similar then that's not bad - its not long since
F1 could attract little more than that on free to air - and the BBC will still
pretty much have the pick of the races that took the highest viewing figures to
show live.

With those 10 live events still keeping F1 very much on
the mass public screens, the core fans who would have watched the other races
live but cannot afford Sky will also likely tune in later in any case. And,
given that the delayed coverage will be on at prime time on an early Sunday
evening, you could get some casual viewers tuning in and getting hooked on the
sport too (something that happened with the long-delayed Canadian Grand Prix
this year). That all adds up.

Global Sponsors

What also seems to have been missed in the F1 teams'
reactions to the BBC/Sky deal is the fact that F1 is a global sport and the
massive global brands involved are in it for that very reason.

Many sponsors are not actually really looking to reach
the UK audience but rather to hit the likes of India, China, Russia, Brazil,
the Far East and the USA - and the type of television coverage in those
locations has not put them off.

In the US, for instance, F1 is shown on Speed TV, a cable
channel that requires a fee and one that is a step above the basic package.
Likewise India and Russia, and in Japan live races are only shown on premium
channel Fuji TV Next, with delayed coverage on free Fuji TV.

Despite this, F1 still claims a global television audience
of 600 million people per race, so a few million live viewers lost in the UK is
just a drop in the ocean - particularly as many of those will still be counted
in the overall figure if they watch the delayed coverage.

The Premier League has demonstrated that it is strong
enough not just to survive but to prosper though pay-per-view television - and
for football fans it is now just an accepted fact that if your team is on and
you don't have Sky, it's the pub for you.

On that note, perhaps F1 is destined to become essential
pub viewing in the UK on a Sunday too - and given that you can stroll into your
local and pick up a glass of water for free, that would mean you could still
effectively watch F1 for free!

In this evolving broadcasting world, F1 and its fans need
to learn from football's adaptability and embrace this change. And providing
the sport keeps up the action, then however or wherever it is viewed, those
audiences will remain and the core fans will still get to see it all.

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