Apr 302012

One of the great successes of the Twentieth Century was professional sport.

As television – first free to air TV then subscription pay networks – developed through the 1960s to 90s, the owners and executives found professional sport delivered viewers and advertisers.

Having a sports portfolio was essential for a successful TV network, the leagues knew this and rights fees ratcheted up with every new contract.

The process reached its peak in the 1990s as Rupert Murdoch built his pay TV empires in North America, Europe and Australia.

During the 1980s and 90s we saw News Corporation buy up rights across the world, even founding new competitions like Premier League Soccer in the UK, Super Rugby League in Australia and the UK along with the multinational Super Rugby that allowed Rugby Union to become an openly professional sport.

Any organisation that finds itself sitting on a cash mountain sees its costs accelerate and the sports organisations are no different. The cost of fielding of professional sports teams has soared with huge player salaries supported by armies of assistant coaches, middle managers and specialist assistants.

Broadcasting rights were supplemented by corporate hospitality and sponsorship arrangements, all of which increased exponentially over the last thirty years.

The big problem for professional sport sector is all of these revenue streams are affected by the deleveraging economy. Even more concerning for them is the precarious financial position of many of the media companies who bidded rights up during the 1990s.

News Corporation’s mission of dominating TV markets by buying up sport rights is largely accomplished and the empire is fading along with its founder.

When Rupert Murdoch goes, so too will the world’s biggest driver of sports broadcasting rights. There doesn’t seem to many other broadcasters with the ability to pay the extravagant bills of professional sports teams.

There’s no doubt broadcast rights for sports will remain lucrative, albeit no longer growing, so clubs and competitions with business plans based on big increases of rights payments are going to struggle.

As a consequence, sports organisations are going to become more aggressive in finding revenue streams and we can expect to see them bullying photographers, monstering people uploading clips to YouTube and ejecting those with the temerity to bring their own sandwiches into the few cheap seats remaining.

The problem for sports is their value lies in their engagement with mass culture. If they isolate themselves from the people and society then they’ll find themselves becoming irrelevant.

Like many of the media companies that are now struggling.

Despite the pleas of sports administrators and their tame journalist friends, this doesn’t mean junior sport or the codes themselves will die. Grass roots sport will survive without a layer of obscenely paid professional players and managers suffocating the games.

As business rules are re-written in the 21st Century, all industries are going to have to adapt. Professional sport is no different.