The impact of television rights on various sports
One of the biggest business deals at the moment in sports is television rights for various events. Television companies pay huge amounts of money to secure the rights to show the most popular sporting events on their channels. The amounts have been going up every single year and they look all set to continue in that direction. It seems as if more and more people are watching their favourite sports on television instead of going to the stadiums and this is being reflected in the viewing figures of sports these days. Major companies also sometimes share sporting events and split the cost that way. The BBC, ITV, and Sky Sports are the major sports broadcasters in the UK and it looks like they will continue to show the best sporting events out there.
If we look back in history, the television rights to the 1948 London Olympics were sold for a fee of £1500. At that time, this fee was a huge amount of money and it was especially hard for the London Olympics organisers because England was coming out of the hardships of war at that time and was slowly rebuilding itself. Today’s television rights figures go into billions of pounds. In about 60 years, the price has gone up from the thousands to the billions. In 2000, the rights to the Sydney Olympic Games were sold for a gigantic $1.3 billion. The deal that was struck between the NFL in America and a U.S. television outlet was around $17 billion. The NFL is one of the most widely watched sporting events in America and this is reflected in the huge fee price for its television rights.
Television broadcasters use sporting events in order to boost their market position and generate increased revenues for themselves. The big sports events are such that they have the power to pull in a lot of viewers to a television network and the television network in turn can generate revenues from advertisers who want to advertise their products at those moments when a lot of viewers are tuned in. It was recently announced that ITV has secured the rights for the Rugby World Cup for the next two years. This is a huge deal for the company because it means that for the next two years ITV is going to be able to make a lot of money from broadcasting this highly watched event. In 2007, almost 16 million people tuned in to watch the World Cup and viewing figures are set to increase for next year. One can only imagine how expensive the FIFA football World Cup TV rights must have been.
A development in sports rights to television networks was that a list of ‘crown jewel' sporting events was compiled that was to be shown on free to air television networks. These free events were considered important because they had the power to unite the people of UK; events such as the Olympic Games, the FIFA World Cup final and many more. A new proposal was put forward to allow the Ashes to be shown on free to air networks. The sports minister, Hugh Robertson, shot down the proposal by saying that sports organisers had the right to generate revenue from selling the rights to their events. But a condition that may be put on governing bodies of sports is that they spend 30% of their revenue on grassroots development of their sports. At the moment this figure is set at 5% and the odd thing about it is the fact that isn’t the government responsible for developing interest in sports and foster sports development at the grassroots level. As the current government cuts its budgets wildly, this is a way to push the burden of sports development on to someone else.
In the future we will see the fee prices for television rights rising. As sports become more popular and more people watch them, one may see an upward trend in the amounts being paid by television companies. The biggest sporting events in the world will be as popular as they have always been; the football World Cup final, the rugby World Cup final, the Ashes cricket series, the Premier League and many more. Sporting events have the power to bring people together and broadcasters and sports organisers will continue to exploit this to great effect in the years to come.
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