“I think there is more to this than meets the eye,” Murray Walker said after being scraped off the ceiling when he was told that Formula One was returning to its spiritual home at the BBC. The corporation had certainly wrong-footed sports rights observers with the surprise acquisition of the sport in a five-year, £200 million deal.

Formula One, the jewel in Michael Grade’s ITV Sport crown weeks ago, attracting millions to witness Lewis Hamilton’s challenge for the world title, was apparently now a worthless bauble. But Grade confirmed Walker’s suspicions when the results of a sealed bid for live Wednesday night Champions League football matches were released at 7pm by Uefa’s marketing agents. ITV has secured first pick of 17 matches, including the final, in a three-year agreement costing the broadcaster about £160 million.

It was a deal that advertisers said was vital for ITV’s short-term future. Juicy ties involving the cream of British football against European giants attract a minimum of six million viewers. Liverpool’s victory over AC Milan in Istanbul in the 2005 final enjoyed a peak of 14.9 million.

The commercial network could not afford to lose the mass football audience, but Formula One, despite a loyal fanbase, had less growth potential. Early-morning starts for races outside Europe mean that some grands prix play to a few hundred thousand fans, while the production, requiring months of international travel, is expensive.

BSkyB, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, had already secured live rights to 130 Champions League matches from 2009 to 2012.

ITV claimed that it was now the home of top-flight free-to-air football, having already secured the FA Cup and England matches, leaving the BBC’s cupboard of live football almost bare.

Grade said: “I’m thrilled that ITV is now the definitive home for all premium free-to-air football in this country. This is good news for ITV’s shareholders, advertisers and of course our viewers. With Arsenal, Chelsea, Liverpool and Manchester United all through to the quarter-final stage [in the Champions League] this year, British representation in Europe has never been stronger.”

ITV had been furious that the BBC was prepared to bid more than £150 million to poach the package in a three-year deal. The corporation would have had to pay £10 million to compensate Uefa sponsors, whose wares could not be promoted, but the BBC did not bid at any stage of the tender process.

The BBC argued that Match of the Day had secured a new three-year deal with the Premier League. It will screen this summer’s European Championship finals and the World Cups in South Africa in 2010 and Brazil in 2014. From 2009 it will also broadcast ten live Football League matches per season and the Carling Cup final.

Sports rights are often quietly negotiated under the corporate sponsor’s canopy at Cheltenham or Wimbledon. Armies of consultants and strategists are hired to persuade governing bodies that their bid will not only fill a sport’s coffers but also “expand its visibility and attract a new audience”.

A phone call to the BBC from Bernie Ecclestone, the Formula One impresario, who was typically unsentimental about losing ITV’s patronage after 12 years, alerted the corporation’s sports rights team to its availability.

The title race last season generated an additional £12 million in advertising revenue, but ITV struggled to sell a £4 million sponsorship package for the 2008 season, eventually settling for £3 million with Sony, despite an expected boost from the “Hamilton effect”. “This was a straightforward commercial decision for ITV,” the broadcaster said, announcing its exit from Formula One three years into a five-year deal.

Ecclestone never deterred from his mission to increase the earning capacity and global profile of his sport and sensed ITV’s declining commitment to Formula One. He said: “It’s not that we are unhappy with ITV but I think maybe they will have their hands full with other things and maybe the BBC can service us a bit better.”

Dominic Coles, the BBC’s director of sports rights, pitched Ecclestone a new, multimedia grand prix vision based around a new web portal called MySportNow. Races will be screened live on broadband and mobile phones, while the sport will be promoted through local and national BBC websites as well as the BBC’s international channels.

Coverage is expected to be on the flagship BBC One channel and the absence of advertisements was a big selling point. Coles said: “I can’t think of a major sport where the action is broken up by commercial breaks where there is no break in play.”

Ecclestone’s approach came at an opportune time for the BBC. With ITV parking Formula One mid-contract, the sport could not demand a premium for the rights — and only the BBC could deliver the mass audience Ecclestone required. ITV can now argue that its Champions League gamble has paid off.

BBC executives were aware that politicians would question another licence-fee intervention in the escalating sports rights market, but Jana Bennett, the BBC director of television, believed that the Formula One deal was good value for a sport that has a strong BBC heritage.

Coles, who was unable to discuss the Champions League bid because of a non-disclosure agreement, believes the BBC must maintain its presence in the sports market. “The licence-fee payer expects top sport from the BBC. We get as much criticism when we lose an event like the FA Cup as we do for entering the market.” he said.

Crucially, the BBC must demonstrate that it has not raided its programme budget to splash out on Formula One, which remains a niche television sport despite Hamilton’s arrival. Roger Mosey, the BBC director of sport, said: “Formula One is fully funded from our sports rights budget, which was signed off for the next six years.” Coverage would not be cut back on other, less glamorous sports.

The dealmakers

BBC: Roger Mosey BBC Director of Sport
Oxford history graduate who joined BBC Radio in 1980. The Bradford City supporter recruited James Naughtie to Today and won Station of the Year for his stewardship of 5 Live in 1998. Axed Grandstand as BBC sport boss and lost the FA Cup, but infuriated ITV with bid for Champions League.

ITV: Mark Sharman ITV Director of News and Sport
The Derby Evening Telegraph reporter joined ITV’s World of Sport in 1976. Launched cricket on Channel 4, then poached by BSkyB, where he oversaw nonsport channels. Revived Sir Trevor McDonald and News At Ten after moving to ITV in 2005. Giving up Formula One to keep Champions League.

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