ESPN showing ‘little interest’ in raising F1 rights fees, per report

Formula One is entering the home stretch of media rights negotiations, but it seems that incumbent rights partner ESPN has no desire to pay more than it currently is.

According to a report by CNBC’s Alex Sherman, ESPN has shown “little interest” in shelling out any more than the $85 million annual rights fee it currently pays to the glitzy racing circuit. That piece of information is notable because, as Sherman also reports, the equity research firm Bernstein recently said to “expect a sizable uplift to F1 media rights next year.” Should both of those statements be true, it seems like ESPN can reasonably be ruled out of the running for Formula One rights.

That might be a bit presumptuous, but based on prior reporting, Formula One is having a difficult time attracting bidders. Broadcasting Formula One races isn’t a particularly lucrative endeavor. Many races take place at odd hours in the United States, naturally limiting the audience. However, other factors also make them difficult to monetize.

For one, Formula One races don’t feature commercials, so there are minimal advertising opportunities for networks to capitalize on. Then, there’s the ratings. According to Sherman, viewership for the circuit has stagnated in the United States. Formula One has hovered between an average of 1.1 million and 1.3 million viewers per race the past several years, and doesn’t show any signs of continuing the same growth trajectory it had immediately following the premiere of Netflix’s Drive to Survive.

All of that combines to make for a pretty mediocre media rights property. But Sherman does float one potential front-runner for rights: Apple TV+.

Of course, Apple’s “F1: The Movie,” featuring Brad Pitt, is currently undergoing a major media blitz. The film is largely a promotional vehicle for the racing circuit, while still managing to be compelling, at least according to early reviews. Apple TV+ is already an ad-free streaming service, so the lack of commercial inventory to sell against races is a non-issue. And, Formula One might present just the type of dedicated fanbase that could actually be a meaningful driver of subscriptions for the streamer.

Per Sherman, Formula One “could pick its next U.S. media partner in the coming weeks.” Currently, it appears that signs are pointing away from ESPN and towards Apple.