Deloitte projects double-digit growth with no sign of demand easing for European football leagues and big four US sports
The market for global sports rights will hit £16bn in 2014, a rise of 14% on last year, as demand for top-flight European football and Major League baseball entices hefty investments from broadcasters.
Deloitte said in a report that it saw no end to the rush for premium sports rights, with revenue growth driven by new broadcast deals for the English Premier League, Germany's Bundesliga and US baseball. The accounting company added that sports rights payments will outpace global pay TV revenues, which are expected to grow 4% this year, with premium sports content more valued than ever as a lure for audiences.
Last year BT dropped a bombshell on the sports world when it secured the rights to broadcast Champions League and Europa League football for £900m from next year, more than double the existing £400m deal with ITV and BSkyB.
European football will contribute 46% of the 2014 rights total with £6.5bn, Deloitte said, with the Premier League accounting for £1.9bn. The growth in cost of sports rights has accelerated this year, having grown by an average of 5% over the past four years before the projected double-digit leap in 2014.
Austin Houlihan, a senior consultant in sports business at Deloitte, said new market entrants "looking for attractive differentiating sports content" were driving up fees as they take on established players such as BSkyB.
Houlihan said there was no sign that the "premium sports rights bubble" was about to burst: "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."
Deloitte said 75% of the rights windfall will be generated by 10 competitions: the leading domestic football leagues in England, France, Germany, Italy and Spain, the Champions League, and the US ice hockey, baseball, American football and basketball leagues.