Since inking a deal to air the racing circuit in 2018, ESPN has gone zero to 100 with Formula 1.
The network aired the circuit for free from 2018-2019 before paying a nominal fee of $5 million per year from 2020-2022. Now, ESPN and F1 have a deal that nets the circuit between $75 and $90 million annually through 2025. And according to a report in Sports Business Journal, ESPN would like to stay in the F1 business beyond that.
After the motorsport experienced an initial boom in interest stateside as a result of the popular Netflix series Drive to Survive, viewership has plateaued. Per the SBJ report, ESPN has averaged 1.12 million viewers for F1 race telecasts this season, essentially the same as last year’s 1.10 million average across the full season.
However, ESPN isn’t concerned with the ratings stagnation. Tim Bunnell, ESPN’s senior vice president of programming suggested to SBJ that, “ESPN wants to renew its rights deal with the motorsports property and believes it’s still getting a good ROI because it also considers things like the cool factor around the series.”
While “cool factor” might not seem like savvy business, it very likely is for ESPN. Even with the much higher rights fee ESPN is paying now compared to a few years ago, it’s a price that amounts to a rounding error in the grand scheme of their live sports portfolio. There’s also the cost savings associated with not having to handle any of the production costs — ESPN simply simulcasts the Sky Sports feed. And Bunnell notes that F1 over-indexes in younger, female, and ethnic demographics that networks and advertisers covet.
Not only that, but with F1 now having three races in the United States on its schedule, ESPN has several opportunities each year to wine and dine potential business partners at events with a glitzy reputation. “This is a long-term play for us,” Bunnell told SBJ. “The ratings are one thing, but you look at the client-entertainment possibilities, the marketing opportunities, just the cache of being associated with Formula 1, it pays us back in droves.”
As the circuit announced a bid from General Motors to join the circuit on Monday, its presence in American life will likely become more solidified.
So although F1 hasn’t been quite the viewership supernova some predicted it’d be a few years ago, ESPN still sees it as a solid bet for the future.
