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TV Insiders Wonder If Channel 4's Ad-Free F1 Races Can Be Commercially Viable

Some broadcasting insiders are "asking if Channel 4 is airing Formula One on a not-for-profit basis as part of a wider, strategic move because it might aid its efforts to ward off privatisation, by providing a service that a for-profit operator probably could not afford," according to Gideon Spanier of CAMPAIGN LIVE. ITV would "certainly appear to think a Formula One deal without ads is uneconomic, after losing out to Channel 4 in the bidding." Channel 4 CEO David Abraham is thought to have paid upwards of £20M ($29.6M) a year "for about ten live races a season, plus highlights, in a three-year deal, after the BBC pulled out because of austerity cuts." State-owned Channel 4 dismisses suggestions that the figure is closer to £35M ($52M) a season and said that it is building on its "track record for innovation in sports broadcasting" by dropping the ads that spoil the Formula One viewing experience. Channel 4 has not decided if it will use "picture in picture" ads that it airs during horse-racing. There is sponsorship, but when ITV last had the Formula One rights, "it is believed to have got only a figure in the low seven figures for the TV sponsorship, and Formula One itself has many big sponsors already." Former Channel 5 CEO David Elstein thinks that Channel 4 "can make it work, and that the sponsorship rights alone are valuable." Elstein said, "Probably almost half the rights cost could be retrieved from sponsorship, and the balance from enhanced commercial impacts in the key demographics of young males." He points out the "non-live coverage on race days can be stuffed with ads" and there might even be an opportunity to "average out" the advertising minutage "across the whole event," so long as the regulator Ofcom gave the green light (CAMPAIGN LIVE, 12/22).

'INSENSITIVE': In London, Byron Young wrote former team Owner Eddie Jordan "blasted BBC bosses for ditching F1." The Grand Prix team boss, turned corporation pundit, said that the timing was "insensitive and gut-wrenching" for the 60-man team. Jordan: "Obviously it was a huge shock even though it had been talked about. It is utterly devastating. The week of Christmas is not the time to hear this, compounded by the fact that it’s not long since a lot of the team had left London and relocated in Salford at the whim of the BBC. People have moved families to new houses and children to new schools and were just about getting settled in Salford and then they get this bomb-shell." Several sources told the Mirror that "two months ago staff were assured F1 would continue" in '16. The BBC is understood to have paid compensation to F1 CEO Bernie Ecclestone "to get out of their contract three years early." And that sum, running to many millions, "could have financed a dignified exit season for the corporation and saved staff the seasonal agony" (DAILY MIRROR, 12/21).

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