As the global auto sport explodes in popularity and U.S. media rights for Formula 1 are for the taking in 2023, Netflix, ESPN and NBCUniversal have reportedly been eyeing the international auto racing circuit.
Insider reported on Monday that the three companies are bidding for a new streaming license for F1, which begins in 2023. NBCUniversal told TechCrunch that it has nothing further to add to the Business Insider story. Netflix did not respond.
Disney-owned ESPN is the only company so far that has confirmed. In a statement to Insider, John Suchenski, director, Programming & Acquisitions, ESPN, said, "We are aggressively pursuing a renewal — we feel that we have a distribution package and event presentation that can't be matched in the industry … It has been a mutually beneficial relationship."
"Understandably, they are looking at other options," he added.
ESPN is currently the rights-holder in the U.S. for F1 and has been since 2017. The rights expire at the end of this year, and F1 is targeting $100 million for the rights, according to the report. Reportedly, ESPN submitted an opening bid of about $70 million, well below the targeted figure.
Comcast's NBCUniversal held the rights for the previous five years. At the beginning of 2022, NBC shuttered NBCSN, its all-sports channel. Comcast's satellite broadcaster, Sky, holds the U.K. and Ireland rights to Formula 1, a deal that ends in 2024.
Sources told Insider that Netflix is among the suitors and has been holding talks for months. However, they also said the company doesn't have an in-house sports negotiator, which could put them at a disadvantage.
Netflix CEO Reed Hastings has alluded to thinking about bidding for F1 rights. In September 2021, he spoke with German magazine Der Spiegel, hinting that Netflix is considering buying into the sports category. He said, "A few years ago, the rights to Formula 1 were sold. At that time, we were not among the bidders today; we would think about it." He added that Netflix would be interested only if it could “control the source” and win exclusive rights.
Recently, Ted Sarandos, co-CEO of Netflix, said during the Q1 2022 earnings call, “I’m not saying we never would do sports, but we would have to see a path to growing a big revenue stream and a big profit stream with it.” So while he did say that Netflix wouldn't use live sports to generate new subscribers, live sports aren't necessarily banned from Netflix's future plans.
Netflix’s long-running docuseries, "Drive to Survive," has been credited for fueling Americans' interest in the team-based auto racing event. Morning Consult stated that Americans who identify as fans of the sport have increased by 33% over the past two years, per survey data. The global decision intelligence company also wrote, "More than half of F1 fans (53%) said the series, which debuted in 2019, played a role in their becoming a fan, including 30% who said it was a 'major reason.'"
After suffering a 200,000 subscriber decline in the first quarter, the company’s views towards live programming and advertising have changed. The streamer will be getting a cheaper ad-supported tier later this year and has also confirmed that livestreaming plans are in their early stages for programming -- like stand-up comedy specials and reality TV shows. Live sports have yet to be touched by Netflix, but it is looking like the company is considering it.
It would be in Netflix’s best interest to keep up with its rivals as the streaming wars only gets tougher. For instance, Apple recently made a deal to stream Major League Baseball and is bidding on NFL's "Sunday Ticket." Peacock also grabbed the exclusive rights to dozens of MLB games. Amazon Prime has exclusive streaming of NFL's "Thursday Night Football," as well as 21 New York Yankees games exclusively in the New York market. Disney and Warner Bros. Discovery already have a range of sports content.
If Netflix does win the rights to Formula 1, it would be a significant pivot for the company.