F1 teams “blocked” Sky UK exclusivity for 2016 to 2018

Formula 1’s teams are understood to have blocked a clause in Sky’s UK contract that would have resulted in them taking exclusive UK television rights from 2016 to 2018, this site has learnt.

The shared contract signed in July 2011 between them, the BBC and Formula One Management (FOM) for 2012 through to and including 2018 featured a clause that stated that, in the event the BBC (TV) were to exit their contract early, then Sky Sports would pick up the rights exclusively for the remainder of the contract.

When it became apparent in the run up to the Abu Dhabi Grand Prix last November that the BBC were set to terminate their contract, Formula 1’s teams are understood to have requested that Formula 1 remains on free to air terrestrial television in the UK in some capacity until at least the end of 2018. The concern for teams was that they would have difficulty persuading sponsors to stay on board with F1 behind a pay wall in the UK. This led to the sequence of events that saw Channel 4 step in and take over BBC TV’s rights from 2016 to 2018 inclusive.

This has also been reported by James Allen, but this site has been able to confirm the information independently of that report. The UK is one of the biggest territories for Formula 1 and is home to the majority of the current eleven teams.

In separate news, it is interesting to note how Sky Sports appear to be so far operating a ‘black out’ with relation to the Grand Prix Drivers’ Association (GPDA) statement released yesterday. The statement has been covered extensively on digital media and elsewhere: BBC, Channel 4, AUTOSPORT, Motorsport and The Guardian to name a few. The statement was initially posted on Sky Sports F1’s website by writer William Esler, and quickly pulled. Google cache returns the article:

Journalism should be about reporting the good news and the bad news, not ignoring one element because it does not suit a particular agenda. Clearly a conscious decision was made to pull GPDA article, one reason in my opinion because Sky felt it would undermine their own statement given that the GPDA references an ever changing landscape. I’ve requested comment from Sky, but as of writing, I have not received an explanation as to the article’s disappearance.

Updated on March 24th at 16:55.

Update on March 30th at 20:45 – The GPDA letter was discussed on tonight’s F1 Report, which is good to see. Bear in mind that F1 Report tends to be treated separately compared to the main block of F1 programming, it will be interesting to see how much the letter is covered this week in Bahrain given the absence of coverage on the website since the removal of the original article.

Update on March 31st at 17:50 – The self imposed ‘black out’ of the statement on the website has ended it seems, with the letter now being referenced here. I suspect we will never know why the original article disappeared last week (and Sky clearly are not keen to explain why the article was removed either), or at least no explanation was forthcoming when this blog requested comment off Sky last Thursday.

Sky Sports to broadcast F1 exclusively from 2019

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.

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Formula 1 smashes Channel 4’s slot averages, but large drops across the board

Channel 4 may have delivered a solid package over the weekend, but Formula 1 felt the brunt of no presence on BBC TV or ITV, the two largest networks in the United Kingdom, meaning that overnight viewing figures tumbled.

Race
As always at the start of a new Grand Prix season, context is needed as to what the numbers represent. For Channel 4, it is the same as the previous BBC contract: their full highlights programme. Two new things though to note. Firstly, the numbers include advertisements, these are only stripped out in the final consolidated numbers. Secondly, the numbers include Channel 4’s +1 service. Over on Sky Sports F1, it is their three-and-a-half-hour slot which covers Pit Lane Live and the Race itself, so for example from 12:00 to 15:30. Note that due to the red flag period, Australia’s slot is longer as Paddock Live started later than usual.

It was a weekend of contrasting fortunes. After Saturday’s qualifying fiasco, Sunday delivered when it needed to on the circuit. Channel 4’s highlights programme averaged 2.11m (19.0%) from 13:30. The audience peaked in the five-minutes from 15:20 with 2.67m (21.9%) watching. The average is down 30.4 percent on BBC One’s average from last year of 3.03m (27.6%), with the peak measure down 21.0 percent – the difference between the two drops due to Channel 4’s longer programme. Despite the drop, the programme comfortably won its slot and thrashed Channel 4’s slot average.

Live coverage of the race on Sky Sports F1, which aired from 04:00 to 07:45, averaged 271k (18.7%), with Sky Sports 1 adding a further 89k (6.1%), bringing the total audience to 360k (24.8%). The combined peak of 558k (37.4%) came at 06:00 as the race restarted following Fernando Alonso and Esteban Gutierrez’s crash. The average is down 30.4 percent on Sky’s average last year of 517k (29.5%). Despite this year’s race being more exciting than last year’s, the peak was down 29.2 percent on the peak figure from last year of 789k (50.3%). All the figures presented include anyone who watched the live airing later in the day.

The combined audience of 2.47 million is the lowest audience for the Australian Grand Prix since records began (i.e. since at least 2005). The previous lowest was an average audience of 3.18 million in 2006. It is the lowest audience for a Formula 1 race since the 2013 United States Grand Prix.

Qualifying
When Channel 4 signed up to cover Formula 1, they probably did not anticipate that their first qualifying session would be remembered for all the wrong reasons. Their highlights programme from 12:30 to 14:10 on Saturday (19th March) averaged 1.38m (15.4%). The programme recorded a five-minute peak audience of 1.74m (17.9%) at 13:50.

In comparison, last year’s BBC One highlights programme averaged 2.29m (24.5%) over a shorter 75-minute slot. The drop year-on-year is between 30 and 40 percent depending on whether you’re comparing the peak or average figure. Channel 4’s qualifying highlights programme was in line with BBC Two’s Australian qualifying highlights in 2012 and 2014. It should be said that, despite the reduced audience, Channel 4’s programme won the timeslot and was significantly above their own slot average. To give an idea of how well the F1 did on Channel 4 compared to their usual Saturday numbers Channel 4 Racing, which followed the F1, averaged 511k (4.6%).

Live coverage of qualifying over on Sky Sports F1 from 05:00 to 07:45 averaged 184k (11.5%), with Sky Sports 1 adding a further 51k (3.2%). Their coverage recorded a combined peak audience of 423k (17.7%) at 06:50. Sky’s combined audience is down 30.4 percent on last year’s audience across Sky Sports F1, Sky Sports 1 and Sky 1 of 339k (16.4%).

The combined qualifying audience of 1.61m is down 38.6 percent on last year’s figure of 2.63m. Unofficially, it is the lowest number for the Australian Grand Prix qualifying session since 2006. As an aside, Sky’s nine repeats of qualifying averaged a combined audience of 314k, compared to four repeats last year which averaged 202k. Whether viewers made a conscious decision to watch one of the many qualifying repeats on Sky Sports F1 instead of recording the live airing, I don’t know. I don’t include the repeat numbers in the combined audience because you just have no idea how many of those viewers are new viewers.

Analysis – Good for Channel 4, bad for Formula 1
I wrote the following in December when reviewing 2015’s viewing figures:

From a media perspective, Lewis Hamilton versus Sebastian Vettel writes itself. We never quite got it when Vettel was at Red Bull, plus other drivers were involved in the championship battle too. Hamilton versus Vettel, Mercedes vs Ferrari. It is something the casual audience would watch and become invested in. One of the reasons why 2011 was the most watched season in the modern era was not only because of Vettel, but because of Hamilton’s on-track duels with Felipe Massa. We need to see Hamilton versus Vettel, and I hope we see that in 2016. It would draw audiences, not only in the UK but in Germany too. In my opinion, Hamilton vs Nico Rosberg is not something the general public are interested in and the viewing figures reflect that.

Lastly, Formula 1 needs the BBC more than the BBC needs Formula 1. The BBC could replace Formula 1 with repeats on a Sunday afternoon and claim one million viewers, whereas Formula 1 would need to find a new home on ITV or Channel 4, to a significantly reduced audience, more so on the latter.

Channel 4 will be pleased that Formula 1 smashed their slot average, by around 360 percent on Sunday. It should not be overlooked that the numbers Formula 1 delivered over the weekend for them are fantastic numbers in off-peak slots.

For Formula 1 as a whole, however, the moment the switch to Channel 4 was announced, 2016 was always going to be an uphill struggle. The idea that Channel 4 were going to match the BBC’s figures was inconceivable given the reach that the latter has on TV, online and radio. On Saturday, Channel 4 was down 39.7 percent and 33.7 percent (average/peak) year-on-year, compared with 30.4 percent and 21.0 percent on Sunday. Already in the course of 24 hours, both of those metrics were better than before, although Saturday may be influenced by the farcical qualifying session.

It could be argued, from a reach perspective, that this deal will be worse than the previous BBC and Sky deal simply because Formula 1 is not on BBC or ITV. I think it is too early to say that, but the above quoted text (paragraph one) has never been more true. If Bahrain is a Mercedes walkover, I fear for the viewing figures for the remainder of the season. It is easy to say that more people may be watching via other methods, but that will not offset the drops that we could see as the season progresses.

Whilst the drop in numbers year-on-year is somewhat due to the change in the broadcasting rights, Sky Sports dropped by a similar percentage. On both Saturday and Sunday, Sky was down around 30 percent across average and peak. That suggests a much wider problem than simply a change of broadcasting rights that needs to be addressed. Despite having a British world champion, it is clear that viewers were being turned off in the latter half of 2015 and a substantial proportion of the hard-core audience have not returned. Sky’s drop also implies that, if the BBC had retained F1, there would have been a drop for the free-to-air highlights regardless – not by 30 percent but a drop of some proportion, except the change to Channel 4 has exaggerated the drop.

Bahrain will be fascinating with it being Channel 4’s first live race. A battle between Hamilton and Vettel, or a close contest, will help viewing figures. Let’s hope Bahrain delivers on the promise displayed at the Australian Grand Prix.

Speed with Guy Martin impresses
Ahead of the new Formula 1 season, Channel 4 aired a one-hour special edition of Speed with Guy Martin last Thursday (17th March). The show, which featured him going head-to-head with David Coulthard, averaged a strong 2.80m (14.2%) from 21:00 to 22:00. It was second in the slot, only behind BBC One. Impressively, the show had the highest share of adults aged between 16 to 34, 14.9% across the hour. It ended up being the most watched F1 related programme, which shows how vital it is to crossover where possible.

It was Guy Martin’s biggest ever rating on Channel 4, and will probably consolidate to around 3.5 million viewers. At Channel 4’s press launch, Coulthard suggested that there may be more specials with himself and Martin down the road. Given the number for last week’s special, I think the chances of something happening in the future has increased fourfold.

The 2015 Australian Grand Prix ratings report can be found here.

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Channel 4’s inaugural F1 weekend (live and highlights): Your Verdict

The dust has settled on what has been an extraordinary few weeks of Formula 1 action with thrills, spills, controversy and drama. With it, Channel 4’s first stab at covering Formula 1 has concluded.

Sky Sports selected Australia as one of their exclusive races, meaning that Channel 4 aired extended highlights. Alongside that, fans were treated to a special edition of Speed with Guy Martin in the build-up to Australia. I wrote a piece looking at Saturday’s qualifying highlights programme from Australia.

Channel 4 have since aired live coverage of every session from the Bahrain Grand Prix, meaning viewers have now seen a sample of both Channel 4’s live and recorded coverage. What are your early impressions of the presentation team? Was there anything that disappointed you throughout the two weeks? Where would you be looking to improve the coverage?

The best thoughts and opinions will be collated into a new post which will be published in the lead up to the Chinese Grand Prix.

Text updated on April 3rd following the Bahrain Grand Prix.

Looking back at Channel 4’s first Formula 1 broadcast

Saturday 19th March and the 2016 Australian Grand Prix weekend will now be etched in Formula 1 folklore for all the wrong reasons. In the broadcasting world, it marked the day that Channel 4 hit the air with their first Formula 1 highlights programme.

The day had been prepared for. It has been three months in the making since it was announced in December that Channel 4 would be taking over the television rights from the BBC. Channel 4 have been interested in Formula 1 for a long time, dating back to at least 2011. Over the past weeks and months, the channel alongside production partner Whisper Films, have been assembling a team that, according to Channel 4’s Chief Creative Officer Jay Hunt, is “the greatest, extraordinary and most dynamic line-up yet for Formula 1.” What are the early impressions?

In Melbourne we have Steve Jones, David Coulthard, Mark Webber, Ben Edwards, Lee McKenzie and Karun Chandhok covering the action. You are never going to learn everything in one show, but the product that Channel 4 produced today is a sign of the direction that they plan on taking (minus the shambles in the middle).

> June 2012: A look back at ITV’s first live Formula 1 broadcast in 1997
> July 2012: A look at BBC’s [2012 German Grand Prix] Qualifying highlights programme

Structurally, the 105-minute show from 12:30 to 14:15 had 30 minutes of build-up and 15 minutes of reaction. The qualifying edit was 60 minutes long, excluding adverts. Out of the 45 minutes of on-track timing, only around one minute was edited out. Normally you would have 45 minutes, plus a further four or five minutes combined after the chequered flag, necessitating the need for some edits. Because that was not the case here, it meant that Channel 4 viewers received qualifying in almost all its glory. There were five internal breaks, at around 12:40, 12:55, 13:18, 13:40 and 14:05. The show lasted 82 minutes in the 105-minute slot.

Channel 4's graphics set, as part of their debut during the 2016 Australian Grand Prix Qualifying programme.
Channel 4’s graphics set, as part of their debut during the 2016 Australian Grand Prix Qualifying programme.

The post-qualifying round-up was okay. We got two in-depth pieces with Lewis Hamilton and then Toto Wolff and Christian Horner in one. Hamilton aside, there were no driver interviews from within the top eight: we had no reaction from the likes of Sebastian Vettel, Nico Rosberg and Max Verstappen. On a normal day, I think that would have been unacceptable, but today was not normal circumstances. Editorially, a decision would have been made on whether to cover the fiasco in the wrap-up, and Channel 4/Whisper Films made the right decision covering it, even if meant losing some driver content, in my opinion.

I thought the graphics were visually stunning throughout the show. Simple, but effective. The integration of the C4F1 hashtag works for me as well to drive conversation through to social media, which is critical if they are in turn going to draw viewers towards their programming. I’m surprised that proper graphical integration has not yet worked its way through to either Sky’s or FOM’s graphics set. MotoGP, even in their new graphics set, have done this to perfection but Formula 1 seems to struggle to integrate the social element.

Channel 4 have also integrated the social media element into their break bumpers, with different styles depending on the content that is coming up. Quirky, different, distinctive, which is what Channel 4 wants to be. The dubstep music may grate sometimes (not my cup of tea), but the differing backgrounds and hashtag integration is significantly better than your standard break bumpers with a generic background. Seeing Daniel Ricciardo try to play The Chain on a guitar falls under the quirky category, but remember: this is about showing personalities, something Channel 4 are committed on doing. It keeps the viewer engaged instead of a generic VT piece for the sake of a VT piece which does not add something to the end product.

Fernando Alonso being interviewed by Lee McKenzie during Channel 4's coverage of the 2016 Australian Grand Prix Qualifying session.
Fernando Alonso being interviewed by Lee McKenzie during Channel 4’s coverage of the 2016 Australian Grand Prix Qualifying session.

Speaking of The Chain, Channel 4’s new opening titles are significantly different to what we have ever experienced before for Formula 1. The new titles are a collaboration between Whisper Films and Framestore. Less colourful and flashy were the first thoughts that came to my mind. First off, the titles are distinctive in that they will be radically altered for each race, with the lettering changed depending on round. They feel like a 2016 version of ITV’s first effort from 1997 to 1999. At the moment, I’m neither here or there with the titles. The first half of the sequence works really well but the latter half once The Chain properly breaks out into its element, not so well. It is one of them which needs multiple viewings, the titles may look better on the big screen and in clearer quality rather than on the laptop.

Impressions of Steve Jones on screen are good. As I’ve mentioned previously, Bahrain will always be the acid test being Channel 4’s first live Grand Prix. But today, I didn’t get the impression that Jones was floundering around. He did what you expect a presenter to do, comfortably led the show, also having a joke along the way with Coulthard and Webber, both of whom were excellent in the build-up. Jones did not look like someone who was making their Grand Prix presenting debut. Was it perfect? No, of course not. Did it look a tad stilted in places? Yes, it did. But give Jones time and I can see him transforming into a very solid Grand Prix presenter. Bahrain can “make or break” the show, but Australia is as good preparation as you are ever going to get.

Channel 4’s first main interview was Lee McKenzie grilling Fernando Alonso. This is a prime example of why McKenzie is vital for Channel 4, as her interviewing techniques are second to none, to dig below the surface and gather more information. An insightful watch. The only person Channel 4’s viewers did not hear much from was Karun Chandhok, who was probably a victim of the new qualifying format. It is probably worth noting that viewers around the world in multiple countries hear Channel 4’s commentary: Chandhok commentated with Ben Edwards on both practice two and three. I’m hopeful we will hear Chandhok more in their race day coverage as strategic decisions unfold.

Overall, for Channel 4’s first show, it was a positive starting point going forward. Now, to the race! And hopefully Channel 4 will have something more positive to chat about.