Major TV broadcast deals are driving industry growth.
Melbourne, Australia (PRWEB) April 10, 2014
The Sports Administrative Services industry has become increasingly valuable to TV broadcasters over the past five years, driving revenue growth. Substantial new broadcast rights deals signed by major players has driven revenue growth by an estimated compound annual 6.5% over the past five years. This includes consistent strong growth of 6.5% in 2013-14, to take industry revenue to $3.4 billion. The value of live sport to TV broadcasters was evident in the AFL's five-year $1.3 billion deal with Channel Seven and Foxtel announced in April 2011. This was followed up by a five-year $1.0 billion deal for Channel Nine and Foxtel to gain the rights to NRL coverage, which was announced in August 2012, and Cricket Australia's five-year $690.0 million deal with Channel Nine and Channel Ten in July 2013.
IBISWorld Industry analyst David Whytcross states “while revenue composition for major players has turned towards broadcast rights, ticket sales have continued to grow due to expansions by the AFL and A-League.” Sporting events occur year-round in Australia, with the availability of constant events in summer and winter driving attendance increases. Established leagues are competing with each other for market share, which is evident in the two new AFL teams being located in the population growth corridors of western Sydney and the Gold Coast – Rugby League's heartland. Such competition has had the effect of increasing overall attendance and participation for both sports, contributing to the strong broadcast rights deals. Most major players are set up over the medium-term due to incumbent broadcast rights deals. According to Whytcross, “the growth precedents set by recent deals is anticipated to result in similar revenue increases over the next five years, as live sport becomes increasingly valuable to TV broadcasters in a marketplace where consumers can view regular programming online and on demand.” A potential reduction in the Federal Government's anti-siphoning list could result in competition growth, led by Foxtel, pushing up the value of broadcast rights. Exclusive pay-TV deals can have the effect of limiting the exposure of a sports league and subsequently limiting revenue growth. Sports leagues will also attempt to generate revenue from alternative sources, such as online streaming platforms that are popular in the United States.
The Sports Administrative Services industry exhibits moderate market share concentration. The Australian Football League (AFL), Australian Rugby League Commission (ARLC), Australian Sports Commission (ASC) and Cricket Australia are the four largest players in the industry. Australian Rules football and Rugby League are the two most popular winter sports in Australia, while cricket dominates the summer sporting landscape. These sports also have the benefit of overseeing world-leading leagues or national teams, unlike sports such as soccer and basketball where Australian competition is at a far lower level than international competitions. For more information, visit IBISWorld’s Sports Administrative Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Operators in the industry are primarily engaged in the administration and/or control of sports or physical recreation organisations. These organisations are responsible for the policies, rules and regulations governing the conduct of an individual sporting or physical recreation discipline.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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