Before Formula One was sold earlier in the month, it was discussed that the new owners could take the sport in a different direction, one in which other revenue streams could be explored and just a few of those ideas have been released by CEO Greg Maffei.
Traditionally the sport has had three main revenue streams, the rights for hosting the race, broadcasting rights and sponsorship (as we have seen recently with Heineken, Rolex and Johnny Walker).
These revenue streams could be expanded even further with suggestions that the calendar could grow even further from the ‘difficult to manage’ 21 we have for the first time this season. More races equals more revenue for the sport, but the cost of the teams has to be managed to keep it affordable to compete.
Maffei conceded though that there is limited scope to expand these three streams at the moment, “I think there’s an opportunity to potentially grow that over time, particularly while we’ve maximized some of those venue opportunities with relatively high venues fees, I think there’s an opportunity to grow in the number of venues and venues that are potentially more attractive to longer-term broadcast revenues and sponsorship revenues.”
Those venues could be in Libery’s homeland of America, a greatly untapped at market at the moment for Formula One. Yes, the Austin race has generated a decent crowd for the first year, but the disaster of the 2015 event clouded the reputation of the sport. However, there is scope for expansion, “You think about places where it would have natural appeal I would argue Miami, Las Vegas are very interesting places for the long term. But that isn’t going to get solved in a week. I’d like to hope that being Americans – Chase, Liberty – that we can help with that process. I don’t think as I said this is a quick fix, but for the longer term it’s a large, untapped market with upsides.”
The switch to Pay TV looks set to continue under the new ownership, although more modern ways of distributation look to be on the cards given the groups media background. ‘Over the top broadcasting’ could be an option, with the sport publishing its own content direct to consumers on their own plarform. He said, “I think there’s an opportunity to grow that broadcast stream. Much of it comes from moving potentially from free-to-air to competitive pay services, that’s for example what happened in the UK, when BSkyB recently bought the rights.”
“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, or opportunities around things like gambling.
“Outside the United States there is a huge gambling opportunity in the sport, none of which we capitalize on. I think there are a bunch of ways in which digital can play through this, from a service to augmenting other things to providing data that are interesting that we are not capitalizing on, that I think will be a part of the future growth.
“Part of that is much more direct to consumer, D2C kind of experiences. How that augments, and how we work that in with traditional broadcasters, needs to be worked through. But I think that there’s a lot of material to work with there.”