The industry’s growth now mostly involves extracting billions from television networks and advertising. Ticket sales and merchandising growth are slowing.
Kim Kyung Hoon / Reuters
The future of the sports business isn't getting fans into seats, but broadcasters to the table.
According to a report from PwC, revenue from media rights and sponsorships, which are currently $25 billion of the North American sports industry's $53.5 billion total revenue, will grow to just over half of the $67.7 billion total revenue pie by 2017.
Ticket sales and merchandising will make up the other half and will grow at a much slower rate, 3.9% and 1.6%, respectively. Media rights and sponsorships, on the other hand, will advance 7.7% and 6% a year, respectively.
PwC
Ticket sales simply can't go all that much higher, PwC said, even as the economy recovers from a recession that curbed most ticket price increases.
"Price increases beyond 2014 should largely remain nominal in established markets due to increased sensitivity to the value received by ticket buyers," PwC estimates, partially due to the increased quality of the at-home viewing experience. So NBC, CBS, and Fox, which pay a combined $3 billion a year just for NFL games, are actually getting the viewers to go along with it. Thanks, Cleatus.
The only hope teams have for getting more people to pay more will be "value-add amenities and benefits to create additional exclusivity and further differentiate the in-person fan experience." This means more areas of the stadium or arena that only some ticket buyers can go into, Texas-sized video screens, in-stadium Wi-Fi, and "party plazas/decks."