Antena 3 chief executive Silvio González said that the Spanish commercial broadcaster could lose between €5 million ($6.6 million) and €12 million per year on its deal to broadcast the Formula One motor racing championship for two years, from 2012 to 2013.
The company’s financial report for 2011 said that the rights fee was about €40 million per year, according to the ADSLZone website. González said that the total cost of broadcasting Formula One could reach €42 million per year. Advertising is expected to generate €30 million to €35 million.
González was reported as saying that Formula One was “a very, very good product in terms of audience, but very, very bad in terms of profitability.”
Antena 3 acquired the rights from the Mediapro agency after merging with rival commercial broadcaster La Sexta. The latter had had a five-year deal for Formula One rights, from 2009 to 2013, cancelled by Mediapro after being unable to pay a rights fee instalment for 2012.
Following the merger in January, Antena 3 had “no other option but to buy the rights and minimise the risk to La Sexta,” according to González.
“La Sexta was unable to pay the amount specified in the contract, and if it had not been able to sell the rights to another operator, it would have faced huge penalties,” he said.
By acquiring the rights, Antena 3 ensured that La Sexta’s accounts would not include the significant liabilities of the Formula One rights fee.