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  2. Introduction • Various countries are mentioned throughout the case, with a specific focus on America, United Kingdom and Australia • Covers the development of paid broadcasting rights of televised sports from 1948 • The impact that sports popularity and immediacy have on the advertising industry • The interaction of professional athletics association and global communication companies
  3. Introduction(Cont)... • The complexity of the relationship between broadcasters, content providers and advertisers including BBC, NBC, ESPN, FOX and others… • The positive and negative effects of that the money involved in the industry has on sports, broadcasting rights and advertisements • Recent change and initiatives that may impact on the future of televised sport and advertising
  4. Key statistics • In 1948, the BBC paid £15,000 (£27,000 in today's money) for the right to telecast the Olympic Games • In contrast, the rights to the 1996 Summer Olympics in Atlanta raised $900 million • In addition, the NBC network paid $3.6 billion to acquire the American television rights to the Olympics • The average number of Americans watching the Super Bowl was 94 million, according to Nielsen Media Research. • The top eight television programs in America are all sporting events.
  5. Key statistics (Cont…) • It is estimated that American television firms spend around $20 billion annually on sports rights • The money that television has brought into professional sport has put some of the top players among the world’s highest-paid entertainers • A study in South Korea by Spectrum, found that live games get 30 percent of the audience while recordings get less than 5 percent.
  6. Sports Takes Over The Television Broadcast • Relation between sports and television is more popular and immediacy. • Stephen Wenn, of Canada, put money and the television had a more enormous impact on the Olympic games including their time and location. • For Instance: Asian Olympic picture poses a problem for the American network, Viewers learn the result on the morning news.
  7. a) The money that television has brought into professional basketball has put some of the top players among the world’s highest paid entertainers. b) Rugby has begun to be reorganized to make it more television-friendly.. c) American football draw the largest audiences, television has also promoted the popularity of sports that stir more local passions: rugby league in Australia, cricket in India, table tennis in China, snooker in Britain. d) What is less often realized is that sport is also changing television. To assuage the hunger for sports, new channels are being launched at a tremendous pace. e) In America, ESPN, a cable network owned by Capital Cities/ABC, started a 24- hour sports news network in 1997; in Britain, BskyB channel.
  8. a) In particular, sport suggests an answer to one of the big problems that will face television companies in the future. b) How can viewers, comfortable with their old analog sets c) Create an exclusive chance to watch a desirable event, or to use the hundreds of channels that digital television provides to offer more variety of sports coverage than analog television can offer. d) points out Richard Burton, a sports marketing specialist. In the next few years, the main new outlet for sports programs will be digital television.
  9. Business of Broadcasting • In America, sports accounts for around 15 percent of all television program spending, for some, it’s much larger. • Amount a channel willing to pay for broadcasting • In America, $20 billion is spent on sports rights per year. • One of the biggest sporting coups in the USA was purchased by FOX the right to a year of national football league right for about $4 billion. • Rights for Baseball, Basketball, and Iced Hockey are also in the $1 billion range.
  10. Business of Brodcasting(Cont.) • Kirch Media Group struck a deal to broadcast the 2002 and 2006 soccer world cup finals. • $2.2 billion for the right of broadcasting the soccer finals outside America. • Consumer surplus. • The viewers are willing to pay more. • Subscription Television and pay TV • Viewers are charged for each event, the television company will directly collect the value viewers put into being able to watch.
  11. Popular Events Remained free • First Reason • Those who own the rights to sporting events are rarely just profit maximizers. They also have an interest in keeping the appeal of their sport as broad as possible. They may therefore refuse to sell to the highest bidder. • Second Reason • The economics of televising sports means that the biggest revenues are not necessarily earned by tying up exclusive rights.
  12. Giants and Profit  Overall sports contribute 10% of all television ad income in America  The national networks are by far the biggest buyers of sports rights in the United States.  Major sports rights are held by NBC alone than by any other organization in television history.  Networks are currently asking and receiving about $3M for a 30-second spot during the Super Bowl.  The biggest growth in revenues from showing sports will increasingly come from subscriptions or pay-per-view arrangements.
  13. Giants and Profit (Cont.)  In America, DirectTV and Primestar, two digital satellite broadcasters, have been tempting subscribers with packages of sporting events from distant parts of the country. "  In Germany, DF1, a satellite company jointly owned by Kirch and BSkyB, has the rights to show Formula One racing.  In Italy, Telepiu, which launched digital satellite television in 1997, offers viewers a package in September that allows them to buy a season ticket to live matches played by one or more teams in the top Italian soccer leagues.  Most skillful of all at using sports rights to generate subscription revenue is BSkyB. It signed an exclusive contract with the English Premier League that has been the foundation of its success which remarked £5 billion profit of the business’s capital value of £8 billion.
  14. Comparison of Sports With Hollywood • Huge profit coming from broadcast is consumed by players not by clubs or the bodies just like Hollywood actors. • Market for sportsmen is well developed and cost of players is rising. • But in movies, they have per-subscriber deals but in sports they don’t.
  15. Future of Sports • Now Sports Clubs and Leagues will deal directly with Cable and Satellites, and setup their own pay-television systems. • British Soccer People are trying to build a sports market like American Local Sports Networks (Ex. Madison Square Cable Network).
  16. WINNER TAKE ALL • The cost in televising a championship game or an ordinary game is quite similar but size of audience and revenue generated change the entire game. • That’s why, top players will earn vastly more than those slightly less good, who play to smaller crowds.
  17. The Referee’s Whistle • Money is the key player which alters sports. • The Rubgy League which was played in summer was switched to winter as the broadcaster won the contract for 87 million. • Having a huge sum of money, want to create a rugby super league allowing the best teams to play against eachother. • Even creating a European soccer league was possible.
  18. Exclusive Pay-Television • The big sporting bodies have generally held out against selling exclusive pay-television rights • Regulators have helped them, intervening in some countries to limit exclusive deals with pay-television groups. • Some Countries passed a law to stop subscription channels tying up exclusive rights to some big events, such as the Wimbledon tennis championship.
  19. Monopoly • The real monopolists are not the media companies, however, but the teams. • But most countries have only one national soccer league, and a public that loves soccer above all other sports and it differs from country. • The players and clubs hold most of the cards as television company depend on them.

Hinweis der Redaktion

  1. By the 90s the channels that were broadcasting sports events were thriving and they could clearly see the return on investment on the right to broadcasting sports events. they could also see that this is not the maximum result in this endeavor. So they started to look into more methods to gain more profit. Also when the giants in the business start to gain more profit new channels stepped into the market and competition began for the right to broadcast. As a result of that the bidding wars for the right to broadcast became more fierce.
  2. $2.2 billion for the right of broadcasting the soccer finals outside America. (Six times greater than the amount paid in 1990,1994,1998)
  3. And this made the consumers worry that their favorite sports show or event might only be available on subscription television, especially in Europe. In practice these were seems unnecessary although there were more sports events on subscription television especially outside America’s vast advertising market, the most popular events are remaining freely available and will be for many years to come, and there are two reasons for this.
  4. First, Those who own the rights to sporting events are rarely just profit maximizers. They also have an interest in keeping the appeal of their sport as broad as possible. Second, The economics of televising sports means that the biggest revenues are not necessarily earned by tying up exclusive rights. They can profit from advertising. Television maximizes the audience and advertisers were willing to pay a huge premium to get their brand out in the field because sports gathered the world's most desirable audience an advertisers' point of view young men with cash and sporting events draw the highest concentration in this category.