Media rights to be sports top revenue generator: Report

Media rights to be sports top revenue generator: Report - InsideSport

The growth in media rights will propel the sports market in North America to $73.5 billion by 2019.

Revenue from media rights will rise 5.6% to $20 billion in 2018, and hit $22.6 billion by 2021, according to a PwC report. Gate revenue will grow at a slower rate of 2.1% to $19 billion in 2018 and will reach $21 billion by 2021, according to the report. Sponsorship revenue will grow 5.7% to $17.6 billion in 2018 and climb to nearly $20 billion in 2021. Merchandising meanwhile will register a further slow growth rate at 1.1% to reach $14.5 billion in 2018 and $15 billion in 2021.

Increasing competition between traditional broadcast partners and emerging OTT platforms, which drives their value up, will see that media rights will continue to be lucrative even in the midst of shifting broadcast landscapes. “There are also stronger paths to monetization across digital platforms in either rights form or direct subscription/ad-based models to the extent consumer engagement shifts from the linear broadcast,” the report added.

Media rights are expected to surpass ticket gate revenues as the sports industry’s largest segment by 2018, according to PwC’s new “At the Gate and Beyond” report. The report looks at the sports market in North America through 2020.

The PwC report states that media rights are projected to increase at 5.5% CAGR from an estimated $16.3 billion in 2015 to $21.3 billion in 2020. The pact of growth is expected to stabilize over the next 5 years following the torrid pace realized over the past decade, “a period that has positioned media rights to become the industry’s largest segment by 2018,” said PwC.

Meanwhile, consumer and advertiser engagement with game broadcasts and other sports media content is expected to remain strong, keeping media rights in-demand among traditional broadcasters and with other emerging distribution partners such as social media companies, the report states.

Broadcast rights are likely to remain an industry priority through the next deal cycle, but sports properties are focused on new digital and immersive products to reach new audiences, deepen engagement and displace any rights fee premium lost as pay-TV evolves away from or within the bundle, the report suggests.

Sports properties are eyeing emerging technologies such as personalized video, 3D video, virtual reality and augmented reality video, for a premier, immersive experiences with live or on-demand content. However, PwC noted it’s too early to determine these technologies’ impact on the sports market value chain.