American sports leagues have been at the center of the globalization movement. The NFL has expanded its London series and will play a game in Mexico City this Monday night. MLB has started its season in Japan. The NHL has opened their regular season in Europe and the NBA has played games all over the globe. Even college football has gotten in on the act with the Pac 12 striking a TV deal in Australia and playing a game at the SCG.
Why?
Here’s why.
The just under 7 billion people that don’t live in America represent untapped revenue potential for these sports leagues. And if these leagues can grow in popularity in new countries, they can receive more money for their broadcasts.
The latest example is the English Premier League in China.
Via the AP, the EPL has struck a deal with PPTV, an online video streaming service, on a three-year contract worth a whopping $700 million dollars. That’s an extra $233 million the league will make each year just from streaming games in China. And it’s an incredible ten time increase on their current deal there.
The English Premier League has sold its television rights in China for $700 million in its biggest-ever overseas sale, a person familiar with the deal said on Thursday.
Online video streaming service PPTV sealed a three-year deal to broadcast all 380 matches each season across China from 2019-20, the person told The Associated Press.
The person spoke on condition of anonymity because details of the negotiations are confidential with PPTV, a media division of China’s Suning retail group which also owns Italian club Inter Milan.
PPTV’s 2019-2022 deal is worth more than 10 times the current contract with Super Sports Media Group, which is paying around $20 million a season. PPTV also has the live rights for games from Spain’s La Liga in China.
To put the scope of this deal in perspective, it’s worth more per year than NBC is paying the EPL for its television rights deal stateside through 2022. It stands to reason that if you can be popular in a country that contains 20% of the world’s population, you stand to make a lot of money. No wonder Rog Goodell wants to play a regular season game there.
The new EPL deal is reminiscent of the deal the NBA recently struck in China with TenCent. That deal also worth $700 million dollars, and again centered on streaming rights.
Even though ratings might be down for sports across the board, and the EPL has seen its own struggles on Sky Sports this season in the UK, their value is still growing worldwide. And when it comes to new broadcasts in new markets around the world, it represents a potential source of revenue that is beyond anyone’s comprehension.
So in twenty years when the NFL and the NBA have European divisions or plays an entire week’s worth of games in China or Qatar or Siberia or wherever, you’ll know why: $$$$$$$$$.
[AP]
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