Sky are to broadcast F1 exclusively from 2019 in the United Kingdom, it has been confirmed. In a huge bombshell announcement on Wednesday evening, the broadcaster announced that they will show every race live from 2019 to 2024 after agreeing a new deal with Formula One Management. The announcement means that Channel 4 will only be showing their element of live Formula 1 from 2016 to 2018.
The British Grand Prix remains live and free-to-air, as will highlights of every race and qualifying session. Furthermore, at least two ‘prime time’ races will be shown live on Sky Sports Mix. Sky have also announced that from 2017, every race will be shown live in Ultra HD via SkyQ. Interestingly, there is no explicit reference of ‘Sky Sports F1’ as a channel beyond 2018.
Bernie Ecclestone said “I am delighted that we will continue to work together. Sky’s commitment to the Sport and standard of coverage is second to none.”
Barney Francis, Managing Director of Sky Sports, said “This is a brilliant deal that takes Sky’s partnership with F1 to the next level. Since 2012, we have demonstrated unrivalled commitment to F1, offering fans innovations including a dedicated channel and the very best broadcasting talent. We are delighted that we are strengthening our coverage for viewers even further, with live and exclusive F1 from 2019 and the chance to watch in Ultra High Definition for the first time from next season. We are pleased to support F1 and look forward to working with them to progress, develop and enhance coverage of the Championship during the agreement.”
Martin Brundle said “I joined Sky Sports because I wanted to be part of a dedicated F1 channel with a total and long term commitment to the sport. And we have certainly delivered on that. In a fast changing media landscape, our coverage will get even better for F1 fans.”
In response to the news this evening, a Channel 4 spokeswoman has told this blog: “This deal does not affect Channel 4’s three-year deal for 2016-2018. Channel 4 is still the terrestrial home of F1 for the next three years.”
Analysis – A huge bombshell
The idea that Formula 1 was going to move exclusively live to pay-TV at some point is not surprising. What is extremely surprising is the timing. One race into the 2016 season and the rights for 2019 onwards have been decided. In my opinion, this is Sky Sports covering themselves from a BT Sport onslaught where Formula 1 is concerned. There is no other reason for tying up the rights this early in the game when we are a long way away from 2019.
Of course, this is extremely sad and disappointing news to say the very least and means that, for the first time since its inception, Formula 1 will not be covered live (in some capacity) on BBC, ITV or Channel 4. For the latter, it is a huge blow, given that they would have been hoping to cover Formula 1 in some capacity beyond 2018. They still might: as we have seen with MotoGP, a highlights package may well be created for BBC, ITV or Channel 4 to bid on come 2019. That needs to happen if Formula 1 is going to reach the masses come 2019. There’s also the unfortunate question about whether Channel 4 will be committed to see out their current contract…
> Sky’s average F1 race day audiences (overnight viewing figures)
> 2012 > 0.71 million
> 2013 > 0.64 million
> 2014 > 0.79 million
> 2015 > 0.64 million
The sad thing is, time and time again, the price of subscription television services go up and up, above the rate of inflation. Yet, if you look at the quality of Sky’s Formula 1 programming (in totality as opposed to their race day show), that is dropping. For 2016, the scale of The F1 Show has been cut due to ‘cost cutting’ (which looks odd in the context of today’s statement). The lack of reference to Sky Sports F1 as an explicit channel implies to me that the channel will quietly disappear at the end of 2018. We will see.
Inevitably, unless a highlights package is created for 2019, viewing figures will plummet. Lewis Hamilton’s championship victory last October peaked with 1.7 million on Sky Sports F1. His second championship victory, thanks to live free-to-air television exposure, peaked with nearly eight million viewers one year earlier. Sky’s viewing figures for the Australian Grand Prix dropped 30 percent year-on-year. There is no evidence to suggest that Sky’s viewing figures are growing, and bringing in new viewers. Unless Sky’s viewing figures see a surge in the next few years, this new deal is extremely detrimental to Formula 1, in the same way Sky’s cricket deal was ten years ago. What FOM and other stakeholders do not realise is that fans are only going to pay so much. Fans, such as myself, only have limited expenditure.
Sky may have ten million customers, but their customer base is not growing fast. You can argue that the likes of Now TV have an effect, but as a combined entity, the numbers simply do not equal the pull that free-to-air television has. On a day when the GPDA released a statement concerning the future of Formula 1, the words below now take on extra meaning:
Formula 1 is currently challenged by a difficult global economic environment, a swift change in fan and consumer behaviour, and a decisive shift in the TV and media landscape. This makes it fundamental that the sport’s leaders make smart and well considered adjustments.
Formula 1 has undoubtedly established itself as the pinnacle of motorsport and as such one of the most viewed and popular sports around the world. We drivers stand united, offer our help and support for F1 to keep it as such, and further to make it fit and exciting for many years and generations to come.
Overlooked in the statement is the news that every race will be broadcast in ultra HD from 2017. Considering FOM are usually behind the ball in these things, that is great news from that perspective. I assume other countries will be able to pick up the ultra HD feeds (and additional camera angles).
Tonight, FOM may be the winners. But the losers are the drivers, who will have less eye balls on them in the future. And most importantly, once again, the fans are the ones that will be picking up the pieces.
Update on March 24th at 17:00 – Yesterday, a report from The Telegraph claimed that the cost of Sky’s contract for 2019 to 2024 will be “in excess of £300 million”, a value that seemed far too low to me. In fact, the true value appears to be significantly higher. Robin Jellis, who is the editor of TV Sports Markets, says that he has spoken to a source close to the deal and that the value is “quite a lot more than [£600m] even”, noting that “Sky have paid big bucks for complete exclusivity.”
Although not explicitly stated, it is quite clear that Sky have splashed out close to £1 billion for six seasons of Formula 1. Assuming 20 races each season, that works out at around £150 million per season, and around £7.5 million per race. That is an astronomical increase on the current value. We should have probably seen it coming: the last big rights increase would have been 2009. Since then, we have seen sports rights rise massively, notably due to the emergence of BT Sport. I said in October 2014 that, on rights negotiation would “easily head skyward of £100 million per year, probably near £200 million.” And that is what has happened…
Update on March 25th at 10:00 – James Allen is reporting that, a bidding war has been taking place between BT Sport and Sky Sports in recent weeks, which is why the rights situation has been announced now. As noted above, the value is believed to close to, or around, £1 billion for the six seasons.
A source very close to the situation told me that Sky’s team believed a few weeks ago that BT Sport would be grabbing the rights exclusively from 2019 – which I think shows that things have moved very, very fast in the past few weeks. I’m not convinced that free-to-air highlights will be sublicensed to BBC, ITV or Channel 4, and in my opinion is where their new Sky Sports Mix channel will come into play.
Also, Allen is saying that any form of online streaming will now happen in collaboration with Sky Sports as opposed to against Sky Sports.