Report: Sports Rights Ownership Fragments

According to Ampere Analysis, total annual media rights spend in the U.S., U.K., France, Germany, Spain, Italy and Australia grew from $20.8 billion to $34.9 billion between 2014 and 2022, an increase of 68 percent amid increasing fragmentation.

A new report from the firm finds that in major Western markets, the broadcast rights to popular sports competitions are increasingly being split across a growing number of services. It also asserts that changing viewing habits are driving the proliferation of streaming services that are turning to live sports coverage to boost engagement and subscriptions, and rightsholders are seeking ways to exploit this rise in potential buyers for the purpose of growing media rights revenues.

Reducing financial burden by sharing investment in rights to sports properties with other broadcasters is one result of the fragmentation in the media market. This is the case for both incumbent TV players facing growing financial pressures and the new streaming entrants striving toward profitability and looking to slow their spending on content, Ampere says.

Sports bodies are increasingly aiming to capitalize on the fragmented media market by repackaging the rights to sporting competitions to attract bids from both linear and digital broadcasters, the report continues. Rights revenue growth illustrates the successful implementation of the strategy, which may also support accessibility for casual fans, but Ampere notes that fragmentation places sizeable financial barriers to access in front of core sports audiences.
Currently, sports fans take an average of 3.3 paid streaming services per household versus an average of 3.1 for the average internet user. This figure is still rising—implying fans may be accepting of this increasingly fragmented media market for now.

Germany, it says, illustrates the fragmentation trend clearly. The number of broadcasters with the rights to the top ten sports competitions has been consistently growing. In 2014, a trio of operators owned the rights; by 2022, that had more than doubled to seven. Sky Deutschland has maintained its position as the market leader, its share of rights spend across the top ten competitions has fallen from 62 percent in 2014 to 40 percent in 2022. The streaming service DAZN’s share has more than trebled from 7 percent in 2018 to 26 percent in 2022.

Daniel Harraghy, senior analyst at Ampere, said: “Shifting viewing habits have seen the continued growth of the streaming industry, which, in turn, has brought new entrants to the sports broadcasting market. New buyers have the potential to increase the competitive tension in rights auctions, which is desirable for sports bodies, and the rights to leading sports properties are being shared across a growing number of broadcasters. But as this trend continues, it’s key that the industry considers the additional cost barriers that result from such a strategy. Failure to do so has the potential to amplify existing piracy issues, while some services could see additional subscriber churn.”