• Various countries are mentioned
throughout the case, with a specific
focus on America, United
Kingdom and Australia
• Covers the development of paid
broadcasting rights of televised sports
• The impact that sports popularity and
immediacy have on the advertising
• The interaction of professional
athletics association and global
• The complexity of the relationship between
broadcasters, content providers and
advertisers including BBC, NBC, ESPN,
FOX and others…
• The positive and negative effects of that the
money involved in the industry has on
sports, broadcasting rights and
• Recent change and initiatives that may
impact on the future of televised sport and
• In 1948, the BBC paid £15,000 (£27,000 in
today's money) for the right to telecast
the Olympic Games
• In contrast, the rights to the 1996
Summer Olympics in Atlanta raised $900
• In addition, the NBC network paid $3.6
billion to acquire the American television
rights to the Olympics
• The average number of Americans
watching the Super Bowl was 94 million,
according to Nielsen Media Research.
• The top eight television programs in
America are all sporting events.
• It is estimated that American
television firms spend around $20
billion annually on sports rights
• The money that television has
brought into professional sport has
put some of the top players among
the world’s highest-paid entertainers
• A study in South Korea by Spectrum,
found that live games get 30 percent
of the audience while recordings get
less than 5 percent.
Sports Takes Over
• Relation between sports and television
is more popular and immediacy.
• Stephen Wenn, of Canada, put money
and the television had a more enormous
impact on the Olympic games including
their time and location.
• For Instance: Asian Olympic picture
poses a problem for the American
network, Viewers learn the result on the
a) The money that television has brought into professional
basketball has put some of the top players among the world’s
highest paid entertainers.
b) Rugby has begun to be reorganized to make it more
c) American football draw the largest audiences, television has
also promoted the popularity of sports that stir more local
passions: rugby league in Australia, cricket in India, table
tennis in China, snooker in Britain.
d) What is less often realized is that sport is also changing television. To assuage the hunger for sports, new
channels are being launched at a tremendous pace.
e) In America, ESPN, a cable network owned by Capital Cities/ABC, started a 24- hour sports news network in 1997;
in Britain, BskyB channel.
a) In particular, sport suggests an answer to one of the
big problems that will face television companies in
b) How can viewers, comfortable with their old analog
c) Create an exclusive chance to watch a desirable
event, or to use the hundreds of channels that
digital television provides to offer more variety of
sports coverage than analog television can offer.
d) points out Richard Burton, a sports marketing
specialist. In the next few years, the main new
outlet for sports programs will be digital television.
• In America, sports accounts for around 15 percent
of all television program spending, for some, it’s
• Amount a channel willing to pay for broadcasting
• In America, $20 billion is spent on sports
rights per year.
• One of the biggest sporting coups in
the USA was purchased by FOX the
right to a year of national football
league right for about $4 billion.
• Rights for Baseball, Basketball, and
Iced Hockey are also in the $1 billion
• Kirch Media Group struck a deal to broadcast
the 2002 and 2006 soccer world cup finals.
• $2.2 billion for the right of broadcasting
the soccer finals outside America.
• Consumer surplus.
• The viewers are willing to pay more.
• Subscription Television and pay TV
• Viewers are charged for each event, the
television company will directly collect the
value viewers put into being able to watch.
• First Reason
• Those who own the rights to
sporting events are rarely just
profit maximizers. They also
have an interest in keeping the
appeal of their sport as broad as
possible. They may therefore
refuse to sell to the highest
• Second Reason
• The economics of televising
sports means that the biggest
revenues are not necessarily
earned by tying up exclusive
Overall sports contribute 10% of all
television ad income in America
The national networks are by far the biggest
buyers of sports rights in the United States.
Major sports rights are held by NBC alone
than by any other organization in television
Networks are currently asking and receiving
about $3M for a 30-second spot during the
The biggest growth in revenues from
showing sports will increasingly come from
subscriptions or pay-per-view
Giants and Profit
In America, DirectTV and Primestar, two digital
satellite broadcasters, have been tempting
subscribers with packages of sporting events
from distant parts of the country. "
In Germany, DF1, a satellite company jointly
owned by Kirch and BSkyB, has the rights to
show Formula One racing.
In Italy, Telepiu, which launched digital satellite
television in 1997, offers viewers a package in
September that allows them to buy a season
ticket to live matches played by one or more
teams in the top Italian soccer leagues.
Most skillful of all at using sports rights to
generate subscription revenue is BSkyB. It signed
an exclusive contract with the English Premier
League that has been the foundation of its
success which remarked £5 billion profit of the
business’s capital value of £8 billion.
Comparison of Sports
• Huge profit coming from
broadcast is consumed by
players not by clubs or the
bodies just like Hollywood
• Market for sportsmen is well
developed and cost of
players is rising.
• But in movies, they have
per-subscriber deals but in
sports they don’t.
Future of Sports
• Now Sports Clubs and Leagues will deal
directly with Cable and Satellites, and setup
their own pay-television systems.
• British Soccer People are trying to build a
sports market like American Local Sports
Networks (Ex. Madison Square Cable
WINNER TAKE ALL
• The cost in televising a championship game
or an ordinary game is quite similar but size
of audience and revenue generated change
the entire game.
• That’s why, top players will earn vastly
more than those slightly less good, who
play to smaller crowds.
The Referee’s Whistle
• Money is the key player which alters sports.
• The Rubgy League which was played in
summer was switched to winter as the
broadcaster won the contract for 87
• Having a huge sum of money, want to
create a rugby super league allowing the
best teams to play against eachother.
• Even creating a European soccer league was
• The big sporting bodies have generally held out
against selling exclusive pay-television rights
• Regulators have helped them, intervening in some
countries to limit exclusive deals with pay-television
• Some Countries passed a law to stop subscription
channels tying up exclusive rights to some big events,
such as the Wimbledon tennis championship.
• The real monopolists are not the
media companies, however, but
• But most countries have only one
national soccer league, and a
public that loves soccer above all
other sports and it differs from
• The players and clubs hold most of
the cards as television company
depend on them.
By the 90s the channels that were broadcasting sports events were thriving and they could clearly see the return on investment on the right to broadcasting sports events.
they could also see that this is not the maximum result in this endeavor. So they started to look into more methods to gain more profit. Also when the giants in the business start to gain more profit new channels stepped into the market and competition began for the right to broadcast. As a result of that the bidding wars for the right to broadcast became more fierce.
$2.2 billion for the right of broadcasting the soccer finals outside America.
(Six times greater than the amount paid in 1990,1994,1998)
And this made the consumers worry that their favorite sports show or event might only be available on subscription television, especially in Europe. In practice these were seems unnecessary although there were more sports events on subscription television
especially outside America’s vast advertising market,
the most popular events are remaining freely available and will be for many years to come, and there are two reasons for this.
First, Those who own the rights to sporting events are rarely just profit maximizers. They also have an interest in keeping the appeal of their sport as broad as possible.
Second, The economics of televising sports means that the biggest revenues are not necessarily earned by tying up exclusive rights. They can profit from advertising. Television maximizes the audience and advertisers were willing to pay a huge premium to get their brand out in the field because sports gathered the world's most desirable audience an advertisers' point of view young men with cash and sporting events draw the highest concentration in this category.