Tech giant Apple (AAPL) is in talks to acquire the U.S. broadcast rights to screen the Formula 1 race car series, challenging the current broadcaster Disney (DIS). According to the Financial Times, the iPhone maker is expected to bid for the Formula 1 rights when the contract becomes available next year. The news comes amid the amazing response to F1: The Movie, starring Brad Pitt.
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Apple Aims to Capitalize on F1 Frenzy with U.S. Broadcast Rights
The F1 movie, starring Brad Pitt, is the first massive box office success for Apple after the company ventured into original content creation for its Apple TV+ streaming service. Remarkably, the F1 movie has generated about $300 million, making it the highest-grossing film for Apple. Previously, the company faced disappointments with its two films: Killers of the Flower Moon and Napoleon.
Liberty Media (FWONK), Formula 1’s U.S. owner, expects the movie, along with Netflix’s (NFLX) Drive to Survive documentary series, to have boosted the value of the rights for its races by attracting a younger audience. Prior to the movie’s release, Citi analysts estimated that F1’s next U.S. broadcast deal could be worth $121 million per year. Last year, its total global media rights revenue increased by about 8% to nearly $1.1 billion.
Reportedly, F1 has yet to decide on its future broadcasting arrangements. Also, ESPN may retain the rights. However, ESPN’s exclusive negotiation window expired last year without a deal, opening the door for rival bidders to enter the race.
Formula 1 Streaming Rights Could Boost Apple’s Services Revenue
Apple has been attempting to capitalize on opportunities in the lucrative live sports streaming market. The company’s previous deals include a 2022 agreement with Major League Baseball to broadcast games on Friday nights and an arrangement with North America’s Major League Soccer.
The Formula 1 race car series makes $85 million annually from its existing broadcast partner ESPN. F1 also streams live races on its own streaming platform in the U.S. and charges users directly. The U.S. is a key market for Liberty Media. The company has added Miami and Las Vegas to its race calendar in recent years, complementing its Grand Prix in Austin, Texas.
Liberty Media completed its Formula 1 acquisition in 2017. According to the Financial Times report, F1’s audiences on ESPN have doubled from 554,000 viewers per race in 2018 to about 1.1 million in 2024. In fact, F1 has garnered an average of about 1.3 million viewers in the first 10 events this year, with stellar viewership in Australia, China, Monaco, Spain, Canada, and Austria.
Given this kind of strong fan base and further interest triggered by the movie, Apple’s acquisition of the broadcast rights could boost its Services business revenue. Currently, Apple does not provide specific details for Apple TV+ revenue and its production company Apple Studios. It includes them in the Services business, which comprises other offerings such as the App Store and Apple Pay. Apple’s Services business, which generates over $100 billion in annual revenue, has been a key growth driver for the company and has helped address the weakness in iPhone sales amid rising competition.
Is AAPL Stock a Buy, Hold, or Sell?
Apple stock has declined 16% year-to-date, with investors concerned about the impact of macro pressures and tariff woes on the company’s business.
Wall Street has a Moderate Buy consensus rating on Apple stock, based on 15 Buys, 10 Holds, and one Sell recommendation. The average AAPL stock price target of $228.29 indicates 8.7% upside potential from current levels.
