could further goose the growth of the overall
market. Echoing Mortlock’s point about complex sports ecosystem, Jones says that industry
lines and definitions “continue to blur with more
crossover participation by traditional sport investors, operators, and rights holders.”
The Game Plan: New Media, More
Fans… and Growth
Media rights and gate revenue from live
events mark the two largest sources of revenue
in the sports industry. These interrelated areas,
which have been trending in different directions,
but are subject to similar disruptions, also give
rise to most of the challenges that drive sports
companies to seek consulting assistance.
Ticket sales and game attendance across
many sports have “generally leveled
off” for several reasons, according to
Jones, including competition from
game broadcasts, alternate entertainment options, and “time and price
pressures on certain ticket-buying
segments.” Although recent television media rights deals, especially the
National Football League’s record-setting
arrangements with traditional television networks, have generated billions of dollars in revenue, the rise of digital and social media (
Twitter live streamed 10 NFL games last season) will
complicate the future media rights agreements.
Jones notes that sports leagues will be “less likely to realize the same rights fee premiums for the
linear game broadcast” on the next deal cycle,
which begins after 2020.
Most sports leagues and teams appear to be
achieving extremely healthy revenue growth. But
a closer look indicates that much of this growth
stems “from weight not volume,” Sajdeh says.
“… They’re getting more pricing per unit of viewership than they are getting viewership [growth].”
Figuring out new viewership models in the
era of digital media figures prominently among
the four common challenges confronting sports
Consulting® APRIL 2017
• Rethinking Media Rights in the Digital Age:
The emergence of digital distribution outlets is
creating new ways for sports leagues and teams
to reach customers. Deloitte’s 2017 Sports Industry report cites Amazon and Apple as companies that could soon bid for sports content.