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Broadcasting Has BeCome One of the Major Revenue Sources for Sports. Discuss the Implications Broadcasting Has Had on the Sport Industry

Essay by   •  November 29, 2017  •  Research Paper  •  2,941 Words (12 Pages)  •  1,078 Views

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Broadcasting has become one of the major revenue sources for sports. Discuss the implications broadcasting has had on the sport industry.

Introduction

Sport is significant to media and broadcasting and now highly depends on the role of media and broadcasting (Crisell, 2006). More over this is why sport is much more likely to to attract communal viewing at home or at bars (Whannel 1992). This shows the importance on broadcasting and in the assessment it will focus on the implications and benefits of broadcasting. Looking at the demand for broadcasting, sport media and money and broadcasting revenue. Also the difference in broadcasting in different sport leagues and how this has affected the team. Further more how this affects the competitive balance of the teams when looking at the peculiar economics for demand for the product therefore meaning no team dominates and gains too much power through broadcasting (Gratton 2000).  Broadcasting relies on the inverted joint product as 2 teams have to come together to produce a product which can then be broadcasted further to gain revenue (Neale 1964).

Sport media and money

Sport media and money looks at many factors. As it makes sport more accessible (Williams, 1974). Which makes there be pros and cons towards broadcasting. As the costs of sports media rights increase, so do the subscription fees of television subscribers (Peles, 2014). This shows the impact of sport media and money. Sport media have ranged into wider sports and ratings have been up in 2009 and early 2010 (Master 2009). Also the average American spends 35 hours a week watching television (Nielsen, 2010).  This shows how important sport media is and why the costs are always rising.  This is why sport media has had a sudden influx and how it has helped broadcasting in general. These changes to sport media have changed many different factors such as timetabling, commercials and new sports. Also due to The greater mobility and functionality of fourth generation digital hand-held devices already allow consumption of most of these services (Dauncey and Hare, 2013).

Looking at technology and the changes it has made to sport has been majorly impactful. Delivery on sports media is beyond one channel and this means new platforms which allows supporters to build their own communities (Hutchings, Rowe, & Ruddock 2009). This allows blogs and social media to be highly impactful. There have been many changes to sport because of broadcasting such as the commercialization and mediatisation of the Olympics, world cup and the NFL (Guttman 2002 et al). This is why followers cherish the sport due to the opportunities and media experiences that branding has now gave to sport (Hutchins and Rowe, 2012).

Another example of this where sport media and money has helped is where the increased in media coverage of elite women’s sport especially within the 2012 and 2016 Olympics which has in turn equalised the prize money in tennis, increased participation and increased professionalism (Sport England [SE], 2016a). This shows what sport media and broadcasting is doing and effect they have had. However other research showers the coverage of sports is seriously lacking when considering women’s sports, which tends to receive limited media coverage (Schmidt, 2016). This shows how much power broadcasting and the media have on sports and coverage of them which can affect them massively.

TV Coverage

TV coverage has been seen as a positive impact by some but has also been seen as a threat. TV coverage is followed due to seeing your favourite time and following players. An average of 111,041,000 views on the super bowl 2011which was a rating of 46.0 on CBS which means just a short of half of television homes of the nation were watching (Deninger, 2012).  This shows how influential TV coverage is and how many people follow big events. Attendance at sporting events are growing and media coverage is also being increased further (U.S. Census Bureau 1993). This shows there are two sides where it TV coverage can help attendance but it can also hinder attendance.

(Chester 1983) that broadcasting increased in ground revenue but it can reduce attendance at lower level games. Also Wisemen 1977 argues that highlights would raise expectations and hence reduce attendance. However larger clubs would benefit regardless as due to popularity and demand and this would meet their audience as they can sell the tickets and meeting their further target market. This shows that smaller level teams will struggle due to broadcasting which will in hence affect their attendance (Cameron and Dawson, 1995). TV coverage allows fans to follow their favourite team regardless of what country they are from and through many different sources (Arnett and Laverie, 2000). Therefore, to most people it has been seen as a positive to the game. Due to the demand of the sport getting higher which has allowed TV coverage and broadcasting be what it is today (Baimbridge, Cameron and Dawson, 1995). This has also affected the competitive balance of the teams.

For example, the NFL have tackles this through the NFL blackout policy. Which states that forbids television broadcasts of games that are not sold out at least 72 hours prior. This is to stop the reduction in game attendances.  There is evidence where it has worked where only 6 percent of the games did not sell out therefore got blacked out (Robert Baade, 2011). However, most researches found the blackout a missed opportunity on broadcasting and extra revenue. They look at Attendance = game day + season – no shows as it is other factors that affect attendance such as uncertainty, weather etc, (Putsis and Sen, 2000). This shows broadcasting and TV coverage can only help the clubs. The UK league have done this for 3pm kick offs on Saturdays which allows both parties to prosper.

Demand for sport

The demand for sporting rights are ever increasing with the fees for the also increasing. This is what has been boosting sports and football specially. Up to the 1980s gate receipts were the main revenue but now has been take over by broadcasting rights sales (Andreff and Staudohar, 2000). Broadcasting rights have increased from millions and now 2.2billion 2010-2012.  (Deloitte 2004) reports that sponsorship revenue accounts for 15 to 30% of total league revenue for European leagues this is because sponsors preferences depend on the broadcasting contracts. This shows how important broadcasting is for teams as it has affects on other areas.

Looking at TV rights and competitive balance, the premier league is now 2.8bn and the highest earning club earns near 90m whilst the bottom can be towards 60m. whilst in the Spanish league the top team earns around 120 million and lowest towards 20 million (football TV rights, 2016). This shows beneficial broadcasting is but also how it affects the competitive balance between the teams as you can only get the top players if you earn the most.  Rob Wilson an economist says more money will lead to better players, higher wages, and more exposure. This shows that broadcasting and TV rights are highly influential on success. Which is different to the NFL where the smaller clubs have more of an advantage due to the draft.

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