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Posts tagged with "Sky"

UniFacepalm

First of all, sorry for the long absence. I've had a lengthy spell where everything I've wanted to write has been either live-commenting or small enough to fit in a tweet or two. Neither fits my blogging style. I'll try not to let 10-week absences happen again.

 

Fury ignited this entry. It's the ongoing situation in Bahrain. Up until now, it's been a matter of ethics and safety whether F1 goes or not. Thanks to the Bahrain organiser's actions, it's become a matter of regulations.

 

I speak of the "UniF1ed" campaign - something which apparently has been happening for a while but only came to my attention last night.  The organisers of the race may or may not have originated the campaign, but they are enthusiastically participating in it. Little do they appear to realise that they have endangered their race by doing so.

 

I draw your attention to the tagline "One Nation in Celebration". The pedants among you will deem this false - F1 is a worldwide event so, barring disaster, "Many Nations In Celebration" would be more accurate. The font used for it on the poster is difficult to read, but that's even more nit-picky. The big problem, however, is that it expresses a link between F1 and national unity. 

 

Linking F1 and national unity probably doesn't seem that big a problem. It may even seem close enough to pro-social and "sport is good" themes to be helpful. I can only assume that was what the organisers thought when they decided to go down that path. Unfortunately for them, Article 1 of the FIA Statutes (PDF), in wording combined with its application and the reason for its existence, indicates otherwise.

 

Article 1 of the FIA Statutes says, among other things:

 

"The FIA shall refrain from manifesting racial, political or religious discrimination in the course of its activities and from taking any action in this respect."

 

Many thanks to the Midweek Motorsports Listener Collective on Facebook, particularly with regard to finding an ad in the campaign that further demonstrates the link the organisers are making between F1 and politics.

 

You may be wondering why I am using "linking F1 and politics" as synonymous with the "racial, political and religious discrimination" actually mentioned in Article 1 of the FIA Statutes. This is down to two things: the way Article 1 has been implemented and the reason Article 1 is required to exist.

 

The most recent use of Article 1  was to convict the Turkish GP organisers (TOSFED) of using the 2006 podium ceremony for political gain. Mehmet Ali Talat presented one of the trophies. This in and of itself wasn't a breach of Article 1. Had he been described as the regional governor of Turkish Cyprus, everything would have been fine (except for possible grumblings within Cyprus and Turkey). However, he was described as the head of state of the Republic of Cyprus, a state not recognised by the UN but is recognised by Turkey. That was deemed a breach of Article 1 of the FIA Statutes and of Article 151c of the International Sporting Code. This was for a one-off incident that was relatively subtle in its political aims and, importantly, did not connote political discrimination, only express a controversial political point. 

 

Yes, part of the fine was for Article 151c, but a more significant breach of Article 1 would be sufficient for any penalty the FIA has to be levied. The "UniF1ed" campaign is clearly not a casual breach, nor is it a question of tick-boxing. Article 35 b) specifically mentions that any club not acting according to the expectations of the FIA (including by breaking any of the Statutes) can be struck off the roll. That is to say, the entire club and all associated activities can be dissolved. Obviously, this would include the very Grand Prix Bahrain was attempting to protect.

 

There is nothing in the Statute that requires a political statement to be true or demonstrable in order for it to be usable. Technically speaking, even explicit FIA approval wouldn't work, unless the message was specifically against racial, political or religious discrimination. "UniF1ed" isn't. Instead it is a message suggesting political unity already exists, which doesn't meet the exemption requirement. 

 

As for why Article 1 of the FIA Statutes exists, it's mandatory for non-political organisations registered in France. This is because anti-discrimination and apolitical approaches are considered key elements in the sorts of groups France allows to be registered with them. If the FIA overlooks a breach of Article 1, it is under serious risk of being sent to the French civil courts and penalised. Dissolution is entirely possible, as is a large fine and (at least partial) loss of its autonomy over judging its own motorsports events.

 

That would open the door to everything from pitlane speeders to technical flouters to use the civil courts to challenge every single decision the FIA makes. Motorsport would grind to a halt. That assumes a lack of dissolution - that scenario would obviously have a serious deletrious effect on every branch of motorsport, including ones that never in a million years considered going to Bahrain.

 

Clearly none of this is in any motorsport fan's interest. It certainly doesn't help Bahrain organisers any! 

 

There is no longer any need to reference political strife or anyone's safety to justify not going to Bahrain. Regulations now demand refusal to race - and refusal to support the race. Many have suggested this be done in the form of a boycott.

 

Thanks to the combined efforts of Sky (inaccessible, unaffordable and unethical) and BBC Radio (unintelligible in the races), I won't have a choice about watching the race. The most I'd have been able to do was follow it on Twitter. Having already had the difficult bit taken out of my hands, I am quite happy to boycott the 2012 Bahrain Grand Prix completely. The powers-that-be have already demonstrated they don't care about viewer figures due to sending the UK live rights to Sky, so I doubt the boycott will achieve anything. 

For that matter, I'm not convinced the situation is safe enough to enable a viable attempt to hold the 2012 Bahrain GP. If inviability makes for a race cancellation on force majuere (which incidentally has to be done by the FIA if there is to be a Bahrain 2013), that would be helpful in the short term.

 

The breach of Statute would make the validity of copyright use of "F1" within "UniF1ed" questionable too. The licence the organisers have to include F1 in their marketing would surely not include uses in materials breaching the regulations, particularly ones underpinned by law. Some of the cases Bernie has lost on the topic mean there is not sufficient evidence for certainty in either direction. Even so, that wouldn't be Bahrain's biggest likely problem.

 

Its biggest problem in that scenario is that Bahrain would likely lose the race... ...on account of there being no viable authority to contract the race from in the first place. 


For these reasons, it is wrong to support a race that's being used to support political strife in contravention of Article 1 of the FIA Statutes. As in, it's such a big contravention that, at minimum, the FIA will lose its ability to be the first and final place of judgment for matters involving its own series (everything would have to be made subject to the French civil courts). The French courts are rather sensitive about the whole "no politics" thing for non-political organisations. The moment Bahrain's organisers issued the "UniF1ed" ad campaign, it was in contravention of the regulations. That the FIA has (so far) let that campaign go ahead without comment is contemptible and puts the FIA - and every single series it runs, including those who'd never have gone to Bahrain in a million years - in a very vulnerable position.

It's in F1's and the FIA's interest not to wait for force majuere to come into effect, but to protect themselves by cancelling on the grounds of FIA Statute Article 1 breaches.


Until then... ...I don't see why I should have to applaud or condone the FIA's attempted self-destruction.

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Calculating Sky

Following a rather odd conversation on The Formula 1 Blog with Anonymous, it is becoming increasingly clear that a breakdown of what it would take for Sky to break even is necessary. This is, after all, the main reason why the attempt to transfer the UK rights from free-to-air to pay-TV is likely to have medium-term consequences on non-UK F1 fans. It's a bit rough-and-ready because of the timing, but I will happily tidy up anything that you think needs tidying later.

 

Wimbledon never fails to get full crowds even though few people in Britain follow tennis otherwise. Silverstone never failed to get full crowds even in years where British F1 figures fell like a stone due to Schumacher dominating. You'd be surprised at how low an audience conversion is needed to fill a stadium, so saying that test cricket grounds are still full doesn't say anything about what's going on with the TV side of things. Attending a cricket match is a special occasion. It does not mean that watching cricket is still bread-and-butter to people. The BARB statistics do not lie and they say that Sky struggles to get a seventh of the audience Radio 4 Longwave does for cricket matches, and that both combined are far lower than cricket got before Sky took over. The numbers end up working for the sport largely because Sky can afford more, but that is reliant on capping the level sports can charge it. That works financially for sports that seriously undervalued themselves (primarily by only considering the BBC pre-Sky, which of course can't run adverts to offset its expenses) but F1 hasn't done that since 1981...

I suppose if one calls 234,000 rugby viewers (2008 League World Cup) with Sky compared to over 2.6 million for the previous version* pre-Sky a success, then rugby might be considered a success. From Sky's perspective, it's a relatively successful sport because the low sanctioning fees means it can make quite a bit from the deal; from the perspective of a rational outsider surveying the effects on the sport's support base, it is a disaster.

The more one looks at the effects of Sky getting involved in sport, the worse it looks for sport. If a sport wants to go from being a majority sport to a minor one, going the pay route's a pretty effective way of doing it. That's been demonstrated time and again.


Advertising is of course part of Sky's arsenal when paying for things. However, Bernie fees are not the only costs it faces, and F1 isn't football. It costs £10 m per year to produce F1 the BBC 2011 way and to do all the extra features Sky has said it'll do, it will need to spend even more than that. ITV couldn't get that much from sponsorship when it had F1 in boom time, so given that Sky isn't having in-race advertising and is operating in a recession, it'll struggle to even meet its production costs through advertising, let alone start tackling marketing, satellite rearrangement fees (yes, making a new channel costs money) and the Bernie fee (which is now four times higher for Sky than the BBC's production fee was). 

Even so, my original calculation of a million new customers being needed assumed, optimistically, that the non-Bernie fees would be entirely covered by advertising. (Before the amount Sky paid was announced, I tended to say "between 0.5 and 0.88 million" when commenting on the internet; I was bargaining on Sky doing some sort of cost calculation prior to purchase). The £40 m from subscriptions prior to F1's arrival has to be ignored on the grounds that they'll have bought other contracts with them. These naturally must be maintained, with the possible exception of programs that directly clash with F1 programming. Other sports may not be as expensive as F1 but they do have acquisition and production fees. Instead, the calculation has to be done from base.

There are two ways of getting Sky F1 - one using the HD pack and the other using Sky Sports. The Entertainment pack cost (common to both routes) has to be ignored because the channels on the pack are funded by it, along with all their programming. Much like the BBC, each Sky channel is funded separately. Terra Nova, for example, is not a free show. Even through the HD route, the HD money is not free because all the programming on Sky has to be converted to HD. If Entertainment and Sports are priced in relation to their values to Sky, then only half the HD top-up can be assumed to be available for F1.

Let's assume that the only sport that the people are interested in is F1 and that HD buyers don't buy any other packages (if we don't, again, the figures look even worse for Sky, as that person's subscription fee would then need to be shared among however many additional contracts corresponded to that individual's customised viewing habits). The cost of Sky Sports 1 and 2 on top of that package is £20 and this is the maximum amount Sky can take in per customer per month with regard to F1. HD, once the half for Entertainment package upgrading is removed, only contributes £6.125 per customer. Only new-to-Sky customers can be assumed to be taking the package for the full 12 months, so only the 7 months where Sky has an exclusive race can be safely counted for Sky's revenue (let's assume for now that Bahrain goes ahead).

I am also going to assume that everyone who watches F1 is a singleton who never has the TV on when entertaining and doesn't have lodgers or other unrelated co-residents similar sneakily "borrowing" a chair during races. Otherwise, each viewer is only contributing part of the subscription payment. I'm also assuming none of these people are bar, pub or club owners because then every patron of the bar/pub/club is contributing towards the subscription.

Remember that the Bernie escalator ensures that prices go up at least 10% every year (that fee quoted for Sky's acquisition will be the first-year price; Bernie rules ensure it goes up and up after that). The £40 m initial annual price becomes £77.95 m by the end of the contract Sky has. If that sounds high, the fee the BBC paid went from £25 m to £40 m a year from one end of its contract to the other (projected but never reached due to renegotiation) end; if it hadn't it probably wouldn't have needed to let F1 go. That's compounding for you.

At the moment, 30% of Sky customers are on HD (therefore using the cheap route) and 70% on SD (therefore would need the expensive route). Being optimistic and assuming this proportion does not move any further towards HD despite more HD subscribers being in Sky's overall business plan, Sky needs 0.95 million new subscribers (rounds up to 1 million to the nearest 100,000 subscribers) that didn't care for any Sky-carried sport bar F1. To break even. Compounding means it doesn't have to get them all immediately - a 2012 figure of 0.53 million is enough for that specific year - but Sky's sales definitely aren't going up by the 10% per year needed simply to keep up with Bernie (they only increased by 3% per year for the last 2 years - it's pretty consistent at the moment). 

Even 0.53 million is over twice as many viewers than Sky gets for any part of its non-football programming. It is unlikely Sky will get the figures it needs because past and present data demonstrates it. This is before considering that every assumption I've just detailed here - advertising revenue, house occupancy, HD, caring about other Sky sports, Bahrain, the extent of Bernie escalator - is more likely to go against Sky than in its favour with regard to making F1 pay, and therefore require even more people to sign.

(For the curious, on the assumptions made in this item, it would take 2.08 m cumulative new customers for Sky to be able to justify taking all 20 races in the first year of the next broadcasting contract of 2018, assuming the minimum number of new customers were signed up as needed to let it break even in each previous year, that no additional fee was made for exclusivity and assuming Sky merely wished to break even with F1 due to its high profile).

Japan F1 is mostly free Fuji TV. There is a pay option (Next) but it gets 1/6 of the audience the free version does (helped by the fact the same provider on the same platform shows the free and pay options - not the case in the UK). Brazil is primarily covered by GloboTV, which is free-to-air and easily beats the pay option for popularity. Italy and Germany used to have pay TV options (through Sky) but they've folded due to lack of interest. Some other countries with smaller audiences have pay-only, and their audiences went through the floor. This has left some channels dropping F1 altogether and others putting it on progressively higher-cost options. That's what always happens with pay TV concerning sports that were previously shown just fine on free-to-air**. The audiences shrink and so the pay TV provider has to rely on cheap rates to keep the option alive. Here's a hint: Bernie will never, ever, provide cheap rates.

So why are the likes of rugby and cricket succeeding despite their TV mistakes? Because other avenues of revenue exploded in the last decade or two. Sponsorship, once quite rare for a series, has become huge money, especially for drinks companies who would struggle to advertise in certain international markets through the standard methods. Ticket prices skyrocketed, turning the weekly patronage of a favourite sport to an occasional treat for the poor without turning away the rich (in fact, with more focus on rich clients as seen in the past decade, the rich are pouring in as they spy networking and hob-nobbing opportunities). The sponsorship alone accounts for why there's more money in disability swimming than ever despite it having no media profile worthy of the name and free tickets to nearly all events. The latter is why the Paddock Club in F1 is worth over 10% of the total income of F1 despite serving a maximum of 5000 people per race.

After all is calculated, Sky's chances of making F1 break even are remote. The chances of Sky keeping a sport that doesn't break even is even remoter. The chances of Bernie finding anyone willing to pay more than Sky pay him now in those circumstances is nil. That means Britain's fees will drop. It's not clear who'd pick up the rights then - it depends who has most to spare at that moment out of the not-recently-"burned" parties. What is clear is that it would cause a domino effect. Other countries would see that pay TV does not work and be able to call Bernie's bluff by not engaging in bidding wars with such channels. It would mean the prices paid by channels would fall through the floor. So would F1's revenues.

 

F1 would have to either seriously tighten its belt (and hope it's no longer up to the neck in debt) or die.

 

Quite how not want F1 to kill itself counts as "not loving F1", as Anonymous alleged, remains a mystery.  

* - In case you're wondering, rugby union suffered even worse. The Heineken Cup final, for example went from 9 million in 2005 to below 185,000 in 2007. The only reason it's still on Sky is because the Heineken Cup charges much, much less for its tournament broadcast rights than Bernie does and the BBC is currently trying to sell sports rights rather than buy them.



** - Football, in case you're wondering, was not shown fine free-to-air before Sky got the rights; the BBC could typically only show one match a day - and hardly ever in primetime - due to broadcasting balance requirements, whereas Sky was able to show multiple ones, at any time of day, almost immediately. Being able to see twice as many matches means twice as many people are going to be interested, so it matters less if no single match gets much in the way of viewing figures compared to free-to-air - the sheer number of matches viewable through the multi-channel, more specialised pay TV system meant that many small parts became a bigger sum than the BBC could achieve. Also, people can't advertise on the BBC, so when Britain's favourite sport went to the advertisable platform, advertisers naturally paid top dollar to be associated with the sport. Football is, economically speaking, pay TV's one big sporting success.

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Obscure International Sportscar Racing

 

Warning! Long entry alert!

 

I spent quite a lot of the weekend attempting to find out information about Giancarlo Fisichella's latest adventure. Considering that it was an international sportscar race (link in Italian), this proved surprisingly difficult.

 

The race was the 6 Ore di Vallelunga (link in Italian), an endurance race slightly longer than a typical Le Mans Series race (because there is no maximum distance) for GT2 and lower. GT2 is the level Giancarlo races at in sportscars and the race is an independent one, so initially my reaction to him being on the entry list was excitement. Especially since, at fewer than 80 miles from Fisico's home district, it would definitely be his home race.

 

Then I spotted a slight problem. Coverage.

 

Sportscar racing is challenging to follow at the best of times. Pit stop counts that sometimes enter double figures, safety cars that pick up whoever happens to be convenient, high entry counts leading to multiple simultaneous incidents... At least the multiple classes would be a minimal complication this time. Usually Giancarlo races in ACO-sanctioned events these days, where GT2 is the slowest class, but in Vallelunga GT2 is the fastest permitted class. So winning the class would surely require a race win.*

 

Usually the way round all this confusion is to load up a live timing screen. By necessity more complex than any single-seater enthusiasts use for F1, the versions supplied by LMS, ALMS and the 24H Le Mans official websites all offer reasonable means to follow what's happening (when they load and update correctly). The Vallelunga organisers... ...didn't.

 

There was some news available on the official site, but as far as I could tell (with admittedly limited Italian language skills) there was no live timing. Or broadcasting. Which brought me to the second problem.

 

To a certain extent, it's possible to follow a sportscar race even without live timing if you have a decent commentary team. Having established there was no official version, my next port of call was Radio Le Mans. Having a commentary team I'd grown to enjoy in the past season (covering four different rulesets and three different continents) explain the complexities of this race (under a fifth ruleset) in my native language would be helpful. Alas, they appear to have gone on a well-deserved off-season break from commentating.

 

Bereft of alternative ideas, I asked my friends for help.  At the Fisichella Forum suggested half-a-dozen possible sites that could be used. One of them worked, and I looked forward to attempting to understand the race using the likely-sounding Italia-Racing.it (and secretly hoping everyone stopped for ice creams mid-race, since I'd just covered that topic in class!).

 

On Sunday morning, I duly tuned in... ...and heard "although no-one understood, we-were-holding-back-the-flood..." While I usually like that particular Take That song, I didn't think it was a good sign that I was hearing it 3 minutes before the start. Ah well, maybe it's one of those stations that thinks starting and ending 30 seconds the show either side of the flags is slick and efficient use of time.

 

The Shakira song that followed made me worried.

 

The Elvis song that started as the race was due to start made me very worried. "Suspicious Mind(s)", even...

 

By the end of the next song, I was ready to panic. I'd been checking my social networking services while listening to the radio and seen a photo proving the race had started during the song. It was some Italian pop track, but I was past caring who'd sung it as it was now at least 5 minutes into the race. The way the presenter was talking made it clear I shouldn't expect the station to be covering any racing today. Even if a station called Italia-Racing might be expected to do so.

 

I'd previously checked through the other 5 links I'd been offered and found that they didn't work or were Internet TV sites requiring registration. Checking against the official site, I noticed something buried deep in the qualifying report (link in Italian) - official broadcast rights were with Sky and they were showing it next week (or possibly the week after - by that stage I couldn't be bothered to get the calender out).

 

The next hour was spent rambling through every Italian internet radio station I could remember or research in case anyone was unofficially broadcasting the race. Highlights included a lovely club cover of Queen's "You Don't Fool Me". But all the synths in the world weren't going to tell me how Giancarlo was doing in his home race...

 

After scanning through my social networking, blog and fora contacts (and finding a few photos of practise), I concluded that nobody else I knew had any further information on the race. By this point, I elected to take out my frustration in a game of Worms.

 

An hour later, logging back in hope more than expectation, I searched on Twitter and found Laura Bonetti tweeting about the race in progress! I knew she was at the track, but I'd assumed that her lack of tweets since the start meant that she was concentrating 100% on what was in front of her. I was pleased to be wrong and even more pleased when I read Giancarlo's car was in the lead. That must have been an exciting couple of hours...

 

So that, eventually, proved to be my one source of live information - a spectator who was generous enough to spend a little time not looking at the cars in order to post little updates. There's a certain excited tension about following a race via short occasional messages - you start imagining everything that could have happened, refresh, decide nothing's happened, refresh a few minutes later... ...and find that everyone's lined up behind a safety car because of someone else going off.

 

I probably should have seen an omen in that particular tweet. Just over hour prior to the chequered flag, it started raining. Nearly everyone stayed on slicks. It was on this awkward combination that Giancarlo went off-track. Vallelunga doesn't feature the acres of tarmac run-off that adorn the average Tilke-drome, so it ended Giancarlo's race. The classified position of 7th does not show that he and his team-mates  Perrazzini and Cioci had led the majority of the way without much trouble from opponents.

 

AF Corse still won the race with a different car (the #10 - they'd sent 4 to the race), followed by the pole-sitting #7 Kessell Racing and the #26 Porsche, which was a GT3.

 

The race was an interesting and sounded quite exciting, but would have been better with a little more... ...something. A bit like my viewing experience of it, really. Hopefully when the organisers turn this event into a 4-race series the coverage will improve.

 

* - Just don't tell the LMP1 teams at the LMS at Hungary this year that. The fastest of them was beaten by 5 ostensibly slower LMP2s...

 

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