Working harder than ever to sell tickets. Continuing to roll out alternate uniforms at warp speed, keeping a fire lit under a stagnant merchandising business. On the upside, media rights and sponsorships keep rolling toward record numbers, as new regional networks keep coming, complete with the ad platforms they bring.  That’s how analysts at Pricewaterhouse Coopers see the next five years shaping up for the North American sports industry – television and sponsorship dollars bailing out flat consumer discretionary spending to produce solid growth.  In its annual industry outlook, PwC projects 4.8% annual growth over the next five years, from $53.6 billion in 2012 to $67.7 billion in 2017 (projected trends are driven by major North American professional leagues, including Major League Soccer, along with top-level intercollegiate sports). The projection is a healthy increase from the sports industry’s 3% annual growth rate of the previous five years, a run that began shortly before the economic fallout of 2008.  Gate revenue will remain the largest single segment at $19.1 billion, though annual growth will be a relatively modest 3.9%. Chalk up a chunk of that expected growth to the new climate of labor peace, which follows those fallouts that shortened recent NHL and NBA seasons and contributed to a slight decline in gate receipts between 2008 and 2012.  During the economic fallout of a few years ago, “teams responded by freezing prices,” says Adam Jones, a PwC director and leader of the company’s sports practice. Things are loosening a bit, but people still aren’t spending at pre-2008 levels, and the building wave of new stadiums and arenas (and the higher prices they command) has largely matured. So expect sports teams all over the country to continue investing in technology – state-of-the-art video boards, wi-fi, various smart phone aps and other game day enhancements. Also, in-house ticket exchanges that allow teams to capture secondary market business are a growing source of business.  PwC forecasts just 1.6% annual growth in merchandise sales, a business strongly correlated with discretionary income, through 2017. No wonder it’s tough to keep up with the ever-funkier uniform designs that Nike, Adidas Adidas and Under Armour Under Armour put out at breakneck pace. Staying a step ahead of the game is more important than ever.  Where the big growth will come from over the next five years: media rights, that safe haven for advertisers where fees have already exploded in recent years, particularly for Major League Baseball and the NFL. As the last bastion of programming that’s mostly safe from commercial-zapping DVRs, live sports still has room for growth through more regional networks.  “More content will come online,” says Jones, with ratings that could be enhanced by division and conference realignment in pro and college sports that figure to create more compelling matchups. PwC predicts that media rights fees will grow 7.7% a year through 2017, to just over $17 billion.  Like media deals, sports sponsorships bring the steady hand of multiyear deals that bring certainty over a period of years. Renewals slowed in the immediate wake of the 2008 recession but have since picked up steam. PwC sees the pace quickening further with a growth rate of 6.6% annually over the next five years, to $17.7 billion. Credit the growth of media, which sponsorships can piggy back on as more advertising and marketing capacity opens up on more networks. And don’t forget the venues, which continue to open more space to sponsors in the quest to capture more dollars around slower-spending fans.
According to Pricewaterhouse Coopers, big growth in media and sponsorships will bail out lackluster consumer spending on tickets and merchandise over the next five years.