PwC: Media Rights Fees for Sports in North America to Reach $16.4 Billion

NEW YORK: The fees paid to show sporting events on broadcast and cable networks, television stations, terrestrial radio, satellite radio, the internet and on mobile devices are expected to reach $16.4 billion by the end of the year, according to PricewaterhouseCoopers.

The At the Gate and Beyond: An Outlook for the Sports Market in North America Through 2019 report projects media rights to increase at a compound annual rate of 7.2 percent, from an estimated $14.6 billion in 2014 to a projected $20.6 billion in 2019. This will make media rights the industry’s largest segment by 2018, surpassing gate revenues (which are primary market ticket sales for live sporting events), sponsorship (fees paid to have a brand associated with a team, league, facility or event) or merchandising (sale of licensed products with team and league logos).

Local TV rights in MLB, NBA and NHL will likely contribute to the overall sector growth, with more than 35 percent of current deals set to expire over the next five years, though on a smaller scale than the national rights deals entered by the major pro leagues, athletic conferences and other sanctioning bodies that are predominately driving industry-wide growth.

PwC warns that "as consumer and advertisers continue to migrate toward internet-connected devices and second-screen activity, it is more likely the traditional pay-TV model will have transformed (e.g. smaller channel packages, reduced rates) by the next deal cycle of major sports property rights. As a result, the next deal cycle, currently outside the outlook period, is unlikely to realize the same rights-fee premiums as were applied during the current cycle as cable providers sought to secure sports content in support of the overall pay-TV package model."