Sports Media: The billion dollar industry

These past few years we have seen a number of massive new Media deals that promise to change the landscape of media deal negotiations for years to come. The MLS negotiated their biggest media deal ever with ESPN, Fox Sports and Spanish broadcaster Univision. ESPN also signed a deal with the NBA that promises to change the way we consume its product. The MLB also reached a deal that is worth $12.4 billion, a 100% increase from their last media deals. The amount of dollars thrown into the sports and media industry is at an all time high and it is showing no signs of slowing down. With sports league renewing their media deals and the growth of technology are factors that influence the ever-rising price for sports content.

The advances in technology have brought forward the demand for content on mobile devices. Verizon has capitalized on this demand by becoming the exclusive mobile of the NFL. Verizon paid $1 billion to expand their coverage of games, a 40% increase from their last deal. This deal highlights Verizon’s understanding of the value of their partnership. ESPN and the NBA have also capitalized on the streaming craze brought upon by technology. The NBA now allows ESPN to stream games online and on mobile devices. The NBA becomes the first of the big sports leagues to enter a comprehensive deal that allows for full streaming of all games.

In closing, the downside to this trend is that the consumer may end up paying more on their cable bills. Sports channels carry the largest fees on your cable bill and will likely continue to go up. Technology has had profound effect in the way media deals are negotiated. Distribution channels in today’s world go far beyond the television, radio and other forms of traditional media. The landscape of sports broadcast is changing because of the way sports fans are consuming this content.

Sports marketing in college.

They are many factors that influence the sports marketing industry. The amount of dollars invested in sports marketing campaign is higher than it has ever been. More and more sponsors continue to line up with sports organizations in order to increase brand awareness. Media deals worth billions are now the standard when it comes to acquiring television, radio and digital rights. In college football, athletic departments are recruiting sponsors of all kind. Florida State and the University of Florida have partner with Winn-Dixie, a marketing trend that is increasing in college sports.

Marketing agencies have venture into the complexity of college sports and have seen success there. IMG created IMG College in 2007. IMG College handles the marketing and broadcast rights from over 90 schools that have outsourced these functions to marketing firms in the sports industry. IMG College has generated over $500 million in revenue to its clients. The problem with this is that college sports are associated with amateurism and sometimes the image of a school might blur the lines of what is acceptable and what is not. We can look at the lawsuit against the NCAA and EA Sports brought by players that claim their image and likeliness was used without permission or compensation as an example of some of the limitations the college sports industry may present.

In contrast, the college sports industry provides a growing market with promises of loyal fan bases. The increase in official sponsors in college sports is a revenue opportunity for both, the school and their sponsor. Sports marketing agencies designated to handle these marketing functions must appropriately do so without hurting the image or the brand of their clients. There is no denying that the partnerships with these sports marketing agencies and schools has been beneficial for both sides, it has provided stability, consistency and growth to their revenue.