TV deal: F1 shoots itself squarely in the foot

This morning it was announced that from next season all F1 races will not be free-to-air. The incumbent BBC will continue to cover half the races but will lose exclusive rights to Sky.

The reasons for this are understandable. The BBC has had its licence fee frozen in the past year and in an era when cost-cutting is its priority, an expensive but relatively niche sport such as F1 was always at risk of losing out.

Secondly, the corporation’s contract was due to run out at the end of next season and rumour had it that F1 was to get the chop completely, in order to safeguard other coverage of events such as Wimbledon.

Thirdly, Sky will have been able to bid much higher than the BBC and it would be a brave man who tried to persuade Bernie Ecclestone to reduce the value of the commercial rights. F1 costs what it costs, FOM will have made clear during their negotiations.

But the move is a tragedy for all concerned. The first to lose out will be the armchair fan who either cannot afford Sky or refuses to pay more money into Rupert Murdoch’s pockets in the light of the phone-hacking scandal. What is more, casual viewers may be less willing to tune in to those ‘key’ races if they haven’t been able to follow the ‘story’ of the season as it has unfolded.

More pressingly, the F1 production team at the BBC will lose some of their number in the cost-cutting drive. This is a real shame considering that they have done nothing short of an excellent job. The multi-platform offering with which the BBC presents the sport to the fans is unrivalled, and Sky will have to outdo themselves if they are even to match it.

Lastly, and perhaps most significantly, the new deal will have serious consequences for revenue in the sport. Viewer numbers will tumble as F1 goes to pay TV and this means sponsors will be less inclined to pay as much as they currently do to the teams. Sponsorship money is F1’s lifeblood and whatever percentage Sky have promised which in effect acts as compensation, you may think that it is likely to be inadequate.

Quite apart from all the commotion surrounding the deal, the question remains as to whether the teams will take it lying down. Investors in teams are bound to be beating on the team principals’ doors in Hungary, demanding to know whether the Concorde Agreement clause that requires F1 to be free-to-air is going to be invoked. The spectre of a breakaway may yet be resurrected by this, as a number of team principals are thought to be unhappy about the situation.

With the Bahrain debacle and the rules kerfuffle, the management of F1 has made itself look very stupid this season. But this deal takes the biscuit. Sky? Now? It is exactly as though F1 has taken careful aim and shot itself in the foot. It remains to be seen how debilitating the injury will be.