Liberty Media thinks digital to attract younger Formula One fans

It is almost 18 months since Liberty Media completed its acquisition of Formula One and Chase Carey was installed as the sport’s new boss. The moves brought an end to Bernie Ecclestone’s long tenure in charge of F1 and ushered in a new era for its teams, star drivers and fans.

Carey has spent his career at the pinnacle of the media industry and for many years was Rupert Murdoch’s top lieutenant to the extent that the mogul once referred to him as his most “trusted adviser”. The former executive vice-chairman of Mr Murdoch’s 21st Century Fox now has F1 to run and says it is well placed to grow, both in commercial terms and in the size of the audience it can attract.

Liberty Media’s chance to buy, own and control a global sport was too good to pass up, he explains. This is, in part, because the media landscape is fragmenting: viewers with a plethora of online platforms to watch are increasingly less likely to sit down to watch so-called linear television — that is, scheduled programmes when they air. They will, however, with live sport.

“In a world where digital technology is changing everything, [live] event content is gaining value as other forms of content become commoditised,” Carey notes. F1 “is well positioned to increase in value”.

He has already introduced significant changes to the sport’s business operations. F1 did not have a marketing group when Liberty acquired it but does now and new sponsors have come on board. There is also a much bigger emphasis on digital technology and how that can bring in new fans — particularly younger ones.

CVC, the private equity firm that sold Formula One to Liberty, “had a short term view” in terms of the sport’s commercial prospects and F1’s previous management had a similar outlook, he says. “Formula One was underserved by a continued focus on the deal of the day.” Planning for the future and expanding its reach and appeal is now the biggest priority, as is the creation of a “shared vision” that its various stakeholders — the teams, drivers, fans and commercial partners — can buy into.

“We’ve tried to put in place an organisation that can grow the sport,” he says. “We have a marketing group now, a digital organisation, a hospitality group . . . we’ve tried to build a meaningful long term vision.”

A continued focus on the deal of the day did not serve Formula One well

Carey speaks the language of the modern media executive and his approach is a far cry from Ecclestone’s freewheeling style. In stressing a shared vision for F1’s multiple stakeholders, Carey represents a departure from the days when the sport was characterised as, as he puts it, “every man for himself”.

He is not to be underestimated. Few of his peers in media command as much respect as Carey for, not least at 21st Century Fox, his dealmaking experience and battle hardened skills at the negotiating table — which may explain why Liberty was so keen to get him on board. Run by chief executive Greg Maffei and controlled by the pugnacious Denver-based billionaire John Malone, known as the “Cable Cowboy” for the outsized role he played in consolidating the US media sector, Liberty has a reputation for canny deals. Maffei is known for turning a $12,500 investment that Liberty had in Sirius, the satellite radio group, into a holding worth more than $16bn.

At Formula One, Carey says he likes what he has seen since taking over as chief executive. “We feel encouraged by the support. One of the realities of a sport like this is it’s a big ecosystem. There are the teams, the sponsors, the broadcasters, the FIA . . . each respects the view of the sport as a whole but each comes at it from a unique angle.”

One of his biggest priorities is reaching new audiences and he rattles off a list of initiatives, including an “e-sports” league contested by F1 teams and a Netflix series that is documenting the life of the teams as the Grand Prix circuit moves around the world. “They are going to film a lot of what goes on around the sport.” There are other new promotional efforts, such as ancillary events that have been put on in cities staging grands prix. “We had an event in Trafalgar Square last year and a fan festival in the centre of Shanghai . . . it creates the excitement and energy. Whether it’s online or events, it creates an ability to attract fans to the sport.”

Analysts agree that F1 has the potential to attract new fans. “There’s an opportunity to build the sport in new markets,” says Ben Swinburne, a media analyst at Morgan Stanley. F1 can also use streaming technology to “maximise the media rights of the business”, he adds. The growth of on-demand streaming has reshaped the media landscape and owners of exclusive sports rights — such as F1 — have an opportunity to sell their coverage directly to consumers, rather than via a cable or broadcasting middleman. “It’s probably the single biggest change in the marketplace, in that you have global consumer adoption of [streaming] video services,” says Swinburne. “It’s a change in the landscape that wasn’t there before.”

These and other opportunities are being explored by Carey, who has set a target date of 2020 for the full implementation of the plans he has in mind for F1, including a new grand prix in Miami. “Our focus isn’t on what we can do in the next three months,” he says. “This is an organisational start-up and a business turnround [story]. But it’s a great franchise with great potential.”