That would be a huge mistake. I agree with mcarling: they should buy and make something out of Formula E instead. Why would Apple want to associate themselves with a boring, backwards, gas-guzzling 20th century Formula? That doesn't sound right.
That doesn't mean they can't turn F1 into a Formula E type series eventually. Maybe its boring to you, but its one of the most popular sports in the world so someone must like it.
This could also be something where Apple put in a bid to get exclusive steaming rights for AppleTV and it turned into Apple is buying F1.
As a long time F1 fan I agree that Formula E would make more sense for Apple than F1. Despite the gas guzzling comment from one of the members, F1 engines are the most efficient petrol powered engines currently developed (both from a gas consumption and thermal efficiency point of view) but getting involved in F1 makes no sense in the context of their Project Titan activities. Perhaps sponsoring an FE team might make more sense if they want to dip their toes in this world.
Bernie always, always does this kind of dance. He "puts it out there" that someone else is bidding on races to get venues to pay more and more. In this instance though, he is just trying to make it look as though there are other interested parties until all those deals fall to pieces, and will then buy it all himself to "save" Formula One. He believes that HE is F1.
Approaching this from a semi-serious perspective I think it really does make sense profitability wise. The sport isn't worth 8 billion dollars especially when American viewership is at its highest yet still around 250k per race. I
There is a whole big world out there that loves F1. While it might not be big in the USA, F1 is a worldwide sport. NASCAR is most certainly not. Apple is a global player. Please try to think outside your box of the lower 48 states. No other sport travels the world with so much profile as F1. Asia, S. America, Europe, Middle East. Where's NASCAR eh?
There are some viewer numbers on the following page:
Someone in the comments breaks down worldwide viewers by race:
2008 – 600 million viewers across 18 races – 33.333 million viewers per race 2009 – 520 million viewers across 17 races – 30.588 million viewers per race 2010 – 527 million viewers across 19 races – 27.737 million viewers per race 2011 – 515 million viewers across 19 races – 27.105 million viewers per race 2012 – 500 million viewers across 20 races – 26.316 million viewers per race 2013 – 450 million viewers across 19 races – 23.684 million viewers per race 2014 – 425 million viewers across 19 races – 22.368 million viewers per race
It's not entirely accurate to divide it like that as this assumes every viewer watches all the races; if they watched half the races each, it would be double the number of unique viewers. The top countries are about 3-5 million viewers per race and there are ~50 countries. 50-100 million unique worldwide viewers would be a reasonable estimate (close to Super Bowl numbers). It varies a lot by population and popularity per country with Brazil and China being the highest.
There's a survey here saying around 56% would be willing to pay to watch, most under $5 per race:
If Apple can sell 20m Apple TVs because of it, that's ~$3b revenue (say ~$1b profit) and there would be future upgrades. If they charge a subscription of $9.99 per year, that's another $200m per year. Formula 1 made $500m profit in 2013 on revenue of $1.7b:
The $8.5b purchase is for 35% not complete ownership, just a controlling share so they wouldn't get all the profit. They probably wouldn't be able to make it exclusive to the Apple TV as there are other shareholders and a lot of the revenue comes from the broadcast networks. $8.5b to gain maybe $300m per year in income for a declining audience doesn't seem like a good investment. The valuation has obviously been inflated by the finance companies who have invested in it with the aim of profiting big by persuading someone else to buy it at a premium.
$8.5b for 35% means the company is valued at $24b while generating $1.7 revenue and $0.5b profit. There are better investments out there that Apple can make that are more compatible with their existing business model like software and services companies. For example, games company Ubisoft can stand toe-to-toe with Activision and EA and is valued at 3.8b euros vs $30b and $23b for the latter. They reach an audience of ~50 million with popular games selling ~10 million copies. They made $1.5b last year with income of $124m and only need ~$1b investment. Apple would also get 30% revenue of every title on their platforms and they can develop games for Disney through a partnership. These don't have to compete with bigger console games like Battlefront but they can easily cover the low-end franchise games that use a template system with fast turnaround.
Apple should invest in companies that are undervalued with low market caps and high revenue/incomes. Formula 1 makes a decent amount of income and reaches a huge audience but a $24b market cap is excessive, especially seeing the audience numbers dropping. If it was $8.5b for the whole company, that would be more appropriate.
Yes Marvin even the financials make no sense. Someone slipped this to an F1 blogger leading him to believe it's true, but it most certainly is a lie to drum up interest. Twitter is a better investment than this, even without profit.
In the early 1980s, Apple sponsored an air balloon. They canceled the promotion when the balloon crashed. In the late 1980s / early 90s, Apple sponsored a Formula 1 race card. They canceled that promotion after the car failed to every win a race, and eventually crashed.
Shall we repeat this again?
Another fake rumour about Apple making a content bid to attempt to drum up interest. Next to Thursday Night Football and that fuel cell for smartphone company, this "story" is the biggest horseshit I've read.
Very much agreed. Why on earth would Apple buying F1 have anything to do with helping them with the Apple Car?
Apple should be sponsoring Formula E, not Formula 1. Formula E is the future, Formula 1 is the past.
Maybe that is what they are doing, this is only a rumor and could have their wires twisted. I agree F E is the future. Then again they could do both.
While the future probably does belong to electric vehicles, I personally think it will kill racing. I watched a part of the first FE race, and promptly turned it off because of how unexciting it was. A race car, regardless of the flavor, is simply not a visceral experience when an electric motor is powering the wheels instead of an ICE.
As a long time F1 fan I agree that Formula E would make more sense for Apple than F1. Despite the gas guzzling comment from one of the members, F1 engines are the most efficient petrol powered engines currently developed (both from a gas consumption and thermal efficiency point of view) but getting involved in F1 makes no sense in the context of their Project Titan activities. Perhaps sponsoring an FE team might make more sense if they want to dip their toes in this world.
Everything Apple does is done to increase sales of its products, period.
Therefor, an association with F1/FE would be for the purpose of extending sales of an Apple designed/manufactured electric vehicle. This is why Ford, Chevrolet, Pontiac and Chrysler all got involved in NASCAR racing.
That being the case, $8 Billion would be far better spent sponsoring an FE team at $250 Million per year, using Apple's Project Titan technology as a base, than it would be to get a seat on the FE governing board.
I could definitely see this as a business primed for growth. I feel there's somewhat an analogy with soccer and how it's grown in the US due to how it's different from the traditional American pro sports. It's more like an individual sport - and the Mac is more of a run-your-own business tool. Also, Apple picks high-cost real estate for branding both with ads and with stores. Lastly the relationship with carmakers could yield a lot.
Therefor, an association with F1/FE would be for the purpose of extending sales of an Apple designed/manufactured electric vehicle. This is why Ford, Chevrolet, Pontiac and Chrysler all got involved in NASCAR racing.
Well, not quite. Notice the two letters in the middle of that acronym stand for Stock Car. That's because back in the day that production vehicles were raced with little modification, up into the 70's. An FE car, and FE racing, would have little in common with an Apple Car, other than having 4 wheels, a battery, and a motor. Very, very different purposes that don't really serve one another.
They're probably be better off being the title sponsor of NASCAR...rumor has it NASCAR is asking $1 Billion over 10yrs...so $100 Million/yr. Thats like a weeks worth of profits. They'd get lots of exposure, could do exclusive stuff with teams, show off iOS stuff, setup fan experiences, etc. They'll probably have to spend another billion over the 10yrs to make it worth it, but they'd more than make they're money back. They couldn't really do an exclusive TV deal as NASCAR already has signed contracts with FOX and NBC for the next I think its 10yrs.
First, I bet Ive is pushing this - he is a car nut.
Second, the sooner F1 aborts Bernie Ecclestone the better off they will be. Some of the sleazy deals he has made with various vendors and venues are unsustainable and will have to be reworked if the whole thing is going to survive.
The idea of selling Formula One to one of the the tech companies came to be after Alex Hint had published the book, ‘Will Google Buy Formula 1?’ http://www.amazon.com/dp/B00JKGR3ZA
Hint also got in touch with Bernie’s assistant and all of the team leaders. You can read some of the related articles at Paddock Magazine http://www.thepaddockmagazine.com/?s=alex+hint
Comments
That doesn't mean they can't turn F1 into a Formula E type series eventually. Maybe its boring to you, but its one of the most popular sports in the world so someone must like it.
This could also be something where Apple put in a bid to get exclusive steaming rights for AppleTV and it turned into Apple is buying F1.
Asking to make a wifi router that doesn't radiate its signal is like asking to make a light bulb that doesn't radiate light.
In this instance though, he is just trying to make it look as though there are other interested parties until all those deals fall to pieces, and will then buy it all himself to "save" Formula One. He believes that HE is F1.
http://www.f1fanatic.co.uk/2016/01/17/how-do-you-explain-f1s-falling-popularity-since-2008/
Someone in the comments breaks down worldwide viewers by race:
2008 – 600 million viewers across 18 races – 33.333 million viewers per race
2009 – 520 million viewers across 17 races – 30.588 million viewers per race
2010 – 527 million viewers across 19 races – 27.737 million viewers per race
2011 – 515 million viewers across 19 races – 27.105 million viewers per race
2012 – 500 million viewers across 20 races – 26.316 million viewers per race
2013 – 450 million viewers across 19 races – 23.684 million viewers per race
2014 – 425 million viewers across 19 races – 22.368 million viewers per race
It's not entirely accurate to divide it like that as this assumes every viewer watches all the races; if they watched half the races each, it would be double the number of unique viewers. The top countries are about 3-5 million viewers per race and there are ~50 countries. 50-100 million unique worldwide viewers would be a reasonable estimate (close to Super Bowl numbers). It varies a lot by population and popularity per country with Brazil and China being the highest.
There's a survey here saying around 56% would be willing to pay to watch, most under $5 per race:
http://www.autosport.com/news/report.php/id/120142
If Apple can sell 20m Apple TVs because of it, that's ~$3b revenue (say ~$1b profit) and there would be future upgrades. If they charge a subscription of $9.99 per year, that's another $200m per year. Formula 1 made $500m profit in 2013 on revenue of $1.7b:
http://www.telegraph.co.uk/finance/newsbysector/transport/11142469/Formula-One-speeds-past-the-500m-profits-flag.html
The $8.5b purchase is for 35% not complete ownership, just a controlling share so they wouldn't get all the profit. They probably wouldn't be able to make it exclusive to the Apple TV as there are other shareholders and a lot of the revenue comes from the broadcast networks. $8.5b to gain maybe $300m per year in income for a declining audience doesn't seem like a good investment. The valuation has obviously been inflated by the finance companies who have invested in it with the aim of profiting big by persuading someone else to buy it at a premium.
$8.5b for 35% means the company is valued at $24b while generating $1.7 revenue and $0.5b profit. There are better investments out there that Apple can make that are more compatible with their existing business model like software and services companies. For example, games company Ubisoft can stand toe-to-toe with Activision and EA and is valued at 3.8b euros vs $30b and $23b for the latter. They reach an audience of ~50 million with popular games selling ~10 million copies. They made $1.5b last year with income of $124m and only need ~$1b investment. Apple would also get 30% revenue of every title on their platforms and they can develop games for Disney through a partnership. These don't have to compete with bigger console games like Battlefront but they can easily cover the low-end franchise games that use a template system with fast turnaround.
Apple should invest in companies that are undervalued with low market caps and high revenue/incomes. Formula 1 makes a decent amount of income and reaches a huge audience but a $24b market cap is excessive, especially seeing the audience numbers dropping. If it was $8.5b for the whole company, that would be more appropriate.
Therefor, an association with F1/FE would be for the purpose of extending sales of an Apple designed/manufactured electric vehicle. This is why Ford, Chevrolet, Pontiac and Chrysler all got involved in NASCAR racing.
That being the case, $8 Billion would be far better spent sponsoring an FE team at $250 Million per year, using Apple's Project Titan technology as a base, than it would be to get a seat on the FE governing board.
i think this report is hogwash.
But I agree that this report is hogwash.