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James Murdoch is spearheading News Corp’s bid to take over Formula One motor racing, according to Sky News. Murdoch and his father Rupert are considering teaming up on the venture with Carlos Slim, the world’s richest man and Latin America’s biggest pay-TV operator. Wall Street bank JP Morgan is advising News Corp. If successful, it would be the first time the Murdochs have owned an entire sport outright. They already control TV rights to lucrative Premier League soccer in the UK.
Cable TV channel Speed, also owned by News Corp, currently broadcasts Formula One racing in the U.S. The Murdochs would want to feed Formula One exclusively to their pay-TV global empire, which includes Sky Latin America, Sky Deutschland and Star TV in Asia. But Formula One teams such as Ferrari, McLaren and Mercedes would be worried about the Murdochs taking control of their sport, sports market analyst Sportcal tells me. Formula One relies on sponsorship for most of its income, and sponsors such as Spanish bank Santander, Shell and Red Bull need TV exposure. Taking Formula One behind a pay-TV paywall would meet serious opposition, says Sportcal editorial director Callum Murray. “It would totally change their funding model,” he says.
European anti-trust regulators would also scrutinise the deal carefully. Ten years ago, German pay-TV mogul Leo Kirch bought Formula One for the same reason: he wanted to feed motor racing rights exclusively to his Premiere pay-TV channels. The German anti-trust regulator told Kirch he could buy Formula One, but he could not feed motor racing direct to Premiere. “Based on precedent, this could be what the European competition authority tells Murdoch a decade later,” says Murray. “They could say, ‘Fine, you buy Formula One, but you can’t just feed it to News Corp TV channels.’ ” Formula One is currently owned by CVC Capital Partners, a big private equity firm that acquired the sport outright in 2006. The Murdochs are unlikely to spring their move until the end of 2012, though. That is when Formula One’s current agreement with motor racing teams expires. News Corp was unavailable for comment.
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UK — Murdoch
Italy — Berlusconi
Mexico — Slim
China — Communists (?)
USA — TBD…
Love the idea of Murdock taking over Formula One. Fantastic! Forget advise from JP Morgan. Murdock wouldn’t have become this successful today by listening to other guys who are less successful than him…Murdock should trust his own ideas and vision! This idea is so cutting edge, hot, and sexy and a lot of $$$$$$. It’s how you do it baby! Gotta have fun when making $$$$$
! Absolutely they should take over Formula One!
Murdock is pure, phone tapping poison. How can an organisation that lies and lies until it is found out, possibly take over a sport? To get better viewing figures they’d rig it somehow. Hot and sexy? Predictable and porno more like.
U.S. Formula One (or 1) viewership has been in disarray ever since F1 stopped running an actual F1 race here in the States. I watch on Speed Channel, but the broadcasts themselves are lame & heavily edited (some of the “pre-race interviews” are beyond banal)……and are very slanted to British viewers (another reason for the Murdoch’s to go after F1). As America currently has no one driving in Formula 1, the interest level to satisfy and boost U.S. viewership is lower than low. This Murdoch Move would be primarily for the “rest of the world’s ” TV markets as the sport is very popular and does draw high ratings throughout those countries that do have a localized broadcast and especially also a F1 Race. Charging a premium for something that world-wide viewers currently get (in effect) for “free or not very much”, would probably not fly unless you produced a really high quality product that was far superior to the current broadcasts.
I call shenanigans. If you watched F1 as you imply, then you’d know that F1 will be back in the US next year (2012) racing on Austin, Texas’s brand new Circuit of the Americas.
The races aren’t heavily edited (unless you count showing ads during the race as “heavily edited”). Speed also just began airing qualifying live, and streaming or broadcasting all three practice sessions. As for the supposed British bias… what? American F1 fans love Speed’s three main announcers and even refer to them as “The Three Amigos”.
You’re of course entitled to your opinion, but you hardly speak for the majority of American F1 fans.
Jeffry…You have absolutely no idea what you are talking about.
F1 races on SPEED are live…no editing, as are practice and qualifying. The pre-race is informative and up to date, and the 3 announcers are experts…they know what they are talking about.
I attended the 1st two races in Indy when F1 returned in 2000….There was no american drivers, yet over 200,000 people showed up. There is interest, believe me.
Until you’ve seen BBC’s live (and after the fact iPlayer on-demand) coverage of F1 including all practice sessions, qualifying (with a one hour pre-show from the paddock and pitlane), the race (with a 30 minute pre-show from the pitlane) and the after Forum – all commercial free – you have NO idea how good coverage can be. The coverage SPEED provides is, unfortunately, poor by comparison.
I agree. I like the Speed guys but they pale in comparison to Martin Brundle and David Coulthard on the Beeb. Both of them are seasoned F1 drivers themselves and give tremendous color and detail to the teams’ strategies and more importantly what it’s like to be in an F1 car going thru turn 8 at 162 MPH.
The BBC already provide a very high quality viewing experience for free for UK viewers (where F1 is a hugely popular sport), so this would be all downside from their POV.
As per the original article, this measure would cut viewership of the sport drastically, so those of us who don’t want to pay to watch will just have to hope the F1 teams don’t want to be owned by Murdoch.
Don’t be a cynic.
The whole point is to lock down the entire delivery chain, get people to pay, and still have advertising.
Oh look, Steve Jobs is lubing the arsehole of the pterodactyl that landed in my backyard.
Before anyone starts piling on about the evil Murdoch empire, note that F1 was run by a bunch of tools, and this is actually a major improvement.
Should be a big payday for Bernie . . . god knows he needs the money.
Arrgh! One of the reasons I love watching current F1 coverage is exactly because it’s not some hyper-marketed, jingoistic, cheese-fest like every other American sport. I like the impenetrable accents and esoteric jargon. I like the off-track intrigue and gossip. I like the foreign-ness of it. Can Murdoch keep his oily paws off this one thing?! Can I just watch guys risk their lives driving really fast without going through some NewsCorp approved portal designed to optimize revenue streams?!
Technically CVC doesn’t own F1. What they own are the companies that currently hold the “commercial rights” as authorized by the FIA (Fédération Internationale de l’Automobile). It’s the FIA that “owns” F1. In return for the “commercial rights” CVC turns over a percentage of the revenue to the FIA and a percentage to the teams. I seem to recall, but I could be wrong, that the current agreement between the FIA and the “commercial rights holder” expires in 2012 as does the current Concorde Agreement.
As mentioned above, anything that negatively impacts viewership will impact sponsorship, which the teams won’t like. But the teams will also be very concerned about “commercial rights” income, especially the TV income. Right now, it’s in the best interest of the FIA, the teams and CVC for CVC’s F1 companies to charge as much as the market will bare. But if News Corp buys the companies that hold the “commercial rights”, I’m sure both the teams and the FIA (and anybody else with half a brain) could imagine a situation where News Corp might feel it was in their best interests to give their own TV networks a low cost deal on the broadcast rights. Needless to say that will worry the teams. Keep in mind that F1 is nothing without the teams, and unlike NASCAR or IRL there aren’t a lot of teams competing in F1 or even capable of competing in F1. And those teams are organized and they bargain with the FIA and CVC’s F1 Group with one voice – the FOTA (Formula One Teams Association). Moreover, the current President of the FIA, elected in 2009 is the former team principal at Ferrari and a founding member of the FOTA. So you can be pretty certain that the FIA and the FOTA aren’t going to allow anything that could negatively impact TV income or the ability of the teams to raise money via sponsorship.
News Corp (Murdoch) was founded in Australia and reincorporated in Delaware… Not a UK company.
Daddy! I want a racing franchise NOW!
Cool. Maybe he can add a couple of oval tracks for market to the US.
F1 has it in their internal covenants that TV coverage CANNOT be pay-per-view. This deal won’t happen as described.