Sports execs had better pray that pay TV’s programming bundles stay intact. Rights payments from television networks and other media will grow 37.8% from 2013 to $17.1B in 2017, according to a study out today from PwC. That makes it the fastest growing source of revenues ahead of gate receipts (+10.9% to $19.1B), sponsorship deals (+25.7% to $17.7B) and merchandising (+4.6% to $13.8B), The cash cow could dry up if sports channels move to special tiers, reducing the subsidy they receive from pay TV subscribers who don’t watch. For now, though, teams recognize that sports broadcasts win solid ratings, and — since they’re usually watched live — appeal to advertisers. That’s important because teams can’t expect much growth from ticket sales, their biggest source of revenues. Popular teams already are packing their stadiums, but over the last decade rising ticket charges have “created price pressure on certain buyer segments,” the report says. The business is no longer considered recession-proof; many pro and college teams reduced or froze prices after the 2008 downturn, and are just now beginning to raise them. In some cases the higher prices are tied to changes designed to enhance the fan experience including installation of WiFi systems, large video boards, and venues within the stadium for parties. Meanwhile, “major league expansion is unlikely, with the exception of [Major League Soccer].” And licensed merchandise “is viewed as a fairly mature segment, with its rate of growth tied closely to the outlook for consumer discretionary income.”
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