The power of Netflix is fully on display over at ESPN. The popularity of Netflix’s smash-hit F1 racing reality series “Formula 1: Drive to Survive” has driven the TV rights for Formula 1 races sky high. The large pricing increases came about as fast as an open-wheel racing car hits a straightaway.
On Friday, Sports Business Journal reported F1 and ESPN have reached an agreement to renew their rights deal through 2025. The publication reported ESPN will pay $75-$90 million annually for the next three years, a gigantic raise from the $5 million ESPN is currently paying the racing league each year. (That 2019 deal, so pre-pandemic, was also for a span of three years.)
A person with knowledge of the new handshake agreement told IndieWire the unsigned deal is on “the lower side” of the range reported by SBJ. That means, conservatively, ESPN will be paying 15-17 times more than it has been — and it wasn’t even the highest bidder. Amazon offered $100 million (20x ESPN’s current deal!) per year, the publication wrote; Comcast’s own offer was similar to ESPN’s in terms of money. Netflix was a bidder as well, but the money “wasn’t close,” according to Sports Business Journal. Hey, it’s belt-tightening time around the Netflix offices.
When reached by IndieWire, spokespeople for Amazon Prime Video and NBC Sports declined comment on the reported bids. Netflix did not immediately respond.
The pending ESPN deal allows for a small number of races to stream exclusively on ESPN+, but most races will air on linear television via ABC or ESPN. (Each serious bidder for F1 racing had a streaming component to their offer; John Malone, the owner of F1 through his Liberty Media company, understands the value of cable better than anybody.) While live sports and streaming are just feeling each other out — “Thursday Night Football” is moving to Amazon Prime Video and Apple TV+ has a Friday night Major League Baseball package — linear television is still the main place to be.
The 2021 Formula 1 season was the most-watched ever on American television. All told, with races airing on ABC, ESPN and ESPN2, the 2021 F1 season averaged 934,000 viewers per race in 2021. That shattered the previous season-long record of an average of 748,000 viewers way back in 1995.
Through nine races in the 2022 season, viewership is up big from last year’s record. The current season is averaging 1.3 million viewers per race, which is about 40 percent better than 2021. Last month’s Miami Grand Prix averaged 2.6 million viewers, the most ever in the U.S. for a live F1 telecast.
Of course, all of that linear television success follows the streaming success of a very popular F1 docuseries. Season 4 of “Formula 1: Drive to Survive” debuted as the number five show on Netflix for the week of March 7-13, with more than 28 million hours viewed in just five days, according to the streaming service’s Top 10 website. The following week, Season 4’s first full week of availability, it climbed to fourth with just over 29 million hours.
“Formula 1: Drive to Survive” debuted in 2019; Netflix was not publicly sharing viewership data when any of the previous three seasons premiered. In May, Netflix renewed “Drive to Survive” for another two seasons. For the real thing, check out ESPN. After this price hike, they could use the advertising revenue.