The Sports Rights Bubble: Reaching The Tipping Point

The 20,000 Foot View: The broadcasting of live sport has been a key part of TV’s appeal and underpins the pay-TV ecosystem. However, a combination of entrenched cord-cutting and an ageing audience means that revenues are now moving out of synch with inflating domestic sports rights costs. In 2016, return on investment (ROI) for the top ten largest TV sports broadcasters declined by 10% on 2014 as the newly increased domestic sports rights costs kicked in. Sports rights investment by US, UK and Canadian domestic broadcasters is now moving from Euphoria into Profit Taking (as per the five stages of an economic bubble) as the smart franchises start to plan for exit from their pay-TV dependency.

Key Findings

  • Rights revenue for the US, UK and Canadian domestic sport rights franchises was up X% between 2014 and 2016
  • The 10 largest US, UK and Canada sports broadcasters spent $X billion on sports rights in 2017
  • ROI for domestic sports rights in the US, UK and Canada peaked in 2015 with a X-fold return
  • ROI on domestic sports rights declined by X% between 2014 and 2016 in the US, UK and Canada
  • New entrants X and X will initially push rights costs up further but they will subsequently exercise market power to reduce costs later
  • X% of sports TV viewers in the US, UK, Canada and Australia are aged X plus
  • Only X% of under 25s in the US, UK, Canada and Australia regularly watch sports on TV
  • Cord-cutting penetration in US, UK, Canada and Australia was X% in Q3 2017

Companies and brands mentioned in this report: 21st Century Fox, ABC, Amazon, Amazon Prime Video, BT, CBS, Facebook, Fox Sports, NBA, NBCUniversal, NFC, NFL, The Walt Disney Company, Rogers Communications, Sky Plc, Turner Entertainment Networks, Twitch, Twitter

Charts: 4
Pages: 14
Words: 2,854

Includes Synopsis, PDF, Slides and Dataset