06 Mar 2017 : Greg Maffei, the chief executive of Liberty Media, the new owner of Formula 1, has indicated that there is potential to significantly increase broadcasting rights revenues in USA, claiming that the current deal is of negligible value.
Maffei (pictured) used the slang phrase “popcorn fart” to deride the contract with US national broadcaster NBC, which shows most of the coverage on NBC Sports Network, its dedicated cable sports channel.
Last year, Comcast-owned NBC renewed its rights deal for Formula 1 by a year to cover the forthcoming 2017 season,
Forbes reported today that, speaking at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco last week, Maffei said: “The US is, you know, it’s a popcorn fart. It’s nothing. The opportunity is good, certainly in percentage terms, not in absolute dollar terms. It is very low. It is with NBC, and it [most of the season] is not on the main NBC, it’s on their sports channel.”
NBC picked up the rights in an initial four-year deal from 2013 to 2016, outbidding Speed TV, the now-defunct US cable network owned by Fox Sports, which had been the long-standing Formula 1 rights-holder in USA.
At the time of signing the agreement, NBC said that it would ensure over 100 hours of programming across its main national network and NBCSN.
NBC was thought to have committed a rights fee of around $3 million when agreeing the deal in 2012.
Liberty has identified USA as a potential major growth market following its $8-billion takeover of Delta Topco, Formula 1’s parent company, which was previously owned by a consortium led by private equity fund CVC Capital Partners.
There are plans for a new street race in a major US city, in addition to the US Grand Prix, which returned to the schedule in 2012, at the new Circuit of the Americas in Austin, Texas, following a four-year absence.
Meanwile, Liberty is to move the Formula 1 headquarters to a new location in central London.
Until now the sport has been based in offices below the flat of long-time promoter Bernie Ecclestone in exclusive Knightsbridge in south-west London.
However, in the wake of the recent Liberty takeover, the headquarters will switch to the fourth and fifth floors of a $500-million development in St James’s Market, close to famous Piccadilly Circus.
In an email statement confirming the move, Sacha Woodward Hill, Formula 1’s general counsel, said: “Formula one is a global sport, attracting audiences of 400 million, and London is the perfect place to grow our international fan base.”
As part of the takeover of Delta Topco, first announced in September of last year, Liberty agreed to take on $4.1 billion of debt.
Last Thursday, the company announced the closing of the refinancing of a $3.102-billion first term lien loan executed by certain subsidiaries of Delta Topco.
Following the takeover, Liberty installed Chase Carey, already the Formula 1 chairman, as chief executive, supported by Sean Bratches, formerly of ESPN, as managing director, commercial operations, and Ross Brawn, the experienced former team boss, as managing director, motor sports.
Ecclestone, who oversaw Formula 1 for four decades, was offered a new advisory role as chairman emeritus.