BBC says F1 coverage cuts will save ??150m

Television

Eddie Jordan, Jake Humphrey, Mike Gascoyne, Barcelona, 2011

Jake Humphrey presents the BBC's F1 coverage

BBC director general Mark Thompson says the corporation will save ??150m by dropping half of its live F1 races.

Speaking before the Culture, Media and Sport committee Thompson said the BBC had approached Sky about the deal and did not enter into negotiations with any other free-to-air broadcasters.

He said: “The idea of sharing the rights under the remainder of the current contract and of potentially extending that contract was our idea. There was a negotiation that led to all the parties involved in the conversation being happy with the idea.

“The effect will be to save the BBC well over ??150 million between now and the end of the contract-money that obviously means that only half of Grand Prix will be live on the BBC, but it has enabled us to keep a very good position in Formula 1, and to make savings that otherwise might have meant deeper cuts in other services.

“As for the considerations for us, we know that Formula 1 has only fairly recently come back to the BBC; it has been very popular on the BBC. Secondly, we know that Formula 1 fans ideally do not want Formula 1 to be interrupted by advertising, because of the character of the sport.

“Nor, of course-for the subset of Formula 1 fans who do not have Sky subscriptions-would they, ideally, like Formula 1 to go entirely behind a paywall. I believe that the arrangements that we have reached offer very good value to the licence payer, and the experience of Formula 1 on the BBC will still be very rich.”

Asked if the BBC had approached free-to-air broadcasters Thompson said: “No, and to be honest I think that I would have already been on the edge of the limits of what it is appropriate to do, in terms of the appropriate separations of sports buyers in the market under the Enterprise Act.”

He continued: “We were quite clear that, to get the economics to work for us, it was going to have to be a pay partner, and this was the only pay partner, credibly, whom we thought we could involve in it-indeed, a pay partner who had expressed interest in this very topic of conversation previously. It was an example of a free-to-air pay partnership, which is not by any means unknown in the market.”

The government imposed a six-year freeze in the BBC’s licence fee in October last year, forcing it to make significant cuts in spending.

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110 comments on BBC says F1 coverage cuts will save ??150m

  1. In defence of the BBC: to be honest I can see why people might be upset with the BBC, but unfortunately the cold hard facts are this:

    1. The combination of Murdoch/printed press and the Hutton inquiry had directly led to the BBC cuts which have been across the board, including their biggest money spinners (which are Doctor Who and Top Gear). F1 is a significant investment and for all the fans on here who consider it a Very Important Thing, the reality is that it isn’t for the tens of millions of licence fee payers that aren’t fans (or are just casual viewers).
    2. The BBC had no moral obligation to negotiate with Channel 4. Yes, you want to keep it free to air, because then you wouldn’t have to pay more money. That’s pretty selfish of you. I can bet you good money in an alternative universe where Channel 4 got the deal, internet boards like this are full of “OH NO NOT ADVERTS AGAIN WE ONLY JUST GOT RID OF ITV AND JIM ROSENTHAL’S SCARY FACE AND STEVE RIDER’S COMPLETE LACK OF PERSONALITY” etc. etc. repeat ad nauseam. Just because you pay the licence fee doesn’t make you justified in your criticism of the BBC’s budgeting decisions. You try doing that job, with independence of your personal preferences.
    3. You get half the races live, and half as highlights. If you’re watching every race live now anyway then you really need to do more with your Sundays. Or stop missing out on sleep so much.
    4. What about Bernie charging so much money for the rights? Surely if he wasn’t so money grabbing the BBC could accommodate this.

    Look, I’m no fan of Sky or moving the rights away from the BBC’s excellent coverage but there is a commercial reality at play here that all this whining at the BBC will not change. It’s not the BBC’s fault (although they of course played a part). The fault, if anything, lies with Murdoch, Hutton, Blair (for setting up the Hutton inquiry) and maybe Ecclestone. Not the BBC.

    • “If you’re watching every race live now anyway then you really need to do more with your Sundays. Or stop missing out on sleep so much.”

      You make it sound as if watching every race live is something to be frowned upon and a waste of time. This site is called F1 Fanatic, I would have thought watching all the races live if possible is a given for most people on here.

      There is nothing up with being a casual fan but there is no need to criticize those of us who like to watch every single F1 session live if we can.

      Some of the comments about the BBC which were posted when the news first broke were a bit extreme, such as they should ditch BBC4 instead. The BBC has to cater for everyone and it is hard balancing act to manage. I normally stick up for the BBC when people say they should scale and I think the service the BBC provide from TV to Radio and the Internet is brilliant.

      However the way the BBC has handled the situation and the fact that it seems they didn’t even look into the options for keeping all the races live on free to air before selling out to Sky means the BBC does deserve some criticism.

      Ecclestone definitely deserves some of the blame, he has chosen short term financial gain over the long term popularity of F1 in the UK in agreeing to this deal.

      The teams may not have had any real power to stop this but as they didn’t put up much of a fight, in public at least, they have no right to claim they are on the side of the fans and want to do what is best for us next time they have a disagreement with Ecclestone or the FIA.

  2. Dot Kewley said on 21st December 2011, 20:17

    I listened to Mark Thompson live on radio when he answered (tried not too) the Select Committee, well for his information we “subset” F1 fans without sky have now got 39,000 signatures to keep F1 free to air. His comment was derogatory, made out we were the lowest of the low and not “real” F1 fans. He did not address the issues as to the many reasons we are not sky subscribers, nor did he care. The BBC have failed to respond to over 40,000 complaints from F1 fans.
    We have however decided to turn negative into positive and eventually hope egg ends up on his face, we will be tweeting during every race, even when unable to watch, when you see #SpecialF1SubSet come join us.

  3. Looking forward to watching F1 on Sky & getting the best coverage since F1 digital+.

    I’d be more annoyed had F1 gone off to Channel 4 who probably would have shown commercials & not had any additional live coverage (such as the extra feeds Sky will offer us).

    Sky coverage sould like an F1 fans dream, Tons of additional content, tons of analysis, Tons of extra data & a lot more in-depth technical stuff, The sort of stuff many fans have been asking for for years.

    F1 been shown on Sky is the best news ever in that regard.

  4. Andrew Hall said on 21st December 2011, 22:19

    It would seem that reading between the lines, everyone in this forum that is happy with the situation has Sky already!

    What if the BBC just showed the races live, without all the coverage either side of the race, how much would this have saved? As much as I like Jake Humprey, I could have lived without all the buildup and post race coverage.

    I’m sure no-one cares about my personal situation, but we’ve just had to get rid of pay-tv in our house due to our financial situation, and in this current economic climate, there are many more people in the same boat as us.

    This deal is definitely very short sighted, short term gain at the expense of the audience figures. Sure, some people will get Sky, and some won’t. Casual viewers which F1 has been trying to attract for years will disappear as the complication (however minor) of knowng where to watch which races will be too much bother for the casual viewer.

    As for myself, I love F1, it’s the only sport I follow, but I can’t afford/justify getting Sky for a single sport that’s only on fortnightly for half the year. If I watched football, then it wouldn’t be so bad as there’s loads of football to watch, but not so with F1. The upshot of all this is likely to be my family losing interest in F1, with only half the races being shown live, and just highlights of the others, we may very well stop watching altogether.

    Surely the loss in sponsorship is going to be massive for the teams in the long term. What if Sky decides in future that they don’t want F1 after all, will the teams be able to suddenly ask sponsors to give todays sums of money once again if they need to switch back to being on FTA channels.

    As was said at the start of this thread, I too would have preferred all the races live with adverts than this stupid half and half deal.

  5. John H (@john-h) said on 21st December 2011, 22:29

    We were quite clear that, to get the economics to work for us, it was going to have to be a pay partner

    Everything that’s wrong with how this happened is in that there sentence. Should the BBC, funded by the tax payer, be doing things for itself at the detriment of the people that fund it? How is Sky any less of a player in terms of the Enterprise Act.

    I still find the whole thing a disgrace to be honest, even if many are starting to get used to the idea.

  6. Prisoner Monkeys (@prisoner-monkeys) said on 21st December 2011, 22:32

    The BBC is, first and foremost, a business, and so it must be run as one. As a business, its first, last and only purpose is simple: to make money. Halving their Formula 1 coverage might be an unpopular move, but at the same time, £150 million is a lot of money. It’s more than the operating budget of most Formula 1 teams; in 2010-11, the BBC were spending more on Formula 1 than they were on BBC Three and BBC Four. The BBC evidently feel that saving that £150 million is more important than retaining their market share with Formula 1. You might think that is insane, but from a completely objective point of view, it does make a lot of sense. Like I said, £150 million is a lot of money, and with Europe staring down the barrel of financial chaos, organisations like the BBC have to be very careful how they spend their money.

    • John H (@john-h) said on 21st December 2011, 23:05

      If the only purpose of the BBC was to make money then why doesn’t it have pay per view services itself? The BBC is funded by a compulsory licence fee which even people that only watch sky have to pay. This is not free market capitalism at work.

      No one is arguing that the BBC doesn’t need to save money, they are angry as licence fee payers that negotiations were solely with Sky.

      • Prisoner Monkeys (@prisoner-monkeys) said on 21st December 2011, 23:25

        It’s llikely the BBC negotiated solely with Sky because of the wording of their contract with FOM. If they had handed the rights to the sport over to another commercial station, they would have given up all of their Formula 1 coverage – and they would have taken a massive financial penalty for offloading the rights before the contract expired. It’s unlikely a joint broadcasting deal could have been worked out, because then the BBC and their partner would have gotten into a row over who got to broadcast which races. But their contract with FOM and the Concorde Agreement allowed for a deal with Sky.

    • Ilanin (@ilanin) said on 22nd December 2011, 2:32

      The BBC is first and foremost a business

      Stop right there. The BBC is not a business. The BBC is a public service broadcaster. Nowhere in the BBC’s Royal Charter is there any requirement for it to make a profit. The actual public purposes of the BBC are (quoting verbatim from its charter):

      The Public Purposes of the BBC are as follows—
      (a) sustaining citizenship and civil society;
      (b) promoting education and learning;
      (c) stimulating creativity and cultural excellence;
      (d) representing the UK, its nations, regions and communities;
      (e) bringing the UK to the world and the world to the UK;
      (f) in promoting its other purposes, helping to deliver to the public the benefit of emerging communications technologies and services and, in addition, taking a leading role in the switchover to digital television.

      The promotion of Formula One, which David Cameron (quite reasonably) called “an incredible British success story” fulfills points (d) and (e) very well, and given the technical nature of the sport it also provides avenues for (b) and (c).

      • Prisoner Monkeys (@prisoner-monkeys) said on 22nd December 2011, 3:00

        @ilanin

        Stop right there. The BBC is not a business. The BBC is a public service broadcaster.

        The BBC has income and expenses. It has assets and liabilities. It is a business.

        Nowhere in the BBC’s Royal Charter is there any requirement for it to make a profit.

        Nevertheless, I’m quite sure the government prefers it to behave like a business so that they don’t need to bail the BBC out every year. If they did, the inevitable question would be “Why don’t you start cutting some of your costs?”, which would be qickly followed by “Because if we keep have to bailing you out, we’re going to make those cuts for you”.

        While the BBC might not be a business by the letter of the law, it is a business in spirit, simply because it can meet its purpose more effectively if it as run as a business. Trying to say “The BBC is not a business, so any argument that the BBC dropped Formula 1 on business ground is a poor one” will not get you very far.

        Formula One, which David Cameron (quite reasonably) called “an incredible British success story”

        Except that it’s not British. Well, not just British. The current World Champions are a German driver and an Austrian team. There is just one race on the calendar that is held in England. There are more French and German competitiors than there are British. Formula One might have started in Britain, but other countries have more claim to its current success.

  7. F1 Omer said on 21st December 2011, 22:58

    UK viewers, if you spend about £50 on a Standard Definition satellite receiver and also have a dish to point at the Astra satellite at 19.2 degrees East you can receive free broacasts from the german station RTL which has a contact to broadcast F1 free to air until 2015. Commentary is in german and there are adverts but the pictures are more important than the commentary and if we are lucky BBC 5 Live may provide a radio commentary. So there is no neccessity to pay greedy SKY any money at all.

  8. F1 Omer said on 21st December 2011, 22:58

    oops for contact read contract.

  9. Prisoner Monkeys (@prisoner-monkeys) said on 21st December 2011, 23:00

    I think the BMW Sauber collaboration was working. They were, after all, third in the WCC. But the problem was that the F1.09 was a terrible car, and it was very expensive to turn it around. This itself wasn’t that much of a problem; the real issue was the global recession. BMW were hurt by it, and they simply couldn’t justify keeping BMW Sauber alive. If it weren’t for the recession, we’d probably still have BMW Sauber on the grid.

  10. UKFan (@) said on 21st December 2011, 23:13

    How can someone save £150M this just means that F1 costs much more, how?! let me see sending an oversized crew doenst cost that much still they are going to send an oversized crew, where do they waste money? im puzzled. I know if BBC wants profit they should use this small amount of money to… I dont know…. build an F1 team let me see if covering half of the races means saving £150 not broadcasting at all gives them £300M perfect to start your own winning racing team.

    To be honest they might as well be washing money I dont care not anymore neither you should.

  11. Rugel (@rugel) said on 22nd December 2011, 0:41

    I’m from Canada and was wondering what happens to the rest of the world since BBC is not showing all the races. Anyone with a clue?

    • lordhesketh (@lordhesketh) said on 22nd December 2011, 1:15

      I’d posted a similar query earlier. I haven’t heard anything regarding TSN or SPEED’s coverage for next year. I’ve e-mailed them both and not received a response.

      • Prisoner Monkeys (@prisoner-monkeys) said on 22nd December 2011, 1:20

        I know that some broadcasters – like OneHD/Ten here in Australia – will broadcast direct from Sky’s feed. What these stations actually show is the world feed. The BBC will not control the world feed in 2012 because they are not the exclusive broadcaster. They’re a terrestrial broadcaster, like TSN, SPEED and OneHD, and they cannot control the world feed.

      • BasCB (@bascb) said on 22nd December 2011, 9:49

        I guess Speed, being Murdoch owned, will easily get the feed from sister company Sky (don’t they get the FOM feed directly though?). Not sure about others, but I guess most would be looking at doing a deal with News Corp for that coverage now.

  12. maxthecat said on 22nd December 2011, 1:14

    The BBC get tons of money, about £3 billion a year and show nothing but repeats so what an earth they spend our money on is mind boggling, in fact i recently read they spend £250 million a year chasing non licensed households for money they probably won’t ever get.

    Saying they sold out F1 fans to save money is a stupid argument and one that any half witted person would see as such.

    • UKFan (@) said on 22nd December 2011, 1:51

      Finally I read a good comment here I myself cant understand where they spend all their money what I know is that no Public company is efficient from an economical stand point, BBC are just washing their underwear with F1.

    • What an Inane statement. Hate to break it to you, but the F1 coverage is a drop in the water for the BBC in terms of ratings. and more than two thirds of their programming is original – whilst the amount of repeats is creeping up, it certainly isn’t the majority of their content.

      BBC average F1 viewing figure: 4.9 million people per race,
      BBC average Eastenders viewing figure: approx 10 million per episode.

      Expecting the BBC to prioritise F1 over their headline content is downright asinine.

  13. manatcna (@manatcna) said on 22nd December 2011, 2:00

    I heard it was £3.5 Billion and when you’re talking about that kind of money I would imagine there would be quite a few leaks.

    Whether you think of the bbc as a broadcaster or a money making machine makes no difference, they will do as they like and still pay the top people too much.

    Give me £3.5 thousand million and I’ll give you the best television in the world – as the bbc once was but will never be again.

    RIP bbc

  14. OOliver said on 22nd December 2011, 7:00

    Public private partnership means a toll gate on every street.
    Economically, there may be nothing wrong with the deal, but in principle, there is everything wrong with this deal.
    It is not for the BBC to choose what will benefit the viewers.

    Ok the BBC will show 10 live races next year, what about 2013 and onwards? Don’t be surprised when they reduce their live offering to save even more money, while describing it as the best deal for the viewers.
    The best he could have done if its to expensive, is drop it. But to decide who gets it is what have problems with.
    Believe it or not, the BBC is pay tv and their income not affected by a drop in viewership.

  15. AndrewTanner (@andrewtanner) said on 22nd December 2011, 7:47

    The offending TV License came in the post the other day.

    I’m still holding out for a good deal between Virgin Media and Sky.

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