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Sports: Gold Rush bandwagon for organizers, sponsors, broadcasters, advertisers, merchandising.

Sports on television has become a huge business which promises to grow even bigger in the years to come as new electronic wrinkles, like pay-per-view, reach higher levels of perfection.

Television has become such an integral part of sports, and so important is its financial structure, that many major events, including the Olympics, and especially car racing, have become virtually unthinkable without it.

It's very much wheels-within-wheels. The networks around the world spend fortunes on the rights to events that promise international appeal. Even if they lose money, they still gain via a boost in the ratings. For example, NBC and the pay-per-view triplecast are expected to take a loss of close to $100 million due to their ambitious coverage of the Summer Olympics in Barcelona.

However, sporting events collect from both broadcasters and international sponsors, and they have become dependent on that vast income as well.

It's not a one-way street. While TV fees rise, so do the salaries for the performing stars in the sporting world and the incentives and prizes handed out to winners. Television rights for major sporting events are beginning to hit the stratosphere, because the explosion of private channels, cable and satellite has intensified the competition.

Sports make very attractive programming. They fill up time and, ultimately, when compared to other TV productions, they are very economical. In the U.S., sports coverage is growing steadily, and it is seen becoming ever more important as cable and satellites intensify its role. In Europe, the same process is under way. The latest estimate reveals that, whereas in 1988 European television devoted some 27,000 hours to sports, in 1991 that total rose to around 47,000 hours, with sports channels gaining ever increasing importance.

The two most important sports channels-- Eurosport and TESN -- come out of France, but BSkyB in Britain is also heavily into sports. A new sports channel will originate next year in Germany, and others will undoubtedly follow. All the European networks tend to give primetime attention to their public's favorite sports, particularly soccer.

During the past two years, American imports such as basketball, baseball and American football have intensified local interests in these sports and, again, prices for them have steadily arisen.

A good example is soccer. Just a few years ago, the European Cup soccer rights brought as little as $6 million from the European Broadcasting Union. The new 1992-95 contract was negotiated at $91 million. In Germany, ARD paid a small fortune for the German First League games, having to buy the rights indirectly from one of the companies controlled by Leo Kirch.

In Britain, a few years back, the English soccer league sold TV rights for a miserly $9 million a year. For 1991-92, ITV got hold of those rights for $20 million, shutting out the BBC. Later the BBC turned the tables by paying $110 million a year (with Rupert Murdoch's BSkyB) for rights to games of the newly-1ormed Premier League.

In the U.S., the NBA, representing the basketball sport in the past, got $9 million a year from TV. Today, this has risen to $219 million. The National Football League negotiated a rich $3.6 billion for four years' rights with television, most of the money coming from the networks.

Observers are beginning to wonder about these escalating fees, and the sports promoters' dependence on them. They are also quite aware of the pay-per-view gamble, which NBC certainly lost at the Barcelona Games and may or may not repeat when it comes to the 1996 Summer Olympics in Atlanta where the vast Georgia Dome will be the venue for some of the events. The overall costs for the 1996 Olympics are said to run to $500 million.

The total amount reportedly paid to the Olympics Committee this year (from all television sources) was said to be $635 million, with the U.S. alone contributing $401 million to the kitty. By comparison, total license fees for the FIFA Soccer World Cup (in 1994) are said to reach only $90 million, with the U.S. paying $12 million and the rest of the
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Publication:Video Age International
Date:Sep 1, 1992
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