Disney’s F1 Renewal Is a $255M Play to Rev Up ESPN+ Subs
In confirmation of what may have been one of the worst-kept secrets in sports media, the Walt Disney Co. on Saturday announced that it has re-upped with Formula One, inking a new deal that will keep the racing circuit cruising on the ESPN family of networks through 2025.
Under terms of the renewal, a minimum of 16 F1 races will air on ABC and ESPN each season, and (as has been the case since 2018) each event will air without any commercial interruptions. While financials were not disclosed, sources said that the new pact is valued at around $85 million per year, for a total of some $255 million over the course of the three-year term.
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The 17-fold increase in Disney’s rights fee is extraordinary, but it coincides with F1’s recent ratings surge. Per Nielsen, F1 races are currently averaging 1.2 million viewers across ABC, ESPN and ESPN2, which marks an increase of 26% versus last season’s record TV turnout (949,000). ABC in May notched an all-time high-water mark for a stateside F1 broadcast, as its coverage of the race portion of the Miami Grand Prix averaged 2.6 million viewers. (When the 90-minute pre-race segment is factored in, the overall presentation delivered 2.07 million viewers.)
That same afternoon, the cable network Fox Sports 1 averaged 2.62 million viewers with its coverage of a NASCAR Cup Series race from Darlington Raceway. While F1 is making the most of its spike in popularity, NASCAR still outdraws its rival by a heady margin. On Sunday, Oct. 2, NBC averaged 2.83 million viewers with its coverage of the NASCAR Cup Series race from Talladega Superspeedway, eclipsing the 1.04 million viewers who tuned in to ESPN2 for the Singapore Grand Prix earlier that same morning.
NASCAR races feature approximately 33 minutes of commercial time per race, which nets out to around 115 units. The ad breaks go a long way toward recouping some of the $820 million annual rights fee shared by NASCAR media partners Fox Sports and NBC Sports. While the commercial-free F1 races don’t necessarily generate much in the way of linear-TV revenue, the expanded direct-to-consumer rights negotiated by Disney under the new deal should help spur more motorsports fans to sign up for ESPN+.
The particulars of the new F1 deal were largely hashed out this summer. The renewal was announced on the eve of the U.S. Grand Prix race in Austin, Texas, which also serves as the final stop on F1’s two-stop U.S. swing. The race will air on ABC Sunday afternoon.
While Disney’s bid to re-up with F1 was challenged by other media firms—Amazon put together a blockbuster offer that was said to be worth $100 million per year, only to be rejected by F1, and NBC parent Comcast also failed to snatch away the package—the auto racing organization preferred to stick with the incumbent.
“Formula One and ESPN have been a strong and successful team and we’re delighted to extend our relationship,” said ESPN president Burke Magnus, by way of confirming the renewal. “We look forward to serving fans in some new and innovative ways in the next three years as we continue to bring the reach and relevance of the Walt Disney Company networks and platforms to Formula One.”
Beginning next year, the London-based F1 will stage three races in the U.S., adding a tour of the Las Vegas Strip to its roster of Austin and Miami events. Mexico City and Montreal will also host events in 2023, which should work to Disney’s advantage. Races in far-flung time zones can be a challenge, as was made evident by the Oct. 8 Japanese Grand Prix, which averaged 549,000 viewers after getting underway last Saturday at 1 a.m. ET.
“After Formula One returned to the ESPN networks five years ago, the popularity of the sport has grown impressively,” said Ian Holmes, director of media rights and content creation for F1. “The extension and expansion of our partnership is a reflection of exciting times ahead and a result of our shared desire to bring Formula One to as broad and diverse an audience as possible in the U.S.”
F1’s first home network in the U.S. was ABC, which began airing races 60 years ago, starting with the 1962 Monaco Grand Prix. ABC shared the road with CBS through the early 1980s, until ESPN began its own tie-up with the sport in 1984. After a 14-year run, ESPN and F1 parted ways, only to reunite with a new, ABC-inclusive deal in 2018.
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