Platform Monopolization in F1 due to neoliberalism and the lack user choice despite and F1 rights.

Today, I am going to be writing about Live Television, F1 sport rights, the Idea of monopolies within Formula 1 on Television, and how sports rights in the UK affect Formula 1.

Firstly, how does Formula 1 operate?

Context

For this I will be giving some context about what Sky F1 has to offer to fans of the sport as well as alternative methods of viewing Formula 1 while living in the UK from my own personal experience.

I am also going to talking about Formula 1 operating within a monopoly. Personally, I describe being a fan of Formula 1 as being a part of a captive audience. When I have been unable to pay for access to F1 on Sky, I have usually followed along vicariously through things like Twitter and the Formula 1 app which have a second screen liveness aspect.

And finally, sport’s rights surrounding Formula 1 and the UK’s legislation when it comes to Formula 1 and how all these things affect how Formula 1 is shown on UK television.

Starting with the earlier journal I looked at by Cowie and Williams who analysed the supply and demand for sports rights in the UK during the late 90’s.

They state that the market for sport’s rights grew “both fuelling and being fuelled by the worldwide growth of cable and satellite broadcasting”.

Focusing on the UK, the article describes the supply and demand of sports rights, analysing the complex bidding and acceptance strategies, and building on the economic theory of auctions, for this podcast I am not really interested in the process of the auction, more so interested in what they describe as happening with the sport watching public.

Focusing on the UK, the article describes the supply and demand of sports rights, analysing the complex bidding and acceptance strategies, and building on the economic theory of auctions, for my argument I am not really interested in the process of the auction, more so interested in what they describe as happening with the sport watching public.

“terrestrial broadcasters have traditionally not charged a subscription for reception. Most public broadcasters do charge some form of licence fee to all TV households, but this licence fee is typically subject to implicit regulation, and is set below the monopoly level, as demonstrated by the fact that almost all households, even those with low incomes, buy a licence”

Campbell Cowie, Mark Williams, The economics of sports rights, Telecommunications Policy, Volume 21, Issue 7, 1997, Pages 619-634, ISSN 0308-5961, https://doi.org/10.1016/S0308-5961

This shows us how the market had operated for public broadcasters in 1997. As well as how the public accessed television mainly through public broadcasters and the television licence in the UK. Despite the obvious incentive for Formula 1 to be a privatised sport. Which it eventually became after Sky Sport’s monopoly acquisition of Formula 1’s broadcasting rights in the UK.

The time difference between that statement and the Ofcom report is 20 years’ time so we can see how it has changed as time has gone by.

Ofcom’s own Findings.

The Ofcom report shows that in 2007 F1 should have been a free-to-air event for the season as their own assessments on how Formula 1 earned money at the time suggested that they earn enough money from external sources beyond the route of a paid Television Broadcaster as opposed to a Free-to-air channel.

It also gave me an idea about flow of money into F1 and how broadcasters are only really a small portion of how F1 earned money at the time, with the majority coming from sponsors of things such as the track and the outside sponsors such as JP Morgan and at the time of the report Delta Topco, who were replaced by Liberty Media in January 2017 for $4.4 billion or £3.3 billion at the time.

Sky F1’s Lucrative Deal.

Moving on from the Ofcom report we see that the new Sky contract allows them to air Formula 1 races exclusively in the UK until 2024, and in addition it will be the only channel broadcasting F1 from 2019 onwards, when free-to-air F1 on Television came to an end in the UK.

Sky paid £1 Billion to Formula One Management to obtain exclusive rights from 2019 onwards to broadcast Formula 1 as ‘pay tv’ in the United Kingdom. Sky Sports F1 was launched prior to the 2012 Formula 1 season, sharing broadcasting rights with the free-to-air public broadcaster the BBC until the end of the 2015 season, where Channel 4 took over after a cut in budget for BBC Sport meant it had to cut short its deal. This means that now because of sport’s rights in the UK and specific legislation.

But how does one get access to Sky F1 the ‘premiere’ programme that is the ritual site of F1 in the UK?

Sky F1 Subscription Service Points

The guardian summed it up in a news report:

• The Sky subscription of F1 is a package of channels that might cost you at least £43 a month to watch the Grand Prix weekends.
• In the deal, the SkyTv is a mandatory pickup, a collection of 100 channels that will cost you £24. From here on, if you wish to watch F1, you must include the SkySports package, which is a £22 deal, providing access to all SkySports content- Premier League, F1 and Cricket.
• But after adding this package, the website will enforce an automatic discount and reduce the sum to £43. Apart from this, there are options to upgrade the channels to HD and buy a Netflix or Disney+ subscription.

Some of my own research also found that during the transitional period between Liberty Media’s acquisition and Sky F1’s latest deals:

• F1 is only broadcast freely during the British Grand Prix, with highlights of all races and qualifying sessions until 2022, meaning the fate of the free British grand prix is ultimately up for discussion in the government and legislators’ eyes.
• Similarly with radio broadcasts of Formula 1 races all sessions are live on BBC sounds and BBC radio 5 live until 2021 when the government decides whether to renew these legislations.

Now for such a big deal, I would suggest that Event television should be accessible for all, and fortunately sports rights do help provide that for fans who are less fortunate, and for the longest time the UK government agreed, with the Silverstone grand prix being a protected cultural event, meaning that the BBC had right to broadcast it along side Sky, but as the current government wants everything to be privatised for no particular reason this a contested topic. Looking to the NRS social grades we see a rise in those who are out of work by 2% and looking at the Office for National Statistics report into Average Weekly Earnings in Great Britain: March 2021 and Employee Earnings their

• Statistics show that in April 2021, at which time approximately 8.8 million employees were furloughed under the Coronavirus Job Retention Scheme (CJRS); the estimates in this bulletin include furloughed employees and are based on actual payments made to the employee from company payrolls.

Coming back to how I suggested that I sometimes feel like a captive viewer when I watch Formula 1, I realise that there are many others who probably share the same position as myself, where it is not feasible to subscribe to Sky. Instead having to watch through a Twitter feed or the F1 app.

These second screen apps allow for reactions from people who are watching the race for themselves and discussing it through memes and reactions on twitter, as well as a more in-depth view on the timing’s sheets for the race on the F1 app, essentially using second screening as the main screen, allowing me to follow along in some capacity due to being unable to watch the race on television.

“As the contours of the post-network era develop, sport programming presents a unique paradox. It remains the most visible, ritual site of “broadcast” address, gathering the largest, multi-demographic audiences for shared, “water-cooler” television experiences”.

Lotz, A. (Ed.). (2009). Beyond Prime Time: Television Programming in the Post-Network Era (1st ed.). Routledge. https://doi.org/10.4324/9780203884508

Platform Monopolization, and the disregard for less well off consumers.

This platform monopolization of Formula 1 and this deal with Sky offers, no other alternative place to stream the event, this lack of proper competition in the market which would offering competitive consumer friendly prices has been axed completely linking to neo-liberalism, as the idea of more choice has ultimately led to a monopolization on the sport as a commodity, with Liberty Media getting a large wad of cash each year for simply doing what they’ve always done despite promises of change withholding better for the consumer since the early 2010’s despite increasing the price and moving the audience around between platforms.

I see this as the case when it comes to watching F1 on television. There are no alternatives meaning that Sky holds authoritarian power over fans who watch the sport, forcing them to pay up to watch the sport they love, or leaving them in the dust.

And while it is not Sky’s fault that some members of the community cannot afford to watch the sport that they love it comes into question if Sky’s firm grasp on the broadcasting rights to Formula 1 is an abuse of power over the general paying public.

We only need to look at the recent European Super League that a few teams from the Premiere League attempted to join early 2021. Yet another attempt to split audiences between more platforms to create more money where there is a limited amount of content, and consumers. However and fortunately for Football fans the boat was pushed too far this instance with negative outcries from the Football crowd, causing all teams involved to back out of the league.

Neo-liberalism and its distinct promise of the freedom to choose has been completely missed for the fans of Formula 1, and instead that freedom has been granted to the higher ups within Formula 1 itself.

Conclusion.

I would say that F1 has “cut off it’s nose to spite it’s face” with some of the deals they have chosen. My thoughts are that F1 with no free races is cut off completely from those who are not already going to watch the sport as a paying customer. So there is almost no longevity as there are no new fans who are willing to tip their toes into watching for the hefty price of a Sky F1 subscription, containing all of the other Sky F1 content.

This allowance from F1 to pick and choose deals which greatly benefit themselves monetarily, at the cost of alienating those who may be unable to afford access to a pricey second platform beyond the original television license in the UK. We have the hindsight that by looking at the transitional periods that have presented themselves with these reports by Ofcom and Cowie and Williams we can see the slow march towards a position where it may become impossible to regulate and legislate competition between different broadcasters.