Links between professional sports and the media are now deeper and more complex than ever and nowhere is this relationship stronger than in the US. PWC believes that European media companies have much to learn from the American model, not least of all in terms of creating broader entertainment output around a sport. Where once the media’s interest ended at obtaining the rights to broadcast sports now companies are seeking to increase their involvement to the extent of owning the teams and events themselves.
Exploitation of the sports market by media owners has been allowed to happen largely due to the lack of experience by sports governing bodies in the commercial arena. More used to dealing with promotion and regulation, they are now having to evolve into arbiters of financial and rights issues. PWC points to the recent decision to separate the commercial and regulatory bodies of Formula 1 as an example of the development of this role.
Large, multi-platform companies with local output will triumph when it comes to sports broadcasting when one considers the wide variety of sports currently broadcast across Europe and the penetration of different media types currently conveying these events. PWC cites localised content as being the key factor in successful and lucrative sports broadcasting.
The future of media involvement in sports will see more media companies annexing teams, events, stadia and even leagues and playing a more involved role in the commercial decision making of these operations. Although this will alleviate the pressure on the governing bodies who may be ill-equipped to deal with such matter, it will also put a considerable amount of power into the hands of what must be considered purely commercial operators.
| Examples of media investment in UK sport |
| Company |
Club |
Date of transaction |
Holding acquired |
Value of shareholding |
Notes |
| BSkyB |
Chelsea |
Apr-00 |
9.90% |
£40m |
Includes deal to develop Chelsea’s internet portal |
| Leeds United |
Aug-99 |
9.10% |
£9.2m |
+£4.6m fee to become an agent |
| Manchester City |
Nov-99 |
9.90% |
£5.5m |
|
| Manchester United |
Jun-99 |
9.90% |
£67m |
Forced to reduce stake from 11.1% |
| Sunderland |
Dec-99 |
6.50% |
£4.65m |
+£1.85m if Sunderland remain in the Premiership |
| NTL |
Aston Villa |
Jan-00 |
9.90% |
|
Aston Villa will receive £26m interest-free loan |
| ENIC |
Glasgow Rangers |
1997 |
25.10% |
£40m |
|
| Source: Screen Digest, Sports Business International, PWC analysis |
