Early last year, the telecom mogul John Malone tapped Derek Chang to be the new CEO of Liberty Media, the holding company that owns Formula 1.
It came at a critical moment for the racing circuit. The Apple movie F1 was set to race into theaters, and its TV deal in the U.S. with ESPN was set to come to an end. So Chang and F1 CEO Stefano Domenicali had a choice to make: Do they pursue the deal they think will be the most lucrative, do they choose a partner that they think can deliver more audiences and growth? And is there anyone that can do both?
Ultimately, of course, Apple won those rights, turning F1 into a linchpin of its live sports strategy. Eddy Cue, the Apple VP who oversees the tech giant’s services business (including Apple TV) said Thursday that viewership is “up by significant double-digit percentage growth on the race day, and more importantly on Saturdays,” adding that the audience is younger and more female-skewing than it was previously at ESPN.
But Cue, sitting with Domenicali in the Paley Center for Media’s Henry Kissinger conference room, explained how he made the case for Apple, acknowledging that he had to persuade the executives to take a chance on what Apple could do.
“I sat down with [Comenicali and Chang] and I said, ‘no one’s going to tell you this,’… You can meet with ESPN, Netflix, Amazon. Everybody from that same place. No one’s going to tell you this, I’m the only one who’s going to tell you this,” Cue recalled. “I said, there’s only two people you should do this deal with. You should either do the deal with Netflix or you should do it with us. And let me describe why. I said, with Netflix, you already have Drive to Survive. They’re the largest streamer from that standpoint, they’ll do a great job with you. I said you should do it with us because we’re the only ones that are going to make it the number one top priority.
“If you want to grow the sport, your best chance to grow is with us,” Cue continued. “Now, if somebody else is going to pay you 10x what it’s worth, go sign up with them, but that’s the reality of it. We’re the only ones that are going to go all in.”
Cue and Domenicali were speaking at what was the latest event in Paley’s Media Council series. Next month, Paley will host its International Council Summit at its New York location, with a lineup that includes John Malone, Hiroki Totoki, and Eli Manning, among others.
Apple has indeed leaned into F1, creating playlists in Apple Music, maps around races, and even taking steps to bring the races to other platforms that, frankly more accessible than Apple TV, which is widely perceived as having a smaller user base than other streaming platforms.
That has included altcasts on Fox’s free streaming platform Tubi, and of course a deal with Netflix to simulcast a race in exchange for episodes of Drive to Survive.
“Obviously Formula 1 grew tremendously before we got involved in this, but it grew from zero. It’s still relatively small when you look at it from a viewpoint of sports in America,” Cue said. “And so my view on this was: How do we grow the sport? And I don’t care what it is. We’re going to try all kinds of different things. We’ve done things with Tubi, people thought it was crazy but we put a race on Netflix, and you’re like, well, wait a second. You guys pay for the exclusive rights. Why the hell would you put a race on Netflix? Because we’re trying to grow the sport. If we grow the sport, we’re going to win.”
Indeed, Domenicali, speaking with The Hollywood Reporter last year said that balancing reach and monetization is key.
Sport in America, in in U.S., you have to be culturally relevant,” Comenicali said Thursday. “If you’re culturally relevant, you wake up in the morning, you watch the screen you want to watch on, and you connect with your sport.
“My dream is one day, hopefully not too far away, you’re gonna wake up with the interest of understanding what is happening in F1, and if this will happen, that means that we’ve done our job,” he continued. “Of course, you’re gonna have also an American driver, not only with the American passport, but also with great quality, will help that because, as always, aspirational models are giving a big push. For that, we cannot be fake, it has to be real.”
So far both parties are happy with the results. Cue told THR after the Australian Grand Prix exceeded “both F1 and Apple expectations” and that the numbers were up, despite the challenging time zones.
“I remember there was lots of people that said there’s no way that they’re going to be able to get to the ESPN numbers because ESPN’s on cable, everyone has ESPN tuned in from that standpoint,” Cue said Thursday. “Stefano did not, it takes guts to to do that because you have to believe in the change.”
