Apple’s ‘F1’ May Just Be the Opening Lap in a Bigger Race
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Apple’s F1: The Movie is turning out to be every bit the blockbuster hit the company was hoping for, but now it looks like it may just be the first step towards larger ambitions.
According to the Financial Times, Apple is now looking to capitalize on the success of F1: The Movie by snagging the US rights to stream real-world Formula 1 races on Apple TV+.
This move would represent Apple’s second big foray into live sports streaming, but the company also faces an uphill battle as it challenges the current rights holder, Disney’s ESPN.
However, like all streaming sports packages, contracts come up for regular renewals, and Formula 1 will be on the auction block again next year. While a renewal with ESPN might be a given, it’s notable that F1 has yet to finalize a deal.
The existing contract gave the sports streaming giant an exclusive period to renegotiate terms with F1 without worrying about competing bids; however, that window closed last year, opening streaming rights for the F1 franchise to other suitors. It’s unclear if ESPN failed to come to the table with favorable terms or if F1 wants the opportunity to shop around and see what everyone else has to offer.
One thing that’s certain is that Apple won’t be the only player at the table. In addition to the high probability of Disney keeping its hat in the ring, we can expect the other usual suspects to show up, including Amazon and Netflix, the latter of which has also helped to drive up interest in Formula 1 racing through its Drive to Survive documentary series.
The deal on the table is exclusively for the US rights, which are handled by Liberty Media, the owner of the Formula 1 franchise in the United States. The Financial Times notes that Liberty believes the value of F1 rights has jumped thanks to the work that Netflix and Apple have done in “attracting younger, female and American audiences to the sport.”
F1 pulled in about $300 million at the box office, and while that suggests a strong interest in Formula 1 racing, at least some moviegoers might have just gone to see Brad Pitt or enjoy the cinematography of Top Gun: Maverick director Joseph Kosinski. Either way, the Apple film and Netflix documentary, combined with an eight percent growth in global rights revenue, have led analysts to believe that rights are worth 40 percent more annually than they were when the company signed with ESPN in late 2017.
Formula 1 audiences have also more than doubled since Liberty Media took the helm for the 2018 season, when the average was around 554,000 viewers per race. This year, Formula 1 events brought in an average of 1.3 million viewers, with record numbers tuning in from Australia, China, Monaco, Spain, Canada, and Austria.
ESPN’s initial agreement with F1 was for a four-season deal that would run from 2018 through 2022. It was extended in October 2022 to carry it through to the end of the 2025 season. That deal has been worth approximately $85 million per year for Liberty Media. However, analysts at Citi estimated that the next broadcast deal would increase to $121 million per year — and that was before F1 hit the big screen.
While that sounds like a lot of money, Apple certainly has deep enough pockets to take it on. In 2022, it signed an exclusive 10-year deal with MLS for $2.5 billion to create MLS Season Pass. A streaming arrangement for Formula 1 might only cost around half that, while Apple could presumably parlay it into the same type of “Season Pass” experience that it’s done with MLS, not only offering live racing streams but also building a whole collection of supplemental content on it.
