• by Karlene Lukovitz  @KLmarketdaily, June 6, 2022

Disney’s ESPN is reportedly up against Netflix, as well as NBCUniversal and Amazon, in a battle for the rights to broadcast Formula 1 races in the U.S. starting next year.

ESPN is reportedly paying just $5 million per year currently to broadcast the sport, according to Business Insider.

In the past, other countries made up most of F1's global fan base, which Nielsen has projected will reach 1 billion by the end of this year -- with 77% under 35 years old. 

But its popularity has skyrocketed in the U.S. in recent times, making the U.S. the sport's No. 1 market.

ESPN's coverage has nearly doubled, to 1.5 million viewers per race. And U.S. races have expanded from just one, in Austin, Texas, to a second launched in Miami this year and a third planned for Las Vegas as of next year.

F1 owner Liberty Media, which acquired F1 in 2016 for $4.4 billion, is now seeking $100 million for the media rights, versus ESPN’s latest known bid of about $70 million, per the BI report.

But Formula 1 has been virtually commercial-free in U.S. airings, and the current intention appears to be to continue that, based on the goodwill and engagement that has helped build viewership.

So why the competition for rights?

Netflix's extremely popular docu-series “Drive to Survive," launched in partnership with Liberty Media in 2019, is widely acknowledged to have driven the boom in the U.S. fan base — although the show has come under fire from some in the racing industry for overdramatizing the sport. The series' success would seem to make F1 a logical entry point for Netflix’s expansion into live sports.

NBCU had the F1 rights prior to ESPN, and could use F1 coverage to cross-promote its IndyCar series. In addition, while ESPN currently pays to use Sky Sports’ U.K. feed for F1, NBCU parent Comcast owns Sky Sports, and could just air directly from the network.

However, NBCU is also known for heavy ad loads during sports events, which would seem to raise questions about continuing the current virtually ad-free F1 coverage format.

Amazon Prime Video has also been expanding into live sports, including acquiring the rights to NFL’s Thursday night games, some New York Yankees games on YES, and some WNBA games.

It also preceded Netflix in offering F1 docuseries “Fernando” and “Grand Prix Driver.”