Sports media rights revenue set for modest growth | Programming | News | Rapid TV News
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The sports market in North America will grow at a compound annual rate of 3.5%, from $63.9 billion in 2015 to $75.7 billion in 2020, according to the 2016 edition of the PwC Sports Outlook.

SPorts right 12 Oct 2016The report projects that media rights revenues specifically will increase at a compound annual rate of 5.5%, from an estimated $16.3 billion in 2015 to a projected $21.3 billion in 2020.

The segment’s pace of growth is expected to stabilise and moderate over the next five years following the torrid pace realised over the past decade and across two deal cycles; a period which has positioned media rights to become the industry’s largest segment by 2018.

Consumer and advertiser engagement with game broadcasts and other sports media content is expected to remain strong; keeping media rights in demand among traditional broadcaster intermediaries along with other emerging distribution partners who are elevating the competitive environment for rights deals.

Sports properties continue to signal preference to monetise through rights fees from intermediaries, however, the composition of the media rights segment is likely to continue to diversify as more content is monetised through direct carriage fees of league networks and digitally through in-house and equity ventures involving direct collection of subscription and ad revenues, the report noted.

Beyond 2016, the industry should move into a period with more stable conditions relative to the past five years, which were characterised by post-recession recovery, CBA-related work stoppages and new media rights deals. The relative near-term stability is noted in part by limited recent transaction activity involving major pro league clubs, which tends to peak immediately before/after new CBA and national media rights deals and bottom out in the middle of those deal cycles when there is higher uncertainty regarding a league’s future economic conditions.

Yet while team ownership has stabilised at this point in the cycle, new business ventures by industry and its rights holders, partners and service providers are channelling significant incremental capital into sports; positioning for potential growth opportunities ahead and in support of team valuations and demand for limited partner interests.

PwC added that higher volatility likely will return to the industry-wide forecasts in next year’s edition of the outlook as the next cycle of rights deals begins to overlap with the five-year projection period and a shift in underlying economic conditions becomes more imminent.