The value of premium sports broadcast rights worldwide is likely to amount to £16 billion (€19.33 billion) this year, or 14% more than in 2013, according to Deloitte.
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.
Significantly, the growth contrasts with an average figure of 5% between 2009 and 2013 and is more than the projected 4% for global pay-TV revenues for this year.
Some three-quarters of total premium broadcast fees will be generated by 10 competitions, namely the top football leagues in England, France, Germany, Italy and Spain, UEFA Champions League and the four major North American professional leagues.
Most growth this year will be driven by new broadcast deals for the Premier League, Bundesliga and Major League Baseball. European football’s top-tier domestic leagues and top clubs competitions will generate £6.5billion of the total in 2014, of which the Premier League will contribute £1.9 billion.
Commenting on the predicted rise, Austin Houlihan, a senior consultant in the Sports Business Group at Deloitte, said: “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.”
