Apple buys Formula 1 | A warning against the dangers of speculative journalism

The next round of Premier League media rights will come down to a face-off between Apple and Amazon. The winner will use football to drive global subscriptions to iTunes or Prime respectively by offering a single point of entry across every media market. One ticket to every game of the season wherever you are in the world: Netflix for Sport. The price will be north of $10 billion.

This is a version of a story I’ve heard, in varying guises, several times over the past few months.

A version of the same story arose recently, with Formula One as the context. The blogger Joe Saward wrote a post-Silverstone summary piece that suggested Apple was about to buy F1 from CVC: “Apple has plenty of money for investment and $8 billion for the Formula One group would not be a huge deal. The sport currently generates $900 million a year for its owners, although most of this now goes to debt repayment, because CVC has already taken the money. Switching the sport to AppleTV could generate big revenues. Heineken recently entered F1 believing the sport will bring it 200 million new customers. OK, it’s beer, but if Apple saw similar potential, the impact could be dramatic. Apple TVs cost $200 each, but selling 200 million of them could generate $40 billion.”

Saward’s piece ended with a disclaimer: “None of this is more than speculation, but one can see a solid business case for making such a move.” This didn’t stop it getting picked up by other news outlets that ran the story as a news line.

Elements of the truth

Today both of these stories – the Premier League and F1 – are out there, swirling around social media and on to the bars and conference halls. The reason for the broad pick-up is that the stories contain elements of truth. Apple is in the content game. It is very cash-rich and sport feels like something it might go for at some stage.

To quote every crime caper ever written, Apple has both the motive and the opportunity. Cue Inspector Morse in a red Jag.

“When a fact begins to resemble whatever you feel is true, it becomes very difficult for anyone to tell the difference between facts that are true and‘facts’ that are not,” wrote Katherine Viner, editor of The Guardian.

Likewise, it is enough that the Apple stories feel right. They have, to quote American satirist Stephen Colbert, ‘truthiness’. These stories share some common characteristics in that they may or may not be true, but they are exciting. The act of sharing them positions me as someone on the inside track, someone worth knowing, particularly among the poor unfortunates who mistake what I’m saying for actual knowledge.

Coverage of the sports business is full of truthiness stories, some of which endure for years, even decades. I can’t count the number of people who have approached me with ‘news’ of a European breakaway league run by the big clubs of England, Spain, Germany and Italy. This has been a persistent industry rumour since Sky bought the Premier League rights in the early 1990s. There is a feeling of inevitability about it, which highlights one of the great benefits of a truthiness story: the good ones don’t have an end date. They either turn out to be true – it happens and Apple buys F1 – or it remains in the holding pattern entitled ‘just hasn’t happened yet’.

But below the macro level are the more mundane micro ‘facts’. These are even more pervasive and arguably more powerful, because they are too small to bother about in isolation. They trade in reader apathy, burrowing into the foundations of day-to-day reporting until they become received industry wisdom. There are many examples of stories that get regular coverage, but are never true. For example, the hit taken by bookies around a major sporting upset or the amount of money a promoted club receives for entering the Premier League. These are numbers that lead the national and international news agenda at particular moments in the year. They are never factually correct. However the figures quoted become the anchor for conjecture for the following year. They never fall.

Hugely inflated

The dollar valuations attached to sponsorship deals in the mainstream media are notorious for their inaccuracy and are often hugely inflated. But something happens at this point which is revealing. The numbers change context – gentrified – moving from mere journalism to become the basis of corporate strategy.

This shouldn’t be surprising, because in essence stories and strategy exist to do the same thing: they attempt to make sense of chaos and luck. Once cleansed of its journalistic roots, the story becomes highly valuable trusted intelligence, which then forms the basis upon which huge bets are made.

Take the Brazil story as an example, which is now looking like a classic truthiness yarn elevated to multi-billion-dollar strategy. At the turn of the millennium, highly-paid economists at Goldman Sachs named Brazil as one of the four countries they believed would dominate the global economy over the subsequent two decades. Brazil was the B in the BRICs, along with Russia, India and China, and the country hitherto known for its beaches, poverty and football became a magnet for foreign investment. The sport business trusted Goldman’s story and put Brazil at the centre of its strategy for the next decade, i.e. this one, trusting it with its most precious gifts, the Fifa World Cup and the Olympics. As with all bets, there have been winners and losers, fortunes won and lost, and lives changed for better and worse. Yet the truthiness story upon which it was based is all but forgotten. We don’t talk about the BRICs much anymore. 

Richard Gillis is the author of The Captain Myth: The
Ryder Cup and Sport’s Great Leadership Delusion,
published by Bloomsbury in the UK and US.

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