Value of global premium sports broadcast rights to rise by 14% to £16bn in 2014
3 January 2014
- 14% growth predicted in 2014 compares to average growth of 5% between 2009 and 2013;
- Three-quarters of the total value of premium sports broadcast rights fees will be generated by just 10 competitions;
- Increase in rights fees driven largely by new broadcast deals for the Premier League, Germany’s Bundesliga and Major League Baseball.
Deloitte predicts the value of premium sports broadcast rights worldwide will increase to £16bn ($24.2bn) in 2014, a 14% rise, or £1.9bn ($2.9bn) over 2013. This increase in rights fees, one of the Deloitte Technology, Media and Telecommunications (TMT) Predictions, will be driven by new agreements with certain top tier European domestic football leagues and major North American sports leagues. The double digit growth compares to average growth of 5% between 2009 and 2013, and exceeds the forecast 4% increase in global pay TV revenues for 2014.
The premium sports in each market represent a small proportion of all professional sports activity. However, they represent the vast majority of viewer interest and the bulk of all television revenues.
About three-quarters of the total value of premium broadcast rights fees will be generated by 10 competitions: the top-tier domestic football leagues in England, France, Germany, Italy and Spain, the UEFA Champions League, and the four major North American professional leagues. The substantial revenue growth in 2014 will be largely driven by new broadcast deals for England’s Premier League, Germany’s Bundesliga and Major League Baseball. European football’s top-tier domestic leagues and top clubs competitions will generate £6.5bn ($9.8bn) of the total in 2014, of which the Premier League will contribute £1.9bn ($2.9bn).
Austin Houlihan, a senior consultant in the Sports Business Group at Deloitte, comments: “We see no signs that the premium sports rights value bubble is about to burst, rights fees for live content to premium properties overall will continue to grow. Premium live sport delivers large audiences, typically characterised by an attractive demographic profile. It drives subscriptions and generates advertising for broadcasters, particularly in an increasingly altered media landscape. In some cases, premium sports broadcast rights fees have been insulated from wider economic pressures by multi-year contracts.
“Television and premium sports are well matched for each other: at the highest level, sport is great unscripted live drama for television. Constant advances in technology are leading to ever more sophisticated, compelling ways in which sports can be portrayed.
“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. 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 will double in value from 2015/16.”
Notes to editors
Our methodology for determining the value of premium sports rights is based on recurring annual competitions only; we have not included the Olympic Games, FIFA World Cup or UEFA European Championship. Rights fees have been averaged over the duration of the respective contract. Fees have been converted into £ or US$ where applicable, using the June 30 exchange rate in that particular year. Values for each year are based on cumulative rights fees generated in that particular year for competitions operating on a calendar year and competitions operating across calendar years, so for example, 2009 refers to competitions operating in 2009 and 2008/09. We have obtained information principally from publicly available information released by rights holders, trade publications, confidential and proprietary sources.
We have defined premium sports broadcast rights as the most popular sports competitions in the biggest sports around the world. These include: the: top-tier domestic football leagues in each European, Asian, Latin American, Middle East and African country; respective top regional clubs’ football competition on each continent; four major North American professional leagues – Major League Baseball (MLB), National Basketball Association (NBA), National Football League (NFL), National Hockey League (NHL); top US college sports conferences; National Association for Stock Car Auto Racing (NASCAR), Formula 1, the Australian Football League (AFL) and National Rugby League (NRL), the Indian Premier League and Indian national team cricket.
About the Deloitte TMT Predictions
The 2014 series of Predictions has drawn on internal and external inputs from conversations with Deloitte’s clients globally, contributions from Deloitte member firms’ partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.
For a full copy of the Deloitte TMT Predictions report (due to be launched on Tuesday 14 January), please visit www.deloitte.co.uk/tmtpredictions.
About the Sports Business Group at Deloitte
Over the last 20 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.
For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup
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