It was the worst kept secret for months, but the news that Formula 1 has partnered with Apple for the broadcast rights in the US is truly seismic for the series.
This is a critical deal for F1 and its owner, Liberty Media, because growth in the US market is their big bet for the future. F1 has a market capitalisation today of $24 billion, three times what Liberty paid for it in 2017 and much of that has come from growth in the US. This deal is intended to take revenues and valuation to the next level.
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The deal is for five years and is exclusive. All subscribers of Apple TV will get access to all the content, including everything that is now on F1TV – including data, timing and track maps. From next season, F1 TV will be available in the US only with an Apple TV subscription. It is an excellent product now, after a shaky start. F1 have grown the paying customer base to a point, but in comparison with the success of other areas of the F1 business, subscriber numbers are still lower than hoped for. Having all of F1 TV available on the Apple TV platform in the US will be significant boost. It is also a good deal for Apple as it will get to own that consumer, their data and the additional revenue.
All the output will also be broadcast in Spanish, for the huge Spanish speaking population in the US.
Commenting on the five-year term, Apple’s senior vice president of services, Eddy Cue, noted they “hope to be doing it for ever.” He also talked about “exponentially growing the sport” and hinted that some of the things Apple will do with F1 will end up on broadcast output around the world.
From F1 and the teams’ point of view, this deal is about recognising that audiences today, especially younger fans, consume content in multiple different ways on different devices, and this partnership is F1’s best way to talk to the broadest audience possible in the US.
Deal a long time in the making
This deal has been coming for a long time. The choreography of Apple spending three years making the Brad Pitt movie, releasing it this year and then following it up with this US TV rights deal is no coincidence. The timing is perfect; anyone who saw the movie and is curious to see what real F1 looks like will now find it much easier to discover it. Confidence among both parties is high; the F1 movie made $630m worldwide, with a very strong performance in the US and in China. F1 claim it is the most successful sports movie ever made.
From left, Gary Fegel, Toto Wolff, Eddy Cue, and Werner Brell pose for a photo during Autosport Business Exchange New York
Photo by: Getty Images
Cue has been on the board of Ferrari for many years and got to know F1 CEO Stefano Domenicali during his tenure with the team. The pair admitted that they have been talking about this for some time.
Interestingly, Liberty Media owner John Malone teased this announcement in early September when he made some comments in a recent interview with the Financial Times, to the effect that eventually big tech companies “will outbid everybody for sports… we know that it moves customers and sells advertising.”
The changing face of TV coverage of F1 in the US
ESPN is the loser in this situation. It held the US rights, investing at a time when F1 had still not taken off in the US under Liberty Media. It took over from NBC, which had the rights during the later Bernie Ecclestone-run F1 years. The coverage moved around a lot across its various platforms, some harder to access than others and occasionally, a race would appear on the main NBC network – giving wide free-to-air access. Before that, for many years F1 could only find a home on niche channels like Speedvision.
What is less well known is that, in the 1990s ESPN had the rights and got around two million viewers for its grand prix telecasts. In those days, that wasn’t a huge figure compared to UK, Italy or Germany audiences, nor what major US sports like NFL or NBA were getting. But it’s a very healthy number by today’s standards. There has always been an appetite for F1 in the US, particularly on the East and West seaboards, but now F1 has penetrated more deeply and with Apple it will be able to appear everywhere.
US market is just the start
Domenicali hinted that the Apple deal may extend beyond the US. He talked about being “respectful of existing partners” but mentioned wanting to understand if other markets give them the opportunity to grow.
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Apple will also amplify the sport across Apple News, Appe Maps, Music, Sports and Fitness+. Some races and all practice sessions will be available for free on the Apple TV app. Domenicali calls the deal a “big step change in our approach in the media. Apple is more than a platform. It’s a social movement,” he said.
One aspect of current F1 that is not ideal from Apple’s point of view is that the sweep of races at this time of year in the US time zone clash with the NFL season. Austin, Mexico, Brazil and Vegas are all on weekends when the NFL dominates the sporting landscape. Vegas is baked into the pre-Thanksgiving weekend in November, so will be tough to move while the others are grouped together around it for sustainable travel reasons.
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