Improved finances, major events to boost global sports market
EmptyImproved television finances, increases in merchandising and sponsorships, the emergence of new revenue streams from the Internet and mobile phones, and the FIFA World Cup and the Olympics will combine to help the worldwide sports market achieve sales of $120.9 billion in 2010 at a 7% compound annual growth rate (CAGR), according to PricewaterhouseCoopers' "Global Entertainment and Media Outlook: 2006-2010."
The report defines the sports market as consisting of gate revenues for live sporting events; rights fees paid by broadcast and cable television stations to cover those events; merchandising (including the selling of products with team or player logos); sponsorships (including naming rights and payments to have a product associated with a team or league); and other rights packages involving sports events or programming.
Regionally, the United States, which at $43.6 billion in 2005 was the world's most dominant in the sports category, will maintain that position, totaling a projected $61.6 billion in 2010 at a CAGR of 7.1%. EMEA (Europe, Middle East, Africa), which totaled $26.5 billion in 2005, will grow to $36.9 billion in 2010 at a CAGR of 6.8%. Asia Pacific's sports market, which was $13.3 billion in 2005, will total $17.9 billion in 2010 at a CAGR of 6.2%. Latin America will rise to $3.4 billion at a CAGR of 6.3%, while Canada will increase to $1.1 billion at a rapid CAGR of 24.2%, making it the fastest growing market for the period, due to the return of the National Hockey League (NHL).
The return of the NHL will also impact the U.S., where a rebound in national TV rights fees and new local, satellite, online, and wireless distribution rights will also fuel growth. Gate revenues will total an estimated $20.7 billion in 2010, growing at a CAGR of 6.6% and led by Major League Baseball, the National Football League, and the National Association for Stock Car Auto Racing. TV rights fees for the Olympics, to be aired by NBC during the forecast period, totaled $613 million for the 2006 Winter Olympics in Turin, Italy, and are contractually set at $894 million for the 2008 Summer Olympics in Beijing, China, and at $820 million for the 2010 Winter Olympics in Vancouver, Canada.
Merchandising will reach $18.5 billion in 2010 at a CAGR of 6.9%, while sponsorships will total $12.4 billion in 2010 at a CAGR of 8.4%; growth in both categories will be fueled by major sporting events and continued strong sales of licensed apparel.
In EMEA, increased competition in the TV distribution market, along with improved economic conditions and a subsequent increase in TV subscription spending, will help propel growth during the next five years; television rights will expand to $8.8 billion in 2010 at a CAGR of 6.8%. Gate revenues will be bolstered by major international events in the region (including the 2006 FIFA World Cup in Germany and the 2010 World Cup in South Africa), although high sellout rates for football (soccer) will limit the potential for growth in league attendance; as a result, gate revenues will rise to $17.9 billion in 2010 at a CAGR of 5.7%.
Corporations are increasingly using sports to develop relationships with consumers, thereby fueling sponsorship and merchandise spending, which will total $10.1 billion in 2010 at a CAGR of 8.9%.
The Asia Pacific region will likewise be driven by improved economies and a continued expansion in sports marketing; recent record-setting deals include the Australian Football League's selling of its TV rights to the Ten and Seven networks for $594 million, and the Board of Control for Cricket in India signing new sponsorship deals that will generate over $700 million during the next four years, compared with less than $100 million during the past four.
Gate revenues in the region will rise to $4.5 billion in 2010 at a CAGR of 6.2%, boosted by the Beijing Olympics. Television rights will increase to $3.9 billion at a CAGR of 6.9%, while sponsorships, merchandising, and other revenue will expand to $9.6 billion at a CAGR of 7.7%.
Meanwhile, gate revenues in Latin America will be boosted by 50 World Cup qualifying matches in 2009 and by dozens of Copas Libertadores soccer matches in 2007 and 2009; overall, gate revenues will rise to $890 million in 2010 at a CAGR of 2.1%. As with most other regions, improving economies and a subsequent increase in disposable income will help boost sponsorships, merchandising, and other revenue to $1.3 billion at a CAGR of 9.0%, while TV rights fees will advance to $1.2 billion at a CAGR of 7.2%.
The return of the NHL is expected to propel all components of Canada's sports market in 2006, while continued growth in the Canadian Football League and rising corporate sponsorships will sustain gate revenues and sponsorship growth. The 2010 Vancouver Olympics will also be a significant factor in those areas, as well as in TV rights fees.
Gate revenues will rise to $576 million in 2010 at a CAGR of 29.5%, with total TV rights fees up to $231 million at a 31.8% CAGR and sponsorships, merchandising, and other revenue expanding to $318 million at a CAGR of 14%.
The PricewaterhouseCoopers Global Entertainment and Media Outlook: 2006-2010 is the leading global entertainment and media industry forecast, including in-depth global analyses and five-year growth projections for 14 industry segments covering every major global region. The complete 632-page book, which includes a "Global Overview" can be purchased for US$995. The 50-page "Global Overview" can be purchased separately for US$95; individual chapters can also be purchased separately in electronic format for US$95.
SPECIAL OFFER: Purchase the book and receive six free months of the HollywoodReporter.com, or purchase the Global Overview or any individual chapter(s) and receive a free one-month online subscription.