Who pays an athlete's million-dollar contract? No surprise broadcast rights play a big part. Let's dig into the biggest deals in sports.
MoneyballBless Gary Neville. As the football world recovers from 48hours of turmoil, let us understand how US$550m can be promised to clubs seemingly out of nowhere. Where does all this money come from?
No prizes for knowing its broadcasting rights. The biggest sports leagues in the world derive the majority of their revenue from broadcasting deals. TV networks bid for the rights to a sports series and recoup the outlay through ads and/or subscriptions.
The NFL reigns supreme in broadcasting revenue. Last year they generated US$5.9b in broadcast revenue, a figure that will grow past US$10b by 2023. Just last year, CBS generated US$525m in revenue from Super Bowl ads. They paid approximately US$1.1b to broadcast games throughout the whole season, including a Super Bowl.
6 of the top 10 codes by broadcast revenue involve the Beautiful Game. The English, Spanish, German, Italian and French leagues all generate over US$1b annually.
Manchester United (MANU) is listed on Stake. The stock rose 10% on Monday after the Super League was announced before falling 9% from its peak as the league was annulled. In 2020, the club made US$173m from broadcasting and US$635m in total revenue, down from US$306m and US$800 the year prior.
It’s an incredible loop. National icons, childhood heroes, and billions in revenue all made possible by 30-second promos for companies from Coca-Cola to local lawn mowing services. People devote their lives to an athletic pursuit, and it’s made possible by someone, somewhere, buying soft drinks… in a very simplified form.