Growing competition for sports rights in Western markets is helping to increase prices, and it also results in the rights being shared by more media owners. That is a key takeaway from a new report by Ampere Analysis, which highlights the impact of streaming.
Total annual media rights spend in the US, UK, France, Germany, Spain, Italy, and Australia grew 68% between 2014 and 2022, from $20.8bn to $34.9bn. The analyst firm says sports bodies are increasingly aiming to capitalise on the fragmented media market by repackaging the rights to sporting competitions to attract bids from both linear and digital broadcasters – with the rights revenue growth illustrating the success of this strategy.
One result is that core fans are being asked to pay more if they want to see all the competitions they care about. The company refers to “sizeable financial barriers” for this group because of fragmentation and warns that repackaging sports rights risks alienating lucrative sports fans and encouraging piracy.
However, the company points to a sports fan average of 3.3 paid streaming services per household – versus an average of 3.1 per household for ‘Internet users’ – as evidence that fans may be accepting the fragmentation, at least for now.
The fragmentation is better news for casual sports fans, with smaller content packages appearing at lower price points. The English Premier League provides a good example, where Amazon has picked up rights since 2019. Prior to that, fans had to pay the cost of a Pay TV premium sports package from Sky or BT to see Premier League fixtures.
Germany is highlighted as a good example of the trend. Here, the number of broadcasters with the rights to the top ten sports competitions has been consistently growing. In 2014 a trio of operators owned the rights; by 2022 that had more than doubled to seven. While Sky Deutschland has maintained its position as the market leader, its share of rights spend across the top ten competitions has fallen from 62% in 2014 to 40% in 2022. Streaming service DAZN’s share has more than trebled from 7% in 2018 to 26% in 2022.
A graph shows how the rights value for Bundesliga and the UEFA Champions League in Germany has risen during this period. In 2014 the figure was €556 million and in 2018 it reached €1,322 million before hitting €1,415 million in 2022.
Ampere Analysis believes wider rights sharing also reflects underlying pressures on media owners. The company says: “Reducing the financial burden, by sharing investment in rights to sports properties with other broadcasters, is one positive result of the fragmentation in the media market.
“This is the case for both incumbent TV players who are facing growing financial pressures and the new streaming entrants who are striving towards profitability and looking to slow their spending on content.”
Daniel Harraghy, Senior Analyst at Ampere, adds: “Shifting viewing habits have seen the continued growth of the streaming industry which, in turn, has brought new entrants to the sports broadcasting market. New buyers have the potential to increase the competitive tension in rights auctions, which is desirable for sports bodies.
“The rights to leading sports properties are being shared across a growing number of broadcasters. But as this trend continues, it’s key that the industry considers the additional cost barriers that result from such a strategy. Failure to do so has the potential to amplify existing piracy issues, while some services could see additional subscriber churn.”