Published: July 14, 2004 in Knowledge@Wharton Televising professional and college sports games is no longer a profitable slam-dunk as the value of broadcast rights have soared and the sports media field has become crowded with new channels and networks, such as Yes and College Sports Television. Professional sports leagues themselves, such as Major League Baseball, want to generate new revenues for team owners through web sites, 24-hour cable channels and marketing deals that could dilute sports franchises for broadcasters.

 

The heyday of easy money and fast growth is over, according to a recent discussion among three sports-business professionals at Wharton moderated by Robert DiGisi, who lectures at Wharton on “Marketing in the Entertainment and Sports Industry,” and who owns Iron Horse Marketing. “The growth rate is certainly going to slow,” DiGisi says in an interview, noting that some of the fundamentals that led to an economic boom for the sports business in the 1990s have probably changed for good. For example, the Fox Network spent billions of dollars to secure rights to professional football in the early 1990s as it was establishing itself as the fourth broadcast network. “You could argue that sports built the Fox network,” DiGisi suggests. But now that Fox is firmly established with CBS, NBC and ABC, it may no longer feel the same pressure. NBC, for its part, has signaled its unwillingness to pay the high price of broadcast rights for professional games and has focused its efforts on the Olympics.

 

Indeed, some new opportunities exist. The popularity of Smarty Jones, a Philadelphia horse that received a barrage of media attention last month when it was favored to win the Triple Crown (it didn’t), shows that the public has an appetite for sports drama and a good story. Luck and a strong competitor can pull a sport such as thoroughbred racing, which has been in decline for 10 to 15 years, back into the public consciousness.
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