NEW YORK: Despite younger consumers moving away from traditional sports broadcasting, and tech giants edging in on broadcasters’ traditional territory, sports rights will only continue to grow.
This is according to PwC’s Sports Outlook 2017 study, which forecasts a compound annual growth rate of 3.1% across four segments of media rights, sponsorship, merchandising, and gate revenues.
Of the four, media rights are expected to post the most consistent year on year growth at 4.3% to reach an estimated worth of $22.6bn by 2021. Traditionally, the biggest money maker has been gate revenue, though that is now expected to change next year as media rights out-earn stadium takings by $579m.
Michael Keenan, sports practice leader at PwC, told AdAge that he was “bullish” on media rights. In part, this is down to “what appears to be a great deal of competition out there for a variety of soon-to-be-available rights packages”.
Recently, broadcasters have been looking over their shoulders. In the UK in August, Amazon claimed its first broadcast casualty as it outbid Sky for the exclusive right to broadcast ATP tennis. In the US, the company has won the rights to broadcast ten of the NFL’s Thursday-night American football games with NBC and CBS, for $50m, parrying competition from Facebook and YouTube.
However, PwC noted the disruption from new, financially muscular companies. “Broadcast rights preservation,” it wrote, “is likely to remain an industry priority through at least the next deal cycle to avoid potential further dilution of rights fees.”
In future, growth within the media rights segment “will primarily hinge on market engagement with future generations of digital products, which deliver premium, immersive experiences.” These could include personalised video, 3D experiences, as well as augmented and virtual realities.
Sourced from PwC, AdAge; additional content by WARC staff