The market for premium sports remains relatively healthy in the Asia Pacific region in spite of uneven structural dynamics and the corrosive impact of piracy says research from Media Partners Asia (MPA) which predicts it will grow at 7% CAGR from 2019-24 totaling $7.2 billion.
The report, entitled Asia Pacific Sports Media 2020, tracks the growth trajectory of sports rights and TV and online video sports revenues across 11 markets in Asia Pacific with historical data and projections as well as analysis of key players and sports properties by geography.
MPA found that over the study period, sports TV revenues will remain relatively flat, reaching $4.3 billion by 2024 while sports OTT revenues are set to climb at 22.0% CAGR to reach $2.9 billion. OTT accounted for 21% of sports media revenue generation in 2019 in the 11 Asia Pacific markets. This is likely to almost double over the next five years to reach 40% by 2024. Excluding China, the study predicts that OTT will account for 23% of sports media monetisation in 2024 across the measured markets, up from 12% in 2019.
Yet gaining rights to sports rights is a costly business. Across the 11 Asia Pacific markets rights costs grew 2.4% in 2019 to reach $5.5 billion in aggregate while sports revenues across TV and online video increased 7.8% in 2019 to reach $5.2 billion in total. MPA projections indicate sports rights costs will grow 3.8% CAGR between 2019-24 to reach $6.6 billion by 2024 while sports revenues in TV and online video will grow at a CAGR of 6.7% to reach $7.2 billion by 2024.
Looking at regions, MPA observed that sports rights investments in China, India, Australia, and Japan are driven by a strong domestic sports ecosystem, supported by premium international rights for football, basketball, and baseball. Rights costs in China were driven by a growing appetite for domestic and international football as well as basketball and growth momentum, strong between 2016-19, will stabilize post-2021-22.
China, India, Australia, and Japan will contribute on average around 85% to sports rights fees and sports media revenues over 2019-24. Greater Southeast Asia, including Hong Kong, will average about 15% over the 2019-24 period. In terms of sports revenues across TV and online video, Japan led in 2019 with a 27% contribution; by 2024, China will lead with a 33% contribution.
In 2019, football led the sports rights market across the 11 APAC territories with the Premier League topping the list of individual properties. The Premier League rights value is expected to moderate after 2022, particularly in China. Cricket is growing fast as Indian sports broadcasters continue to pay a premium for the IPL, the ICC and the India international (BCCI) rights. The IPL is the most valued domestic league in APAC currently. Cricket is growing its pie in Australia and New Zealand markets as well. Basketball is growing in demand regionally. Rugby World Cup 2019 drove Rugby’s share.
Cricket continued to drive more 85% of India’s costs while rationalising of pay-TV spends on domestic rights in Australia will likely affect the overall market in the future while domestic baseball and football will drive growth in Japan’s sports rights market. Greater Southeast Asia, including Hong Kong, was found to be dependent on growth in international football and basketball. Local football in markets such as Thailand, Indonesia, and basketball in the Philippines will continue to deliver additional growth.
In making its calculations MPA noted that sports rights costs and revenues were seasonal and lumpy. Major global events typically occur every 2-4 years and can either inflate or adversely impact sports economics on a year on year basis and that global sporting events in 2020 such as the Tokyo 2020 Olympics and UEFA Euro 2020 would be key drivers of value in Asia Pacific markets but were subject to risk given the global spread of the coronavirus.
A number of themes are emerging across the region said MPA executive director Vivek Couto.
“Investment in premium sports rights is often proving scalable and sustainable, when driven by: (1) large scale internet players with pole position in a vast digital ecosystem, which helps subsidies investment in premium content (i.e. Tencent in China) or integrated pure-play entertainment and sports OTTs with AVOD and SVOD business models (i.e. Hotstar in India and iQiyi in China),” he said.
“[Secondly] pay-TV operators investing to retain high-ARPU customers and grow a new OTT segment, anchored to product innovation with premium sports at the forefront (i.e. Foxtel, Sky Network TV, Astro and PCCW’s Now TV); and [third] local and regional TV broadcasters that have a combination of mass reach and premium segmentation with branded sports networks (i.e. Star and Sony in India; select free TV players in Southeast Asia and regional pay network beIN Sports).”