“The new deal is a great step forward for Formula One in Australia,” said Network Ten CEO Hamish McLennan on Friday morning. “It will ensure bigger and better coverage for motorsport fans.”
Here’s the thing, though: it isn’t a great step forward.
Friday morning provided confirmation that Australia, as is the case with a growing number of countries around the world, will switch to a pay TV-dominated model of Formula One coverage from this season – a full year earlier than anticipated.
The bargain struck between Network Ten, the self-proclaimed home of motorsport, and Fox Sports Australia, the other self-proclaimed home of motorsport, will see Foxtel broadcast every Formula One session live and in high definition while Ten simulcasts just 10 races live, and airs a one-hour highlights package for the others.
It’s a carbon copy of the pay–free combination model currently being used in the UK. So alike are the two that Fox Sports will be carrying its British counterpart and Murdoch stablemate Sky Sport‘s Formula One coverage in Australia in its entirety.
Of this deal we can say this much: coverage will improve. For all the affection we have for a bleary-eyed Greg Rust slogging through the middle of the night start of the annual dead-of-winter Canadian Grand Prix, Sky Sport‘s Formula One coverage is light-years ahead of just about anything any other broadcaster produces anywhere. Not that I’ve watched any from Australia, of course.
Now for the bad news. Television ratings in the UK have declined since exclusive free-to-air broadcast rights, then in the hands of the BBC, were dissolved and divided among it and Sky Sports.
And there’s more bad news. Formula One’s television viewership is in a state of decline around the world, particularly in Europe.
That viewership would decline was a prevailing concern for teams reliant upon maximising eyeballs on their ad-strewn liveries. Indeed, Formula One boasts that it is the most watched sport in the world, only to be outdone by the Olympics and the FIFA World Cup, which is music to an advertiser’s ears.
It is an unfortunate coincidence that on the day the latest blow was dealt to Formula One free-to-air, Ron Dennis announced McLaren’s abandoning of an almost two-year search for a new title sponsor.
These subtle strategic moves on the part of Bernie Ecclestone and Formula One management are all about maximising revenue at the expense of the teams. Advertising through the commercial rights holder is more cost effective for the buyer, but siphons opportunities to make money away from the teams. Television revenue works similarly, with management earning more money than they would by selling rights only to terrestrial broadcasters, but robbing teams of their earning capacity.
The end result? Formula One becomes a pure franchise. It is needless to have a number of proprietary teams when customers could simply buy into the sport and race control cars selected from a small pool of manufacturers. Costs are kept low – as is the demand from competitors to see a greater percentage of the sport’s revenue – and the commercial rights holder has total control over the product and associated risks.
We already see this in the calendar. How many circuits do we visit each year that are virtually identical to the viewer? How many vast stretches of pale asphalt will it take in a single year to numb the sense of location and identity? Race tracks, once the breathtaking backdrops to do daring feats of driving courage, have been homogenised to become scarcely more identifiable than one McDonalds is to another.
But I digress, Formula One in Australia is the real loser in this situation.
It is a tricky thing to pin down, because the viewer is not necessarily the loser. If you can afford the $50 per month, your viewing experience will be exponentially better for it. The casual viewer, meanwhile, will stop watching. Some may care. A number will probably be satisfied with the combination of repeats that Ten may or may not put in the place of its Formula One coverage.
Instead it is the fan-base as a whole that will suffer. The United Kingdom was able to bank on a significant percentage of its Formula One followers being far more than mere casual viewers when it made the switch, and it was largely proved correct by viewer numbers declining but refusing to collapse. The same goes for much of Europe.
But can Australia bank on a similar number of core fans to thrive in this environment? The answer, I fear, is no.
The numbers – that Formula One late on a Sunday night rates a few hundred thousand and Foxtel subscribers sits stubbornly at around one-third of the population – do not bode well. The last sport to be simulcast on free and pay TV also produced damning results, with the ABC attracting more than two million viewers to Fox Sport‘s 442,000 for the final of the Asian Cup. The numbers make for ugly reading.
For those core fans, how many times last year, in Daniel Ricciardo’s breakout season, did someone show a sudden burst of uncharacteristic interest in Formula One? The Ricciardo effect, as it has been dubbed, was huge over the last 12 months thanks largely to the ready availability of the season on free-to-air as the casual viewer flicked channels on Sunday night.
After all the numbers, the greater role pay TV has to play in Formula One’s grand scheme for revenue maximisation, and Greg Rust’s return to domestic racing, this is the real problem: ratings tell only part of the story of Formula One’s sudden and very real leap from the minds of diehard fans into the public consciousness over the last 12 months.
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