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Golden goose | Sports media rights go from strength to strength

A new edition of the TVSM Global Report underlines the strength of the global sports media rights market, which is predicted to be worth nearly $50bn by 2019.

In these unsteady economic times, not many asset value charts track as consistently upwards as that for sports media rights globally. This market increased in value by a remarkable 18 per cent between 2014 and 2016 to nearly $43bn (€38bn), according to the TVSM Global Report 2016, a publication by sports media information service TV Sports Markets. The first edition of the report focused on 2014 figures.

The 2016 report’s findings underline the importance to sport of the media-rights revenue stream and the continued importance of sports content to media companies. The report predicts that the value of the market will continue to grow, hitting nearly $50bn by 2019.

Rich get richer

A lot of the growth in the last two years can be attributed to properties already at the top of the pile. American football’s NFL is up $600m in annual value. Football’s top properties have fared well, with Spain’s LaLiga up $450m, the Uefa Champions League up $600m and the English Premier League up $800m. But the biggest riser is basketball’s NBA. Thanks to new deals starting this year, and fully factored into the 2017 annual value, NBA media revenues are up $1bn between 2014 and 2016, and will rise another $1bn by 2017, when it will earn $3.8bn in total.

The NFL has a staggering lead over other properties, at nearly double the value of the second-placed Premier League in 2016. That gap will close next year when a new Premier League rights sales period fully kicks in, taking its value to about two-thirds that of the NFL.

Football remains the top-earning sport and, because it has a large number of strong properties, has a projected steady upward growth line through 2019. American football, basketball and baseball are also among the five most valuable sports, but because such a large chunk of their value relies on US domestic leagues, growth is more choppy.

The NFL, which accounts for close to 100 per cent of global American football rights value, jumped in 2014 and 2015 when a set of new deals with US broadcasters kicked off. As these deals are generally long-term and do not bring big annual increases in value, growth from 2015 to 2019 will be much slower.

That US college sport – counted as a single sport for the purposes of the report – is the fifth most valuable property underlines the massive value of the US market compared to the rest of the world.

In an attempt to better compare spending between markets, the 2016 report introduces two new measures for countries – sports media rights spending per capita, and sports media rights spending as a percentage of GDP (at purchasing power parity).

The UK tops both measures, with the US in second in each case. UK fees have soared in recent years because of the intense battle between the Sky and BT pay-television services.

Sport’s incredible run

Sport has benefited from an incredible line-up of growth factors supporting its value as a media rights product over the last couple of decades. In the last edition of the TVSM Global Report, those factors were listed as including:

  • Economic growth in Asia, Latin America and Africa;
  • Increasing penetration of pay-television;
  • Investment by pay-television operators in multiplay (telephone, broadband, mobile) offerings;
  • Increasing penetration of broadband, driving consumption of streamed content;
  • Growing sales of internet-connected mobile devices; • Exploding social media use;
  • Aggressive new players emerging in the rights market, some operating on a global level in competition with strong local operators;
  • Sports properties becoming smarter at exploiting their rights;
  • Consolidation in the sports rights agency market, with a smaller number of big players paying strategic fees for top content;
  • Changing viewing habits, in particular secondscreen activity;
  • New, media-friendly competition formats, such as Twenty20 cricket;
  • Fragmentation in media, reducing the types of content which can regularly deliver large audiences;
  • Improved broadcast technologies, such as HD, which allow media companies to earn incremental revenues on sport.

Many of these factors remain active in supporting the upward value trend.

However, there are some clouds. Emerging economies such as Brazil and China are wobbling. Any serious slowdown could hinder one of the big drivers of rights value growth – the ascension of billions of Asians, Latin Americans ‘middle-class’.

And it is not yet clear which way the growth of OTT (Over-The-Top, or internet-delivered television) will cut for sport. It may pump even more cash into rights fees by bringing a new crop of wealthy buyers to the market – Netflix et al. Or it could restrict growth by undermining the pay-television business models that have so richly rewarded sport in the last few decades.

And of course, the focus in this report on global value, and on the very top properties, masks dozens and maybe hundreds of individual stories of growth and decline in smaller markets, sports and properties around the world.

Nevertheless, taking a broad view it is clear that, in the short-term at least, the global value of sports media rights is rock solid and primed for further strong growth.

 

This article represents just a snapshot of the information available in the TVSM Global Report. The full report is packed with values, charts, forecasts and analysis, and is a must-read for those with any interest in the sports media rights business. It is available to buy now. For more information, go to: http://bit.ly/1NsyEOI

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