Fantasy Becomes Reality: Media Rights About To Surpass Gate Receipts for Sporting Events

Fantasy becomes reality: for the first time in human history, media rights for sporting events are about to surpass gate receipts - eg, the box office - in financial value. Continuing the trend of information about our lives being more valuable than our lives...JL

Matthew Futterman reports in the Wall Street Journal:

An industry once built on ticket sales will empirically become about eyeballs watching the action on television or a mobile device, as leagues and sports federations collect $19.9 billion from media rights fees compared with $19.7 billion from gate revenues.
The old adage that the sports business is really the TV business will finally come to fruition in 2018, according to a new report from PriceWaterhouse Coopers.
Sports executives have long focused on media rights as the industry’s main driver of growth for the $64 billion spectator sports industry in North America. For the first time in 2018, media rights fees will surpass gate revenues as the leading source of revenue. An industry once built on ticket sales will empirically become about eyeballs watching the action on television or a mobile device, as leagues and sports federations collect $19.9 billion from media rights fees compared with $19.7 billion from gate revenues.
“It’s a trend we have been highlighting,” said Adam Jones, director of PwC’s Sports Advisory Services Unit. “The gap has been closing as the new rights deals come into effect.”
Media rights fees reached $16.4 billion this year and are expected to grow at a compound annual rate of 7.2% during the next five years. The market for the media rights has skyrocketed in recent years as media companies vie for programming that is largely DVR-proof and has, in the past, driven consumers to buy pay-television subscriptions, propping up that industry.
However, Jones said, whether that growth will continue in an environment where younger consumers appear willing to live without programming they can’t stream without a subscription, known as “over-the-top,” remains unclear. In other words, will sports right be as valuable if they can’t make pay television more valuable.

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“Will you see premium applied if there isn’t a model that needs to be propped up?” Jones said. “If that value proposition and premium no longer in play are the fundamentals of content strong enough?”