Broadcast sports rights: premium plus
Media
The value of premium sports broadcast rights worldwide will increase to about £16 billion, a 14% rise, or £1.9 billion increase on 2013. The double digit growth compares to average growth of 5% between 2009 and 2013, and is likely to exceed forecast increases in global pay TV revenues for 2014. About three quarters of all premium broadcast rights fees will be generated by 10 competitions, including the English Premier League.
Television and premium sports are well matched for each other: at the highest level, sport is great unscripted live drama, and constant advances in technology lead to ever more sophisticated, compelling ways in which sports can be portrayed. In 2014, premium live sport will continue to deliver large audiences, typically characterized by an attractive demographic profile. It will continue to drive subscriptions and/or generates advertising for broadcasters, particularly important in an increasingly altered media landscape.
While many commentators continue to ask when the sports rights bubble will burst, leading to stagnating or declining fees, our view is that rights fees for premium sports properties overall will continue to grow. The Premier League enjoyed a 71% increase in the value of its domestic live rights from 2013/14, while the amount paid for UK rights to UEFA’s top club competitions should double in value from 2015/16.
While many commentators continue to ask when the sports rights bubble will burst, leading to stagnating or declining fees, our view is that rights fees for premium sports properties overall will continue to grow. The Premier League enjoyed a 71% increase in the value of its domestic live rights from 2013/14, while the amount paid for UK rights to UEFA’s top club competitions should double in value from 2015/16.
Premium live sport continues to deliver large audiences, typically characterized by an attractive demographic profile. It drives subscriptions and/or generates advertising for broadcasters, particularly in an increasingly altered media landscape. In some cases, premium sports broadcast rights fees seem to have been insulated from wider economic pressures by multi-year contracts.
The development of pay TV in particular has transformed the broadcasting of premium sports leagues. Live content is a key subscription driver for those leagues and underpins pay-TV business models. As the pay-TV subscriber base rises and revenue per user grows, operators are investing increasing sums to secure this key content.
New market entrants looking for attractive differentiating sports content have intensified competition driving substantial uplifts in rights fees. For example, BT’s entry into the UK sports rights market, acquiring sports content to help retain and build its telephony, broadband, and Pay-TV services, has resulted in substantial revenue uplifts.
