The date: Friday 29th July 2011.
The location: Budapest.
The time: 07:00 UK.
The press release went out. The paddock left to clean up the mess, as the fans looked on in shock and disbelief. “BBC TV and Sky Sports have been awarded the live rights to Formula 1™ between 2012 and 2018”, were the words at the top of the press release.
It was something that the majority of Formula 1 fans in the UK feared would happen. The move was a result of the licence fee settlement the previous Autumn, which meant that the BBC had to tighten budgets in all departments. It was either Six Nations, Wimbledon or Formula 1 that was going to be chopped. Axing Wimbledon or the Six Nations, both of which have been BBC staples for decades, would have been extremely controversial, especially when you consider the number of people that play tennis and rugby at grass roots levels.
The axe swung towards Formula 1, as the BBC entered a deal with Sky Sports. The move was controversial, more so considering that the sport in the UK was at its peak in popularity. Despite Sebastian Vettel’s dominance, the majority of races in 2011 peaked with over six million viewers. Since then, numbers have dropped. When Formula 1 bosses wonder why some fans are more vocal than previously in relation to the current on-track product this season, I’d give the same answer that I gave to BBC’s chief F1 writer Andrew Benson on Twitter: “People are more likely to complain about something that they have to pay for rather than something that is free to air…”
So, why did the BBC go into allegiance with Sky and not another free-to-air broadcaster? Unfortunately for BBC, ITV had already allocated budgets for 2012 to cover the European Championships, and therefore could not be considered. Channel 4 were also not considered, despite their interest in securing the rights. I mention this in light of yesterday’s news that the Six Nations rights will be shared between BBC and ITV from 2016 to 2021. There are some similarities between the two, but also some interesting differences. The main similarity in both cases is that the original BBC contract ended early. For Formula 1, the BBC contract was originally 2009 to 2013. BBC renegotiated the contract in the middle of 2011. BBC’s current Six Nations contract was scheduled to last until 2017, except the shared offering with ITV means that the new contract will begin with immediate effect. The reasoning though is different. BBC were always going to get into discussions with the Six Nations Council at this stage it appears. However, Sky Sports also tabled a bid, which led BBC to go to ITV, tabling a joint bid to knock Sky off to stage left.
The key difference between the F1 situation and the Six Nations situation is that the BBC were able to bring ITV as partner on board for the rugby, which they couldn’t do for the F1 due to the point made above. The benefit of any joint BBC and ITV bid is that it is far more compelling for a rights holder to accept a joint bid from free-to-air broadcasters than a single one from a pay-TV broadcaster given the extra exposure that it would bring to the championship. However, BBC were left with no other choice. Had they not gone into partnership with ITV, then they risked either losing the Six Nations completely or needing to go into partnership with Sky Sports. The reaction to the last partnership would be a lot more volatile than the former option…
We’re half-way through the current Formula 1 contract. What happens next? For the next six to nine months, nothing. As mentioned earlier, the current contract between BBC, Sky and FOM runs out at the end of 2018. With the recent licence fee settlement that played out earlier this week. At the moment, no one knows what BBC Sport’s budget will or will not be in the years to come, but one thing is for sure, it will be lower, hence why BBC could not justify outbidding Sky for the Six Nations. The situation is complicated, and there are a lot of different factors that come into play. Do BBC and Sky want to continue their existing relationship? Or would BBC prefer to be in partnership with another free-to-air channel? And where does BT Sport fit into this, if anywhere?
My gut instinct tells me that the deal will be renegotiated before the end of the contract. By renegotiation, I do not mean BBC pulling out the contract. What I mean is BBC and Sky renegotiating their existing contract, in order to extend it to around 2021 or 2022. This assumes that the BBC are happy with the current product, the current viewing figures, what they are currently paying compared with what they are getting and whether they can afford to pay that much. If BBC cannot pay that much, could we realistically see a situation where the BBC only broadcasts only the British, first and last races live? I don’t know. But I definitely think the current deal will be renegotiated early, from the BBC’s longer term perspective that probably is the best option rather than letting the contract run until its end. It would also be to Sky’s benefit as well, as it would mean that BT Sport do not get a look in. Running the contract to the end risks BT Sport and Sky Sports fighting over the live contract alone, should they wish to. However, it also depends whether FOM wishes to take the money or the viewers. As motorcycling fans will know, we’ve been in this position before.
ITV’s F1 contract was meant to last until 2010. They exited in 2008.
BBC’s F1 contract was meant to last until 2013. They renegotiated in 2011.
BBC’s and Sky’s current F1 agreement is meant to last until 2018. I suspect 2016 will be a very interesting year in F1 broadcasting…