Any one notice how the Twitter mention of it has dropped off now.

Aye because everyone is totally thinking that.

Sorry, I'm obviously a complete doofus.

The talk recently has been of Sky Sports F1 cutting back on lots of things in order to make the product cheaper - compressing two programmes into one, according to Autosport taking less than half the people to races they did at the start, etc. etc.

How does that square with allegedly paying a vastly inflated sum of money, apparently much more per season than currently?

I'm not saying it's not true - but I need some sort of help to reconcile it in my head. How can they have insane amounts of money to throw at getting and keeping the sport and yet go into penny-pinching mode to actually produce the coverage? Is it just an efficiency thing?

I think we're all wondering that!

They're clearly trying to control costs in producing the coverage, yet they're committing to paying (apparently) hundreds of millions three years into the future before the deal even starts. Who knows what state the sport will be in then (and I say that seriously) or what appetite the market will have for how sports content is consumed.

It's not even that they can seriously expect that many extra subscribers - most who'd consider taking Sky will already have it and price rises will inevitably see some cancellations.

Sky's problem is that without sports coverage they have no content and next to no business, so they're caught in a cycle of paying ever more to keep contracts. That can't carry on for ever.

As expected there is no mention of GP2/GP3 in the press release at all so it looks like the rights for that is still yet to be decided. I expect though for Sky to clinch exclusive rights to both GP2 and GP3 which would be a slight disappointment for Eurosport although to be honest I don't think they would care as the rights would cost a few pennies anyway.

What is could be interesting is that Sky might restrain from getting GP2 as it's supposed to become Formula 2 if I am correct? That might prevent from going anywhere near the deal but apart from that I don't see why Sky can't clinch a deal.

Unfortunately we then get to the problem of whether the F1 channel will exist by 2019. if not then we have the problem of GP2-F2/GP3 being put on Sky Sports 4/5 or even behind the Red Button. I do wonder though whether Sky might have an outside chance of clinching Porsche Supercup or TCR International rights if they lose the F1 channel... I wouldn't entirely rule that out...

I suspect they were worried about competing broadcasters getting the deal, and wanted to tie things up so that couldnt happen,

it doesnt mean they dont want to and wont try and cut production costs, every time the racing calendar expands, adds more costs to the production even if the the team/content is the same, its more flights, more hotel rooms, more satellite time etc.

and there are things they could cut, I tune in 15mins before a race starts, and tuneout as soon as the race ends,

£150m per year seems entirely possible - certainly I would expect over £100m (assuming contract isn't significantly undermined by FOM having streaming rights).

Look at it this way -Sky is paying over £10m per game under its new 3 year Premier League contract which runs from 2016/17 to 2018/19.

I think it can be argued that each F1 weekend is worth not that much less than an average PL game - so 20 or 21 F1 weekends for £150m doesn't look out of line.

Is it worth it for Sky? I think the content they are getting is a big upgrade on what they have at the moment - and should therefore attract significant extra subs.

The point is that the current FTA coverage is very comprehensive - it's not just that FTA has 50% of races live but the coverage of the other 50% in highlights form is very strong - almost the whole race shown and in attractive timeslots, generally only about 3 to 4 hours after the race has ended. For early morning races, the highlights are almost as good as having the live race as not many people want to get up early - so most people would just watch the rerun anyway.

So Sky taking the whole thing live don't just get the extra 50% of races live - they also close off the competition from attractive FTA highlights.

Of course Sky has to show FTA highlights - but I don't expect these to be anything like what BBC / C4 are showing under the 2012 to 2018 contract. I'd expect Sky to just show 60 minutes of highlights on Pick TV in the evening - so much less content, much longer after the race.

Finally bear in mind inflation - £150m in 2024 is a lot less than £150m in 2016.

As for giving C4 the chance to bid - well if Sky is paying £100m+ then forget it - C4 would not have had any chance whatsoever of bidding anywhere remotely near enough to persuade Bernie not to take the Sky offer.

Dude...You're not the doofus.
Jp

Hi!

Thanks

Sometimes I wonder if this sport is making doofuses (doofii?) of us all!

F1 won't attract many subs as a package and certainly offers way less value to sky.

Each PL package adds millions in subs revenue, lose football and Sky are finished. F1 doesn't have that appeal and is in definite decline. It won't be long before the teams look to something else on their own.

Remember most teams are racing for sponsors brand awareness or manufacturers brand awareness. Lose that in too many core markets and they simply will pack up and leave.

I suspect Silverstone won't be happy with this either as the lack of interest and exposure will clearly impact long term ticket sales, at the same time costs to host each race increase.

By 2019 Sky won't be taking 100 staff and 20 tons of kit around the world every two weeks as most of the production will be done in Biggin Hill. Expect to see a lot of crossover between the two companies.

According to James Allen, Sky & BT were involved in a bidding war over recent weeks with Sky's winning bid coming it at nearly 5 times what the BBC paid from 2009 to 2011, i.e. nearly £200m/year

Absolutely astonishing if true. I fail to see how they can recoup that cost given most fans who care enough to switch for full exclusivity would have done so after the split in 2012.

More from James on the deal: http://www.jamesallenonf1.com/2016/0...sive-sky-deal/

James Allen says:

- Uplift of 150% on current total fee of £70m - which would give £175m per year

- Roughly £1bn - which would be £167m per year

So looks like about £170m per year is the best estimate.

Sky is currently paying £45m per year (per JA) - so Sky will be paying £125m per year more than at present.

But important caveat is inflation - and as far as Sky is concerned that means "Sky inflation". If Sky raise prices 5% per year for 8 years in a row that's 48% compound - so £170m in 2024 would be the equivalent for Sky of £115m in today's money. Of course that assumes they can keep pushing through price rises well above inflation.

I think another issue for Sky in the not so distant future is the ever growing list of alternative viewing options, Not so much in terms of broadcast providers but from online services such as Netflix, Amazon, iplayer etc...

I've seen a lot the past 2-3 years suggesting that those who are in there teens now don't watch as much traditional over the air TV as we did in the past. They get there viewing from catch-up services like iplayer & On-Demand stuff like Netflix & a decent portion of that is on mobile devices rather than a big screen TV.

And to be honest recently i've noticed a change in the way I consume TV. I watch live news a lot but in terms of actual programming; outside of things like Motorsport I don't watch stuff 'live' as much as I used to. I've got a whole list of recordings to go through on my Sky+ box including programs which in the past I would have watched as they were been broadcast. I've got subscriptions to Netflix, Crunchyroll, NowTV Movies (Only because I got a discount code for 6 months at £3.99) & WRC+ with other streaming services likely to be added to that list in the not so distant future (WEC for example) & watch a lot of content via those now, Again including stuff which in the past I'd have watched via Sky.


Things are changing & I don't know how relevant Sky is going to be in a few years time, If anything there going to start losing more subscribers than they gain, Especially if prices continue to rise so paying stupid amounts of money for these sporting events is probably going to catch up with them within the next decade (If it hasn't started to already).

Interestingly, Live content (such as sports) still isn't an option on services like Netflix & Amazon Prime, only YouTube (and you can't charge for a live event on YT yet). Currently a streaming service from the individual sport itself seems like the main option for live events (WWE Network, WRC+, WEC App, MotoGP VideoPass).

The NowTV service has been a big success for sky, with many new subscribers year on year and current sky subscribers using the service in addition to their current sky sub.
These OTT steaming services, Netflix, Amazon prime, Google play, Apple, now tv etc are in fact fairly spread across the age range, not just the young. But the younger market has a very high percentage that do not view linear TV.
The sky deal I'm told will involve some OTT services from 2019 with a sky and FOM partnership.
Do not see FOM going alone for their own streaming service and heard nothing on this within the UK market or even worldwide, but as I said above there will be joint partnerships.
Linear TV is still the biggest pull today, but OTT are for some an all out alternative but for many its an in/out occasional addon.
Sky sports mix will not be the place for the FTA F1 viewing, that is not its intention, that channel will remain within the sky subscriber base.
I'm thinking that the highlights package that will be offered FTA will not use a current FTA sky channel like Pick, but will be produced as a sky/FOM partnership for broadcast on a terrestrial FTA channel.

I don't expect to see Sky branded coverage on a non-Sky channel and this is a 100% Sky exclusive deal.

It will almost certainly be on Pick (unless Sky can get another slot on Freeview).

The main reason I cancelled my Sky contract last year was that I realised I was spending far more time watching Netflix for £6.99 a month than I was watching Sky for £44 per month. Whilst I would have defended the Sky subscription a couple of years ago, now we have a bit more competition it suddenly looks ridiculously expensive, and that was without paying for sports or movies.

Re: FTA, It's 3 years away so perhaps Sky will launch a new (maybe HD) channel on Freeview/Freesat with F1 as part of it. There must be additional value for them getting their logo and some of their content in front of Freeview viewers.

See, if Netflix & Amazon offered coverage of live sporting events, i'd subscribe, but as they don't I have no interest in their back catalogue. It's a shame that Sky force you to pay £20 or whatever it is for their 'entertainment' package. If they just did a sports only option, i'd be more likely to subscribe.

Eurosport also offers a live streaming service which also has the additional useful feature of being able to chase-play by up to three hours. For people who can't exactly align their free time with the event time this is a boon.

That's a bit of a bonkers deal from Sky. I'm sure they will be able to cover the cost of it (they have a strong business model) but I don't think F1 is going to be anything like the subs driver they are hoping it will be.

One thing is for certain, you guys are definitely not getting any FOM streams.

James Allen seems to think that this will now happen in collaboration with Sky sooner rather than later.

I'm there will be a collaboration, but it will involve Sky using FOM's super new technology rather you being able to bypass Sky and not give them any money,

Those numbers are eyewatering. I assume Sky will be able to sell off the resultant highlights rights in order to get a chunk of money back. i.e. selling highlights back to Channel 4 etc would make more money than Sky broadcasting it themselves on Pick TV etc.

On a general point regarding sports rights, surely this escalation between the big players can't continue like this without someone running themselves out of money at some stage and/or risk collapsing the audience for whatever sport it is due to high subscription costs.