Formula 1 Grands Prix demand across different distribution channels

ABSTRACT

Rationale

Over the last two decades, sports economists and management scholars alike have increasingly begun modeling the tv demand for professional sports, most notably association football. However, there as yet exists no empirical study on whether the observed mechanisms are robust across different distribution channels.

Design/methodology/approach

In this study, we add to this still-emerging literature stream by analyzing the robustness of otherwise well-explored determinants of tv demand across different distribution channels (free-to-air and pay-tv), also distinguishing between male and female tv audiences.

Findings/research contribution

Interestingly, exploring the German tv demand for F1 racing at two different tv channels holding non-exclusive media rights between 2011 and 2017, we note that the effects of most (e.g. the starting time, weather), though not all, determinants are robust across the two different channels and the two audience groups.

Practical implications

Our results thus suggest that media right holders interested in maximizing television audience demand for a sport broadcast are well-advised to add nuance to their communication efforts.

KEYWORDS:

• ‌broadcasting
• ‌F1
• FIA
• gender‌ differences‌
• ‌media
• motorsports
• outcome uncertainty‌
• ratings
• sport‌s
• television‌
• ‌viewership

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 In addition, there also exist somewhat related, complementary literature streams from authors exploiting survey data, for instance, to understand better consumer’s willingness to pay for sports broadcasts (e.g. Hammervold & Solberg, 2006).

2 As one reviewer has pointed out, our empirical research, therefore, also touches upon the somewhat related question of whether simultaneous broadcasts, for instance, two distinct different FIFA World Cup matches scheduled in parallel, affect the consumer's demand for each other. In this context, Van Reeth and Osokin (2020) note that perhaps unsurprisingly, such simultaneous broadcasts did negatively affect Russian TV demand for international football. Evidently, this finding seems robust across various tv markets, including the German market (e.g. Schreyer et al., 2017).

3 As these F1 Grands Prix take place worldwide, our empirical setting is conceptionally somewhat different from other empirical studies exploring, for instance, tv audiences’ demand for a sporting product produced in (1) the same market (e.g. Alavy et al., 2010; Scelles, 2017: Tainsky, 2010), (2) the same market but without any local contenders (e.g. Tainsky & McEvoy, 2012) or (3) in different market (e.g. Schreyer et al., 2018b). Further, we also refrain from exploring regional demand, i.e. regional tv audiences’ demand for a sporting product produced in the same domestic market (e.g. Gasparetto & Barajas, 2018).

4 However, as Schreyer and Torgler (2018) note, official rating data on Sky broadcasts are only available starting from 2011. This is also why our sky data only contains 136 races, while our RTL data includes 137 races, i.e. one race more.

5 Broadening the perspective beyond the German market, most previous empirical research modeling the tv demand for sports broadcasts similarly suggest that such gender differences are modest (e.g. Tainsky & Xu, 2019; Tainsky et al., 2014), although, perhaps, they seem to be somewhat more nuanced in survey research (e.g. Clark et al., 2009).

6 As many colleagues did before (e.g. Schreyer et al., 2017), we purchased the TV data exploited here from the Gesellschaft für Konsumforschung (GfK), which conducts representative TV ratings for the entire German TV industry. The data is/are generated from a representative sample of a minimum of currently 5400 households, including about 11,000 individuals. As Schreyer et al. (2018a) explain, this data represent(s) individual spectator rather than aggregated household decisions because each resident has to sign in or out by pressing a particular button.

7 While focusing on the top three drivers seems arbitrary, Schreyer and Torgler (2018) argue that according to their data, about 9 out of ten Grand Prix winners have started from the Grids one (ca. 50%), two (25%), or three (12.5%). Similarly, though perhaps unsurprising, Wesselbaum and Owen (2021) find that pole sitters, in particular, have a significant advantage over the remaining drivers.

8 In F1 racing, the distance of all races is typically equal to the least number of complete laps that exceed 305 km (cf. FIA, 2022).

9 As one reviewer noted, Schumacher, who returned from career retirement in 2010, was somewhat more successful in season 2011 (ranked 8th) than in 2012 (13th). Nevertheless, the presented results are robust to adding a more nuanced variable.

10 Noticeably, this second observation, that is a certain robustness across genders, is mostly in line with the previous research in both the German (e.g. Schreyer et al., 2018a) and the US (e.g. Tainsky & Xu, 2019) tv market.

11 Interestingly, results from additional estimations exploiting only these two variables indicate that these two variables already explain about half of the of the variance in German F1 tv demand at RTL, and about 20% at sky.

12 Insofar, given some broadcaster’s tendency to center on local heroes (e.g. MacArthur & Smith, 2021), this finding is certainly surprising.