Yesterday’s story in the Sunday Times that the BBC is thinking of dropping its coverage of F1 has certainly lit a blue touchpaper.
Printed as it was in a newspaper owned by Rupert Murdoch’s News Corp, which has announced that it is looking at a joint bid for F1’s commercial rights with the Agnelli owned Exor group, this has added another dimension to the story and put the subject of the commercial model for TV coverage centre stage.
As someone who has worked in TV for over 20 years, I’ve seen plenty of shifts of emphasis within networks, as executives vie for supremacy and different parts of the budget and schedule struggle for priority. Properties, like F1, can be in favour with one management and then out of favour with another.
It is a fact that F1 is costing the BBC a lot of money. And it is a fact that the BBC have to cut £60 million from their annual sport budget as part of their required cutbacks. They paid a big price for the rights in March 2008, when ITV pulled out two years ahead of its scheduled contract end date. They also have high production costs as their operation has a lot of travelling staff working across TV, interactive and online.
There are clearly factions within the BBC who do not think that F1 at that level is right for the BBC. Recently it has been suggested that the BBC must either cut F1 or lose it’s digital arts and intellect channel BBC4. We’ve seen these kind of threats issued before from BBC with Radio 6 music, which was under threat and then saved.
Whether the people who don’t like F1 would be placated if the Corporation were able to negotiate a lower price for the next contract post 2013, is hard to say. It is possible that this can be achieved, as contact renewals have been achieved at a lower price in several important territories recently, thanks to a more realistic post credit crunch media landscape.
Then there is the other question of what the Murdochs and Agnellis might want to achieve, should they actually get control of the sport. Although Murdoch is active in pay TV platforms like SKY, does that mean that he would insist on the coverage being on his platforms, or would he be happy to take the money from free to air networks? F1 has also tried the model of live on pay TV with delayed re-run on free to air in some countries. But it’s not easy to see that working for a UK F1 audience.
Today McLaren chairman Martin Whitmarsh made a statement on this subject, reacting to the Sunday Times story. His full statement is worth looking at closely.
“Formula 1 insiders have been surprised by the recent newspaper reports, since they contain significant statistical inaccuracies,” he says.
“The reality is that the Formula 1 viewing figures in the UK are high and getting higher. In terms of average viewership, peak viewership and average share of viewership – the three key indices for TV executives – more people are watching Formula 1 this year than last year or indeed than in recent previous years.
“For example, the average share of viewership for the BBC’s coverage of the recent Chinese Grand Prix, which Vodafone McLaren Mercedes’ Lewis Hamilton won, was more than 50%. In other words, as many people were watching Formula 1 in the UK that Sunday morning as were watching every other channel combined – including all terrestrial channels and all satellite channels – a staggeringly impressive statistic. And the TV viewing figures for other recent Grands Prix have been massively impressive too.”
To be fair, it’s not all that surprising that the BBC audience for the Chinese Grand Prix should be 50% of the total TV audience at that time, given that the race was on in the UK at 8 o’clock on a Sunday morning. It would have been more instructive to look at race starting at the standard European slot of 1pm. F1 does well generally in this regard. In these days of multi channel TV anything around 25% share is very good.
Whitmarsh reiterates the point he made to a group of us in Turkey that F1’s current business model relies on the mass-market reach of free to air TV, particularly for the sponsors and manufacturers. A switch to a pay TV model requires a change of emphasis for teams, with more of their income shifting to their share of the commercial revenues, (of which TV is a part) and less from sponsorship. While this would make it easier for teams in one sense, as multi-million dollar sponsors are not easy to find, it would also place an even greater emphasis on getting the teams’ share of revenues at the right level, which is what the current Concorde Agreement negotiations are about.
“It’s crucial to the commercial model of Formula 1 that TV coverage should remain free-to-air, and therefore universally accessible, and therefore widely consumed and enjoyed by large numbers of viewers – and the BBC delivers that in the UK,” said Whitmarsh.
“Moreover, besides the quantity of viewership, the quality of the BBC’s coverage is consistently high too – which is just as important. Also important is the demographic data – which shows that F1 is now attracting an increasing number of younger and female viewers, which is also very positive.
This is very important and has been a pre-occupation of the sport for some time. The BBC very noticeably promotes F1 in all kinds of shows, including radio, kids programmes and more. They have done a really good job of promoting the sport and their coverage of it, both on TV, radio and online.
However Whitmarsh’s final remarks are spoken from within the F1 bubble, as he starts talking about F1 being the “pinnacle of motorsport” and says it would be “sad” and “unwise” for the BBC to stop. The bean counters who run TV networks will say a resounding “Who cares?” to this.
To them these remarks will mean nothing at all. F1 is a commodity, like anything else. If it were on commercial TV doing the numbers it is doing, then it would be good business, as long as the rights fee and production costs were under control.
But the BBC isn’t a commercial organisation. It has a public service remit and that means providing everything from drama to arts to children’s programmes, to current affairs. Sport is a small – but expensive – part of that and within that subsection F1 is an already rich sport with races in all kinds of timezones, which makes it hard to schedule.
“Formula 1 is the pinnacle of world motorsport – always has been, always will be,” says Whitmarsh. “As such, it’s appropriate that the BBC should continue to cover it.”
“I think it would be very sad, and most unwise, if the BBC were to disappoint so many millions of British sports fans by axeing it, and that’s why I don’t believe for a moment that they’d seriously consider doing such a thing.”
Although the discussion is about the BBC pulling out at the end of the current contract in 2013, there are voices around suggesting that the pull-out could be a good deal earlier than that. I have no inside knowledge on this and from discussions with senior people on the BBC F1 team I don’t think they have either.