American Formula 1 fans are being greeted with good/bad news this weekend regarding how they will be able to watch favorites like Max Verstappen, Charles Leclerc and Sergio Perez in the coming seasons.
Meanwhile, F1 executives face the possibility of not raising as much money as they had hoped.
ESPN inherited Formula 1 broadcasting rights in 2017
Disney properties have been synonymous with Formula 1 since ABC Vast world of sports showed the 1962 Monaco Grand Prix. ESPN acquired the rights from 1984 to 1997, after which the now defunct Speed Channel took the package for a spin.
NBC reportedly paid $4 million a year from 2013 to 2017. But when NBC backed down in 2018, Formula 1 literally gave Disney’s ESPN the rights to maintain a presence in the United States. The parties then agreed to an extension until 2022. The consensus of observers is that ESPN pays around $5 million a year.
Formula 1 has long enjoyed a small but loyal following in the United States. Interest sparked by Netflix Formula 1: drive to survive The docuseries and thrilling 2021 duel between Max Verstappen and Lewis Hamilton boosted audience size just in time for negotiations over a new TV deal, allowing F1 to negotiate from a position of strength.
Report: Netflix is at the heart of the Formula 1 auction
Although the streaming service has so far avoided bidding on live sports contracts, Netflix is actively pursuing the deal for Formula 1 rights, Business Insider reported on Saturday. This puts Netflix head-to-head against Disney, with Comcast’s NBCUniversal also interested.
The website said ESPN had submitted an opening bid of around $70 million, which is considerably lower than the $100 million expected by Formula 1. The price is sure to climb as long as there is will still have three bidders, so F1 could still be close to hitting its target.
Meanwhile, a battle between ESPN and Netflix is more good news than bad for racing fans. The most appealing aspect of ESPN’s race day coverage is that the cable sports pioneer shows the race commercial-free relying on Britain’s Sky Sports feed. An industry source told Sportscasting.com this spring that ESPN would keep its commercial-free racing coverage if it retained US rights.
Netflix’s entire business relies on ad-free streaming, generating its revenue by charging subscribers monthly. Although Netflix is preparing an alternative model in which subscribers could pay less by agreeing to see certain advertisements, racing fans would not be affected. It’s a win for viewers.
Netflix needs to shake things up
Netflix’s latest quarterly financial report was a disaster as various factors led to the service losing 200,000 subscribers worldwide. Its shares were trading at $198.98 on Friday, down more than 70% from its 52-week high.
Besides offering an option to watch with ads and cracking down on customers who share their passwords, the best way for Netflix to get out of its hole is to shake up its offerings. Live sports packages are an obvious option, and Business Insider reported that Netflix co-CEOs Reed Hastings and Ted Sarandos have explored options with Formula 1 and other sports.
Already, Amazon Prime has taken over the NFL Thursday night football schedule and Apple+ has started streaming Major League Baseball games. So in that sense, Netflix is lagging behind the major competitors and may have to spend more than it wants to land the Formula 1 contract.
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