Sport as Global Entertainment

Chris GrattonSport Industry Research Centre (SIRC)

Sheffield Hallam UniversityUK

Prior to 1960s sport was predominantly local activity Broadcasting rights income, government funding of

elite sport, and sponsorship income were negligible Sport market dominated by mass participation sport

with the voluntary sector the main supplier Elite sport mainly amateur with exception of

professional team sports (where rewards were modest)

History: Sport Predominantly Local Activity

Increasing importance of international sporting competitions creating need for national policies and strategies for elite sport

Increasing visibility of these competitions through television

Sport for all movement recognising health and social benefits of sport for all creating need for national policy for mass participation sport

National agencies for sport policy created Increasing importance of government in sport

1960s, 1970s: Rise of National Sports Markets

Post 1980s: Globalisation of the Sport Market

Globalising Forces: Increasing globalisation of media coverage

of major sports events (e.g. Olympics, Soccer World Cup)

Global recognition of top athletes Association of these athletes with global

sports brands (e.g. Nike, Adidas)

Characteristics of Global Sports Market Escalation in price of broadcasting rights for

global sports events. Global marketing of major sports products by

using images (not words) recognisable worldwide Global sports celebrities most important part of

these images Escalation in price of sponsorship deals for both

events and athletes by both sport (e.g. Nike, Adidas) and non-sport (e.g. Coca-Cola, McDonalds) sponsors

Olympic Games

London 2012

TV

London had a Global TV audience of 4.8 million compared to:

– - Beijing 4.7 million

– - Athens 3.9 million

– - Sydney 3.7 million

New Media London2012.com became the world’s

most popular sport website with 431 million visits

IOC’s website attracted 16 million visits up from 10.6 million for Beijing

London 2012’s social media sites (Facebook, Twitter and Google +) attracted 4.7 million followers

Countries broadcasting the Olympics

Olympic Summer Games

1936 Berlin 1

1948 London 1

1952 Helsinki 2

1956 Melbourne 1

1960 Rome 21

1964 Tokyo 40

1968 Mexico City n/a

1972 Münich 98

1976 Montreal 124

1980 Moscow 111

1984 Los Angeles 156

1988 Seoul 160

1992 Barcelona 193

1996 Atlanta 214

2000 Sydney 220

2004 Athens 220

2008 Beijing 220

Olympic TV rights fees (US$-million)

1960 Rome 1

1964 Tokyo 2

1968 Mexico City 10

1972 Münich 18

1976 Montreal 35

1980 Moscow 88

1984 Los Angeles 286

1988 Seoul 402

1992 Barcelona 636

1996 Atlanta 898

2000 Sydney 1,332

2004 Athens 1,494

2008 Beijing 1,739

2012 London

2,569

Distribution of revenues from broadcasting rights

 IOC LOOC

1948 – 1968 1-4% 99-96%

1972 – 1980 10% 90%

1984 – 1992 33% 67%

1996 – 2004 40% 60%

2006 – 2010 51% 49%

2010 --------LOOC receives a guaranteed amount

IOC Broadcast Rights Revenue

The total money income the IOC received from its share of the Beijing 2008 Games broadcasting rights income ($0.89 billion) was 500 times more than its share of the broadcasting rights income for the Munich 1972 Games ($1.28 million)

Beijing received $0.85 billion, just over 50 times more than Munich

Listed Events2009 Independent Review

Panel

IOC Evidence

Olympic Charter: which requires that the IOC take 'all necessary steps in order to ensure the fullest coverage by the different media and the widest possible audience in the world for the Olympic Games.'

At the Beijing Olympics live Olympic Games in the UK content amounted to 5,000 hours covering 28 sports.

The BBC broadcast 240 hours of live content from Beijing or just 4.8% of the total. That is, 95% of the Olympic Games content was not broadcast to the UK viewing public.

FIFA Evidence

FIFA's argument in relation to the World Cup was that they were happy for part of the tournament to be listed (eg opening match, matches of home nations, semi finals and final) but they preferred a model operated in some other European countries (eg France) where a partnership between free-to-air and Pay-TV broadcasters shared the tournament.

FIFA Evidence

Loss of broadcast revenue was FIFA's main concern (unlike IOC's argument relating to lack of coverage)

2007: event income accounted for 89% of FIFA revenue with the bulk of this coming from the sale of broadcasting rights to the 2010 World Cup

English Premier League

Football League attendances 1947 - 1985

15000

20000

25000

30000

35000

40000

45000

47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85

The Future of Football 1985

“Football will no doubt survive in British culture in one form or another. It will remain a strength in regions where traditional male working-class culture persists.......Perhaps football belonged to an earlier phase of industrialisation and has only a tenuous place in post-industrial society”

Chas Critcher

Football League attendances 1986 - 2000

15000

16000

17000

18000

19000

20000

21000

22000

23000

24000

25000

26000

86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000

The cost of the rights to live league matches from the top division in England, 1983 to 1997

Start date of the contract

1983 1985 1986 1988 1992 1997Length ofcontract(years)

2 0.5 2 4 5 4

Broadcaster BBC/ITV BBC BBC/ITV ITV BSkyB BSkyB

Rights fee(£m)

5.2 1.3 6.2 44 191.5 670

Annualrights fee(£m)

2.6 2.6 3.1 11 38.3 167.5

Number oflive matchesper season

10 6 14 18 60 60

Fees perlive match(£m)

0.26 0.43 0.22 0.61 0.64 2.79

Broadcast Rights Fees for Sport

The single biggest influence on the economic position of English Premier League football is the increase in income from the sale of domestic broadcasting rights:

1985 annual income from TV, £3 million 1997 annual income from TV, £170 million 2001 annual income from TV, £540 million 2008 annual income from TV, £791 million 2010 annual income from TV, £823 million

Premier League TV Rights 2007-10

BSkyB 92 matches £4.76 m per game (£2.47m in 2004-7)

Setanta 46 matches £2.8 m per game

Total UK rights £1.7 billion

Overseas rights £625 million

Premier League TV Rights 2010-13

Total UK rights £1.8 billion

Overseas rights £ 1.4 billion

Premier League TV rights

2013-16

UK Rights (BSkyB/BT) £3.4 billion

Overseas Rights £2.5 billion (212 countries)

British Sky Broadcasting

Satellite Broadcasting Company set up in late 1980s Massive losses in early years, and by 1992 still making a

loss with only 1.5 million subscribers In 1992 bid £304 million for Premier League Football TV

rights 1997

– - Europe’s most profitable broadcaster with profits made at £8 per second

– - Market capitalisation of £10 billion– - 7 million subscribers; in 2013, 10.4 million subscribers

Over 50% subscribers say sport is main reason for subscription

Over 50% operating costs are sport-related

Football World Cup

World Cup 2006 in Germany

Economic impact of Overseas Visitors Stadium Visitors: 1.47 billion Euros

Public Viewing Visitors: 1.09 billion Euros

Total: 2.56 billion Euros

Average per match: 40 million Euros

Conclusions

There is no doubt that sport is global entertainment

Within a fragmented television landscape where much is recorded, safe and predictable only sport offers uncertainty, risk and ‘liveness’

Most of all live sport even on television has the ability to generate powerful emotions and this drives the global demand for sport