Sport May ‘Form The Bedrock’ Of Media Companies’ Long Term Strategy, Says PWC Report

In their recent report Game On: Sports Investment For European Media Companies, PricewaterhouseCoopers reveals the importance of professional sport to large European media companies and suggest means of exploiting revenue streams and other commercial opportunities from popular European spectator sports. Sport, says PWC, is not a passing fad and its popularity will not diminish making media involvement in sports content, information and interactivity a must for the long term success of media companies.
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 |