Media Rights Are Set to Surpass the Gate

For the first time in 2018, media rights fees will surpass gate revenues as the leading source of sports revenue in North America. 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.

Media rights fees reached $16.4 billion in 2015 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 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.