New owners’ big plans for F1
MORE GAINS: LIBERTY MEDIA ADD GAMBLING TO THE MENU IN BID TO RAMP UP PROFITS
If you have ever watched televised sports broadcasts from the UK, chances are you have been subjected to the onslaught of marketing organisations encouraging you to invest your money in a high-risk business with the possibility of excellent returns.
Of course, there is no guarantee of that, but be assured you will not be retaining your original capital investment.
But that is what betting offers and the digital world offers the punter, the opportunity to place a bet on just about any sport, anywhere in the world from their mobile phone.
It is big business in Britain and Greg Maffei, CEO of Liberty Media, the company in the process of buying F1, has made it clear that gambling is on the menu.
Maffei suggested different concepts to enhance returns from F1.
He commented: “There are many opportunities to grow the business, starting with broadcast revenue, the largest source of revenue.
“At the intersection of sports properties and media properties, there is an opportunity to grow that broadcast stream.
“Much of it comes from moving potentially from free-to-air to competitive pay services, for example what happened in the UK, when Sky recently bought the rights.”
The gambling aspect is definitely one they are considering.
“Outside the US there is a huge gambling opportunity in the sport, none of which we currently capitalise on,” Maffei said, raising the digital issue.
“There’s an enormous amount of video feed and data that we have about the races that we are already capturing that we are not in any way processing incrementally for the dedicated fan.”
With these suggested proposals, surely the result is a higher cost for the fans.
Do streaming subscriptions and pay-to-view TV bode well for the future?
If you wish to create more income by increasing the costs of viewing or attending races, then surely the product should have more than the current offering. There are many opportunities to grow the business, starting with broadcast revenue, the largest source of revenue. So far, we have not heard what the new owners have in mind, but rumours of increasing the number of races will not go down well with the teams, who are already overstretched.
“We are sitting on 21 venues. There is an opportunity to grow that over time, particularly while we’ve maximised some of those venue opportunities with high venue fees,” Maffei said.
“I think there’s an opportunity to grow the number of races and venues that are potentially more attractive to longer term broadcast revenues and sponsorship revenues.”
With the promise made by Chase Carey, the new CEO of F1, that the European races are to be continued and supported, along with extra events in Las Vegas, New York and Miami, this means the sport will now face the addition of events in the Asia-Pacific arena.
This line of thought is shared by Gianluca Di Tondo, senior global brand director of the Dutch brewing company Heineken, a recent addition to F1 sponsorship ranks.
Di Tondo is already talking of a race in Ho Chi Minh City, Vietnam, as part of the firm’s global marketing strategy.
Correct me if I’m wrong, but I thought the teams had been restricted in the amount of testing in an attempt to reduce costs, and with further cost budget restrictions, the reductions were to encourage new entries into Formula One.
But now the sport could be expanded to 25 plus races a year, requiring a far greater personnel count for the teams.
With work at the home base, testing and races, the crews could not cope with the added mental and physical demands, so a second complement would be a must.
So, double the salary expenditure of all the teams from the front to the back of the grid.
Added to this are the rumours that the new owners intend to renegotiate the contractual payments and possibly reduce some of the teams’ annual slice of the F1 pie.
I believe a storm is coming and it could be a big one.
Perhaps these proposals and digital media is the way F1 needs to go in future to attract a larger and younger audience, but surely increasing the costs to follow the sport when you have a product that is already losing popularity makes no sense.
Many of my colleagues and friends, who were avid fans of the sport, are no longer bothering to watch.
Many of them consider F1 a total waste of time and are not alone in their opinion.
Global audiences have dropped considerably.
Will the same show at higher cost bring them back?
I have serious doubts, but let’s hope all the current speculation is no more than a lot of smoke and mirrors and Formula One’s future is brighter than it looks at present.
This weekend is the first of the double headers, with a visit to the Sepang Circuit in Malaysia, and the next week, the annual excursion to the Suzuka track in Japan.
With the advantage in the driver’s championship currently in Nico Rosberg’s favour, you can expect Lewis Hamilton to be in a very challenging frame of mind – it is only an eight-point deficit and he wants that fourth title.
Greg Maffei CEO of Liberty Media