F1 banking on 'large digital players' to bid up broadcasting rights

Liberty Media CEO Greg Maffei sees a profitable bidding war potentially emerging for F1's broadcasting rights thanks to media's major digital players.

As the world of digital media continues to expand, large players within the arena such as Amazon, Youtube or Hulu are joining ESPN+ in offering live sports streaming.

With interest in F1 in particular ramping up, Maffei is banking on a bidding war and competition among the various live streaming services to help boost the sports broadcasting revenue.

"We always have a rolling set of promoter deals to re-cut, broadcast deals to re-cut, and sponsorship deals to re-cut," Maffei said, speaking recently at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.

"We're not really dependant on any one single deal. There are some that are larger than others. We are in the midst for example of doing Germany [RTL], and I'm optimistic how that's going to turn out.

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"I think in general leverage has gone up with promoters, because there's increased interest in the sport. But the thing that drives us to get the best broadcast deals besides interest in the sport is competition.

"The more broadcasters you have bidding, the more there is a sense of urgency, the more you can play the one against the other. I'm very confident on where we stand on those.

"Longer term one of the best upsides in the business is the entry of new, larger digital players who may enter the sport and bid for the sport, and that's only a positive for us."

Former F1 supremo Bernie Ecclestone instigated the sport's push to secure Pay TV deals, a move which rights holder Liberty Media has continued.

But Maffei admitted that striking the right balance in terms of F1's broadcasting revenue mix and viewing numbers is a challenging task that directly impacts the sports' quest for sponsorship.

"We have a powerful business with three big revenue streams: some kind of a broadcast stream, a sponsorship stream, and a promoter stream, how much we get paid for bringing the race. And there are tensions between all three," Maffei explained.

"If we put everything on free television we can probably grow our sponsorship revenue more quickly, because we're showing more eyeballs for sponsors.

"Conversely if we put everything on a paid platform we would probably dramatically increase our broadcast revenues, but threaten our sponsorship revenue."

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