When Channel 4 announced that it would be taking over the BBC's role as the U.K.'s free-to-air F1 broadcaster, "much of the focus was on its promise to deliver grands prix free from commercial breaks," according to Kate Walker of MOTORSPORT. But given the cost of F1 broadcasting rights -- even the highlights-only rights deal was worth a reported £12M ($17.8M) a year, excluding production costs -- "how can the channel balance the books?" According to C4, the books are already balanced, its launch press release said, "The new agreement to broadcast Formula 1 World Championship strengthens the Channel 4 schedule and will not affect the level of spend on peak time, UK-originated content." With "no budget cuts to worry about, C4 can afford to do more than simply copy and paste the BBC template." What Channel 4 has "yet to do is make it clear just what ad-free coverage means to them as a channel: is it races free from advertising of any sort (other than the trackside signage), or is it simply coverage run without a commercial break from the action?" Where F1 is concerned, Channel 4 has "three key avenues for income: sponsorship of the coverage as a whole; picture-in-picture commercial breaks; and letterbox advertising framing on-track action throughout the bulk of the race, although the last two options rather stretch the notion of ad-free." Despite the cost of the broadcasting rights already being accounted for by C4, "for other players there are risks involved in F1's free-to-air move away from the BBC." While Formula 1 "brings with it a loyal fanbase, there are already concerns that the switch to C4 could affect the wider sponsorship market." Advertising company WPP CEO Martin Sorrell said, "I would say the move is neutral to positive. There will be more opportunities for TV advertising, if not in the races, then around them. But if you are talking about sponsors, then it is neutral to negative because less audience means less coverage" (MOTORSPORT, 12/29).
