The Sky’s the Limit

Some disappointing news today for fans of Formula 1. BBC Sport:

The BBC and Sky Sports will broadcast Formula 1 in the UK between 2012 and 2018 under a new rights deal. Sky Sports will show every race, qualifying session and practice live. BBC Sport will broadcast half the races live, as well as the qualifying and practice sessions from those races.

It would appear that the BBC had to renegotiate it’s original five-year contract that was due to expire at the end of the 2013 season, probably as a result of severe budget cuts facing the corporation. This comes on the same day that BSkyB announced it’s latest financial results:

Operating profits, excluding earnings from non-core activities such as investments, rose 23% to £1.07bn, while pre-tax profits fell 15% to £1.01bn. BSkyB increased its customer base by 426,000 in the year to give it a total of 10,294,000 subscribers. Average revenue per customer grew £31 to £539.

If Sky’s business model needed to be made any clearer; increase the amount of content exclusive to their channels before extracting more money from subscribers. Where the licence fee (currently just £145.50 a year) gets reinvested into the UK’s creative economy, BSkyB’s revenue gets returned to shareholders:

Satellite broadcaster BSkyB is returning £1bn to shareholders angered by the recent fall in share prices. On Thursday, BSkyB’s board confirmed that James Murdoch would stay on as company chairman, despite the phone-hacking scandal at News International, a News Corporation subsidiary where Mr Murdoch is also chairman.

This is hardly unsurprising. Although News Corporation owns just 39.1% of the company, in reality the Murdoch family retains full control.

Back to this new rights deal. The good news is that half of the season, including the British, Monaco and season closing grand prix will remain free-to-air, although I suspect largely to do with the rules governing the sport. Yet BSkyB’s ultimate goal will be to bring the entire sport behind its pay wall when the contract is renewed in 2018. In the meantime, it has five years in which to grow an audience – helped by its partnership with the BBC – which should placate any fears the Formula 1 teams have about decreased exposure for their sponsors.

It’s sad to see another sport risk its long term health by looking to short term financial gain, especially one as well-funded as Formula 1.

It is hard to imagine that Jenson Button or Lewis Hamilton would be racing today if it wasn’t for free coverage of the sport they grew up with. They and the other drivers should be mindful that the organisation broadcasting half of their races is one known to build up stars on it’s pay-to-view channels, before tearing them to pieces in the tabloid papers of its sister company, News International.

I love Formula 1, but not as much as I hate News Corporation and the destructive force it’s been in the UK, both within politics and in the creative sector. I’ve never paid to view Murdoch’s channels, and this decision won’t change that.