Is the market for sports TV rights about to crash?

market for sports TV rights

Recent headlines about declining TV ratings for National Football League (NFL) and English Premier League (EPL) games and about a substantial loss of subscribers for sports channel ESPN, have shaken the international sports world. Again igniting the debate whether the market for sports TV rights is about to crash.

Last year the EPL sold the broadcasting rights for three seasons to SKY and BT for the astronomical figure of €5,78 billion (£5,14 billion). SKY pays over €12,36 million (£11 million) per game. A 67% price rise compared to the previous deal.

This hike in price mirrors a common trend in the whole sports market. A trend that sees TV rights fees increase dramatically. Recent developments may now ring in the end of this trend, but indirectly also point at the changing market of how fans consume sports.

About to crash or not?

Is the “market-is-about-to-crash” argument really founded?
Opponents say there are several obvious factors contributing to the temporary decline in TV ratings. First of all, the NFL had to compete with the American elections. With several key events, like debates, taking place during games.
Moreover, there are the (image) issues surrounding the NFL that are supposedly keeping fans away. Fans are believed to find the league too lenient on players crossing moral lines. Players’ national anthem protests would also not sit well with some fans.

Are fans really tuning out because of these reasons? The English EPL’s TV ratings have not been affected by the American elections. Yet market specific factors, such as a poor European Championships showing by the English side this summer or lower quality opening games, could be behind those drops.

Although these factors could well be the cause of lower ratings, it is not unthinkable the change in ratings are indeed pointing at a crash in the market for sports TV rights.

Something some in the sports market have long expressed. In 2014 Mark Cuban – Dallas Mavericks owner and successful businessman – predicted a decline in the NFL’s popularity within a decade, after the NFL expanded its television package. His point, and one that more sports insiders make about all the sports content that is offered, is that of abundance. There is too much sports content on, too often.

Mirroring the decline of non-sports TV ratings?

A long-term decline in sports TV ratings would mirror a trend seen in non-sports television in recent years. Where a shift in media consumption has taken place caused by cable cutting and the rise of innovative media providers such as Netflix.

Compared to other programming, sports have long been able to withstand this tendency because it is characterised by the need to experience it live (with regard to time). This live-nature also makes sports extremely suitable for advertisement, which has caused the broadcasting rights fees to increase to such high levels in the fist place. 

A changing market, looking ahead

Whether it is a temporary dip caused by multiple fixable factors or the first warning signs of a bursting bubble, the sports market needs to adapt to a changing modern market.

A market in which technological developments and a younger generation with different (consumption) wishes and habits change the way sports (media) is consumed. Earlier this year I wrote about one such technological development (in the sports market): live video streaming. I noted how it could well become the future of sports media consumption.

People are indeed switching from traditional broadcasts and channels to new technologies and formats. Subscriptions are cancelled and people are now quicker satisfied with just the match highlights on Facebook or an app. With the abundance of sports content and fans’ desire to always stay up-to-date (about multiple sports and teams), it becomes even more important that fans have easy access to short, but powerful, and free content.

The importance of TV rights income

Besides keeping fans satisfied by adjusting to changing wishes, sports organisations need to prepare for more challenging times in the TV rights market. A decline in TV income will affect the sports world tremendously.

Take for example Premier League clubs Arsenal and Manchester City. Before the new broadcast deal went into effect this season, both clubs generated 39% of their revenue (in 2015) from broadcasting according to Deloitte. With the new deal this will only rise. Underlining how dependent (football) organisations have become on the sale of TV rights.

It is therefore necessary for sports clubs and leagues to look for alternative income sources in case TV income declines (or even falls away) and because the market of sports consumption is changing. As of yet, it is a challenge to make alternative channels, like live video streaming, profitable. The deal between Twitter and the NFL, to live stream matches, had a lower value than insiders expected. Especially when comparing it to the fees paid for traditional broadcasting rights.

Nevertheless, I expect the market to find innovative ways to attract sports fans and to introduce new profitable business models. Many sports organisations are already adjusting to satisfy fans’ changing wishes. Real Madrid, for example, recently started broadcasting content from their TV channel on Facebook Live, generating more than 110 million video views in the process. The Spanish football league has also found alternative (digital) channels to share content with fans and thereby try to compete with the wealthy Premier League.

Developments like these hint at the potential of these new channels and when a truly profitable business model can be attached, it will become a real threat to traditional channels.

This article first appeared in Dutch on

Leave a Reply

Your email address will not be published. Required fields are marked *