Television: Inflated assets

From France to Mexico, televised sporting events are drawing unprecedented audiences, transforming the fortunes of networks that have sports rights.

In the US, where the economic downturn and growing digital competition were weighing on viewing figures and advertising revenues just a year ago, this drove double-digit growth in networks’ profits in the fourth quarter. “Broadcasting right now . . . is about event television, live television, sports events,” Jeff Zucker, former chief executive of NBC Universal, the US network owner, told the Financial Times digital media conference this month. “That’s what is really attracting . . .the real eyeballs and the real advertising dollars.” Zucker warns that, for networks, sports rights could be growing too costly. Media revenues now account for 35 per cent, or €16bn ($23bn), of a €45bn global sports market that has averaged 6 per cent annual growth since 2005, according to Lagardère, the French media group. “The biggest fear I have is that those new fees [paid by cable and satellite operators to networks] will be taken in and just given to the sports leagues, and that kind of defeats the purpose,” he says. Yet, even as sports boost networks in an increasingly competitive media marketplace, the rising cost of securing rights to broadcast live events is threatening the basic economics of the industry.