Sports Media Rights to Surpass Gate Revenue for First Time
This year, gate revenue has hit $19.2 billion.
Gate revenue for all sporting events in North America will take a backseat to media rights in terms of revenue for the first time next year, according to a PricewaterhouseCoopers study released Monday.
While much has been made about declining ticket sales to NFL games this year even though prices are falling, the PwC study does not break out football or any other sport. Instead, it looks at sports as a whole.
This year, media rights will come in at $19.1 billion, while gate revenue scores $19.2 billion. Next year, though, media will outproduce gate $20.1 billion to $19.6 billion, and its lead will grow from there, as media rights boasts a compound annual growth rate through 2021 of 4.3 percent, compared with gate's rate of 2.3 percent.
Part of the reason for the success of media rights is that more bidders, including non-traditional media outlets like Amazon.com and Twitter, are in the fray. On Monday, for example, Verizon said it has agreed to stream NFL games on mobile devices, beginning with playoff contests that start next month.
"Direct-to-consumer offerings and other digital content are anticipated to be stabilizing forces rather than material drivers of market size," PwC says. It adds that "future growth" in media rights will "primarily hinge" on new technologies like 3D and virtual reality.
As for the rest of the sports ecosystem in North America, sponsorship will generate the third-most revenue this year and next, while merchandising comes in fourth. All four segments together will rake in $69.3 billion this year and $71.9 billion in 2018.