Why the World Cup TV Revenue Is Not as High as It Could Be

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UPDATED: Revenue from the world’s biggest sports event lags, as Euro market rules could prompt FIFA to seek big pay television pacts.

This story first appeared in the June 20 issue of The Hollywood Reporter magazine.

As the World Cup kicks off June 12 in Brazil, the world will be watching for less money.

Global TV rights deals for the most-watched sporting event have raised $1.73 billion so far, according to a new report from global research company IHS Technology. That's slightly less than the $1.74 billion generated at the same time before the 2010 soccer tournament, which went on to attract $2.4 billion in total deals.

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Unlike matches in most top-tier soccer leagues, the World Cup, staged by FIFA every four years, largely airs on free television in Europe. This is partly because most Euro rights are bought through the European Broadcasting Union and partly because matches involving national teams are "listed," which means that in countries such as the U.K. (where the BBC and ITV share rights), authorities require the event to air on free terrestrial TV to ensure anyone can watch it.

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The market restrictions matter because soccer-crazed Europe accounts for 50 percent of the $1.73 billion tallied, ahead of Asia and North Africa with 22 percent. In the U.S., where soccer is a minor but growing sport, pay TV network ESPN and Spanish-language net Univision are carrying the games after paying a combined $425 million for the 2010 and 2014 tourneys. Fox Sports and Telemundo won the U.S. rights for 2018 (Russia) and 2022 (Qatar) by more than doubling that price.

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A slew of factors are being blamed for the Cup's lack of growth in TV revenue, including the European economic downturn. And that lack of growth, coupled with the soaring value of sports to pay TV networks, could mean that FIFA will pursue more pay TV deals for future events -- "especially if it is unable to generate increases in its contracts in Asia, Latin America and the Middle East," the IHS Technology report states. Some stations already are pursuing this strategy. France's free TF1, after paying $177 million for Cup rights, sublicensed all 64 matches to the Al Jazeera-owned pay outlet BeInSport, which will simulcast the French team's play. Similarly, Italy's Rai has sold off games to 21st Century Fox satellite platform Sky Italia, retaining 25 matches.

IHS report author Tim Westcott cautions that the final TV deal numbers are not in, and because FIFA's reporting currency is U.S. dollars, conversions could cause a swing in values. Also, Westcott says, "It might just have taken longer to get rights deals in for the 2014 finals than in the last sales cycle."