A Cost Perspective on Televised Sport. “The Optimal Economic Utilisation of Sport’s Media Rights"

Abstract

Sport media rights have most commonly been sold to television companies that themselves have produced the sport programmes. Usually all games from a league or an association were sold in one bundle to one buyer, for example the state monopolist or a commercial broadcaster with monopoly power in that market. At the same time, production was an expensive and complicated process requiring investment that could only be undertaken by the broadcasting companies. As the value of the rights were suppressed by the lack of competition the among broadcasters, there was quite simply not economic motivation for the rights holders either to differentiate their product, and even less to get involved in the production process. Today we see a very different television landscape, which in turn has altered its importance to the rights holders, i.e. the football leagues and associations. While the value of the rights have risen drastically, additional revenue has also grown as the increased media exposure has led to greater sponsor and advertising revenue. With several different broadcasting technologies and the exploitation of media exposure to attract sponsors, the factors needed to be taken into consideration in productions have become more complex. Hence, the production process itself has become a matter of dispute in certain markets. There has been disapproval of the quality of production from the football associations as well as complaints about having to show too many unattractive games from broadcasters. This essay is an attempt to discuss how different aspects of cost in programme production affects the television channels’ motivation for showing programmes, and how the holders, in this case the football association, can sell the rights in different manners.