Apple Pulls Out The $150m Black Card for F1–ESPN Left Holding the Bag…

Leave it to Apple to stroll into the notoriously insular world of Formula One, wave a $150 million check, and make ESPN look like it’s been paying for dinner with coupons. According to reports, Apple is now the top bidder for U.S. F1 rights, dangling a number so far above ESPN’s current $90 million annual payout that Liberty Media execs probably got whiplash doing the math.

(Source: Giphy) 

In short, Disney’s ESPN, which has been holding the U.S. rights since before Drive to Survive made every Wall Street guy suddenly care about tire compounds, is out of the bidding. Their “fiscal responsibility” quote really means “we’re not mortgaging the theme park to show you more Red Bull 1-2 finishes.” The numbers matter. F1 wanted between $150-180M. Only Apple came anywhere close to the ask; ESPN wasn’t about to double up for a sport U.S. audiences still treat like an off-brand Super Bowl with different accents.

(Source: Wall Street Journal) 

Now, I know you’re thinking, “Didn’t MLS just pull this trick with Apple?” Yes, and here’s why the F1 situation is its own animal. Unlike with Major League Soccer… a league that spent the better part of the last decade begging for relevance on basic cable… Formula One is already a globally entrenched monster. U.S. viewership finally broke into seven figures via ESPN (averaging 1.1M per race last year), but Liberty Media is still desperate to close the distance between “niche” and “mainstream” stateside.

However, Apple can hand Liberty a payday ESPN won’t even touch, but it comes with real opportunity cost. ESPN may not have the world’s best graphics package, but the network can produce a metric f*k ton of hype. That 24/7 SportsCenter echo chamber alone is worth millions in accidental fan conversion. With Apple, F1 gets cash, but it also gets a walled garden. Exhibit A: MLS on Apple TV. Messi highlights everywhere, but the games themselves basically disappeared from casual sports consciousness unless your algorithm is already weeping into a pink Inter Miami jersey.

(Source: Giphy) 

For investors, here’s what’s at stake with this: For Liberty Media, Apple’s offer isn’t nothing to scoff at… it’s a 67% jump in U.S. rights revenue overnight. That money gets fed straight into future team payments, U.S. race expansion, and whatever else Liberty dreams up to prevent the F1 bubble from doing its best SPAC impersonation. The other angle is Apple’s hardware ecosystem. With its F1 film clearing $309M globally and its haptic/AR tech basically begging to turn every iPhone into a pit wall, Apple is one of the few streamers with both the wallet and the infrastructure to make F-1 insufferable. That’s the bull case.

The bear case though, is that F1 disappears behind another paywall and becomes a motorsport Apple ARcade. For every hardcore fan who upgrades to a Vision Pro for 4K cockpit feeds, dozens more will just go back to pretending they know how NASCAR works. The “revenue vs. relevance” problem that every league faces in this streaming era just came skidding into Turn 1 at 200mph. 

(Source: Giphy) 

In the end, if (let’s be honest, when) Liberty Media signs with Apple, expect bragging about “digital transformation,” a flurry of Wall Street hand-wringing about broadcast reach, and a lot of U.S. fans googling “How do I watch F1 without getting Tim Cook’s face on my TV?” For now, ESPN’s out, Disney’s happy to be cashflow-positive, and Formula One moves from your cable box to the most expensive streaming paywall in sports.

Of course, we’ll see how this all plays out as the deal may or may not gets finalized. But if you’re a shareholder, definitely bookmark this. Tim Apple is doing whatever he can to pump his walled garden back to the moon. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Disney and Apple as mentioned in the article.