Sport Predominantly Local Activity

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Sport as Global Entertainment
Chris Gratton
Sport Industry Research Centre (SIRC)
Sheffield Hallam University
UK
History: Sport Predominantly Local
Activity
 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)
1960s, 1970s: Rise of National Sports
Markets
 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
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 Events
2009 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
45000
40000
35000
30000
25000
20000
15000
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
26000
25000
24000
23000
22000
21000
20000
19000
18000
17000
16000
15000
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
2
1985
0.5
1986
2
1988
4
1992
5
1997
4
Broadcaster
BBC/ITV
BBC
BBC/ITV
ITV
BSkyB
BSkyB
Rights fee
(£m)
5.2
1.3
6.2
44
191.5
670
Annual
rights fee
(£m)
2.6
2.6
3.1
11
38.3
167.5
Number of
10
live matches
per season
6
14
18
60
60
Fees per
live match
(£m)
0.43
0.22
0.61
0.64
2.79
Length of
contract
(years)
0.26
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
 Setanta
46 matches £2.8 m per game
 Total
UK rights
 Overseas
rights
£4.76 m per game
(£2.47m in 2004-7)
£1.7 billion
£625 million
Premier League TV Rights
2010-13
 Total
UK rights
 Overseas
rights
£1.8 billion
£ 1.4 billion
Premier League TV rights
2013-16
 UK
Rights (BSkyB/BT) £3.4 billion
 Overseas
Rights
(212 countries)
£2.5 billion
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
 Public
 Total:
Visitors: 1.47 billion Euros
Viewing Visitors: 1.09 billion Euros
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
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