Starting next year Disney will pay a reported $75 to $90 million to televise Formula One Racing. A … [+]
With live sports dominating TV viewing trends and a number of networks vying for the rights to televise games, the rights fees for lower rated sporting events have been escalating. Besides the 10-year $2.5 billion agreement Major League Soccer struck with Apple TV+, several other agreements have been reached over the Summer including Formula One racing, The UEFA
Besides potentially strong ratings, there are several other reasons for the increase in media rights fees. The first is to keep these events from going to such deep pocket video streamers as Apple TV+ and Amazon
Formula One Racing: In late June Sports Business Journal reported that Formula One Racing has extended their U.S. media agreement with Disney. Under the new three-year deal, Disney will pay between $75 million to $90 million annually. This is a sizable increase from the $5 million annual agreement Disney had made with F1 racing back in 2019 which runs out this year. With the new agreement, most F1 races will air on either ESPN or ABC. A few races will also be streamed on ESPN+. The new deal expires in 2025.
It was reported F1 Racing had rejected bids from Comcast
F1 ratings have been improving in the U.S. This year, through the first five races on ESPN, viewing has increased year-over-year by 49%. In July, ABC aired the Formula One race in Miami which averaged a record 2.4 million viewers. Also, helping to increase interest in F1 has been Formula 1: Drive to Survive which provides viewers a behind-the-scenes look at the sport. The docudrama has been streaming on Netflix
UEFA Champions League: Another recent negotiation reporting a sizable increase in U.S. media rights fees was soccer’s UEFA Championship League with Paramount. In August, Paramount renewed their U.S. English language agreement with a six-year deal valued at $1.5 billion. The Hollywood Reporter says the price is 2.5 times higher than the current pact between Paramount and UEFA.
With two years remaining on the current contract, Paramount will be the U.S. home for the UEFA Champions League through 2030. With the U.S. being one of the host nations to the 2026 FIFA World Cup, it is expected soccer’s popularity will continue to grow. The UEFA is still negotiating its U.S. Spanish language media rights agreement.
Reportedly Paramount outbid other prominent media companies including Comcast which was bidding on both English and Spanish language packages. Amazon was reportedly in the final round of negotiations with Paramount. Amazon has the U.K. rights to stream UEFA Champions League.
Founded in 1955, the annual UEFA Champions League tournament begins in late June and involves the leading soccer clubs across Europe. The tournament has a round-robin stage with qualifying clubs advancing to a double legged knockout round followed by a single elimination championship match. Real Madrid is the current champion.
Big Ten Men’s Conference: Of late there has been a lot of movement with colleges and athletic conferences. For example, last year Texas and Oklahoma, two of the most prestigious Big 12 football schools, announced they were leaving to join the Southeastern Conference (SEC). A few months later The Big 12 announced they would be adding Cincinnati, Brigham Young, Houston and Central Florida to its conference. College movements have continued into 2022 when in July UCLA and University of Southern California announced they were leaving the Pac-12 to join the Big Ten in 2024.
The addition of the two Los Angeles based schools made the 16-school Big 10 a nationwide conference with east coast schools Rutgers and Maryland joining in 2014. The Big Ten will have a local school presence in the four largest TV markets; New York (Rutgers), Los Angeles (UCLA and USC
In August the conference reached a seven-year, $8 billion agreement (averaging over $1 billion per year). The new rights contract starts on July 1, 2023 and runs through 2029-30 with Fox/FS1, CBS, NBC/Peacock and The Big Ten Network as media partners. The new agreement shuts out ESPN which had been televising Big Ten contests for the past forty years. While football is the most popular sport, the agreement includes basketball (men’s and women’s) as well as Olympic sports.
Looking at the new agreement for college football, The Athletic says Fox will televise games starting at 12 noon on Saturdays. Beginning in 2024 CBS (after its SEC contract ends) will televise games with kick-offs at 3:30 p.m. NBC will then air “Big Ten Saturday Night”. This will provide college football fans with three Big Ten football games every Saturday across three broadcast networks. In addition, Peacock will exclusively stream eight football games each season.
The networks will alternate televising the Big Ten championship game with Fox televising in odd every numbered year and CBS/NBC alternating in even numbered years. Last year the championship game averaged 11.3 million viewers. According to Nielsen, in 2021, regular season matches generated an average audience of over 4.1 million viewers across Fox/FS1 and ABC/ESPN.
What’s Next: Upcoming media rights negotiations include NASCAR
Last week, the College Football Playoffs announced they will expand the tournament to include twelve teams. The move will happen no later than 2026 when the current media rights agreement expires. ESPN has had the exclusive rights paying an annual fee of $470 million. While ESPN s expected to bid on a contract renewal, it is possible the CFP will be televised (and streamed) across several networks with a sizable increase in cost.
The soaring increases in media rights for live sports is also an offshoot of the poor ratings that scripted dramas and comedies have been undergoing. While live televised sports face the same fragmented landscape, the audience erosion has not been as prevalent. As a result, media companies besides outbidding their competitors look at live sports as the last bastion of appointment viewing.
