Study: 4.6-per-cent media-rights growth to drive North American sports market

Professional services group PwC has released its annual Sports Outlook report, which forecasts that the North American sports market will grow at a compound annual rate of 3.2 per cent, from $71.1bn (€64.2bn) in 2018 to $83.1bn in 2023.

The report analyses four sectors: gate revenues, media rights, sponsorship and merchandising. PwC also assesses the potential impact sports betting will have in North America in the coming years.

Media rights are predicted to lead industry growth for the period assessed, with PwC forecasting that the value of the sector will increase from $20.9bn this year to $25.3bn in 2023.

The compound annual growth rate of media-rights revenue for the assessed period is 4.6 per cent – comfortably the highest rate out of the four sectors analysed. PwC forecasts that media-rights revenue will enjoy 3.8-per-cent growth in both 2019 and 2020, and then rise by 4.1 per cent in 2021. A significant increase of 5.6 per cent is then expected in 2022 before a 5.9 per cent increase is forecast in 2023.

Media rights officially became the industry’s largest segment in 2017 and its importance to the overall North American sports market is only expected to increase in the coming years. During the five-year forecast period assessed by PwC, national media deals are up for renewal at four of North America’s five major leagues: Major League Baseball, Major League Soccer, the NFL and the NHL.

Sponsorship revenue is predicted to grow from $17.9bn to $20.6bn and PwC predicts that the continued proliferation of sports betting agreements may even result in sponsorship revenues eclipsing those of gate receipts by the late 2020s.

Sponsorship revenues in North American sports have experienced steady growth since 2014, when the figure amounted to $14.7bn. The sector’s compound annual growth rate of 3.8 per cent from 2018 to 2023 is slightly higher than the overall rate of 3.2 per cent.

Sponsorship revenue is expected to rise by 4.1 per cent in 2019, with an increase of 5.7 per cent forecast for 2020. In 2021, sponsorship revenue is only expected to increase by 2.9 per cent, with this figure rising to 3.5 per cent in 2022 before dropping back down to 2.6 per cent in 2023.

Gate revenues are not expected to experience a sharp increase, rising from $19.6bn in 2019 to $21.8bn in 2023, although PwC notes that the continued expansion of the NHL ice hockey league and MLS will contribute towards growth in this sector.

MLS will add two new teams next year in Miami and Nashville, with further franchises set to launch in Austin, St. Louis and Sacramento during the period assessed by PwC. The NHL will add one new team in Seattle in 2021.

Merchandising revenues are not expected to rise significantly, with PwC predicting a growth from $14.7bn in 2019 to $15.4bn in 2023.