It’s great when you have two suitors and their fear of losing you means that you can end up having a relationship with both of them. That’s what happened in the recent Formula 1 UK television rights negotiation.
F1 has considerable bargaining power in these negotiations because it alone can provide access to televised F1 races. This kind of exclusive access to a network, or “network power” is extremely powerful in negotiations. It will have induced both Sky and BBC to bid aggressively for the rights, with each needing access to that network to enhance their own profile (in negotiating terms, each of them having a “belonging need”).
The masterstroke by F1 has been to be able to satisfy that belonging need of both BBC and Sky at the same time by parceling up the rights in each way. Sky gets the full package of rights to F1; BBC gets a reduced package – enough to make it feel it still has adequate access to the brand, but not enough to prevent Sky paying top dollar for its own package.
Further, the reduced rights granted by F1 to BBC enables them to meet another negotiating need at the same time – that is to save money (a “reassurance” negotiation need). Small wonder that the BBC statement welcoming the deal refers not only to the triumphal fact that in large measure F1 will still be available to licence fee payers, but also to the fact that as a result of the deal the BBC has achieved “significant savings”.
F1 of course benefits all round, and the deal certainly meets Bernie Ecclestone’s almost insatiable “achievement” needs. F1 gets much higher audience reach through dealing with two UK channels, and no doubt greater licence fees. F1 also has a ready-made market place the next time the rights come up for renewal. Moreover, the fact that BBC still has some access to the F1 rights enables F1 to avoid falling foul of any regulator concerns which might have arisen if F1 had moved exclusively to a subscription service in the UK .
Great stuff and an example of the benefits that can ensue when everybody’s negotiating needs are met.
A very unusal article you have written, do you work for Sky?
The fact you miss is the to get Sky Sports with HD, you have to pay £50 per month, £600 per year and minimum subscriptions lengths are 12 months.
Now in the times of financial restrictions, I cannot see many of the 6 million BBC viewers getting this package. I can see most of the 6 million not bothering with the BBC poor highlights (they are allowed to show the full race defered by a few hours, but the lauught gnome does not like this idea so the BBC went for the highlights pakage).
Currently Sky only have about 2 million Sky Sport subscribers and most of them are for football, which happens to be played on a SUNDAY (When most GP’s are on).
I can now see the demise of F1 in the UK, it is going to same as the A1GP which SKY had, do you remember that, you would be forgiven if you didn’t as it was a complete farce.
thats “laughing gnome” not “lauught gnome”
No I don’t work for Sky. It is in 36% of UK households and thousands of clubs and bars.
With its acquisitive attitude to sports rights it is becoming a defacto standard for watching live sports. So, I think Sky will continue to pick up subscribers with deals like this (which of course is the assumption they are making).
Clive