The professional sports industry has been traditionally categorized within the service industry , and deemed an important contributor to the service economy. For instance, “sport’s contribution is contained within the broader classification of ‘Cultural and Recreational Service’, which consists of motion pictures, radio and television services, libraries, museums and the arts, sport and recreation, and gambling services” (Shilbury et al. 2009, p. 90). In North America, sports teams and clubs are classified under Industry Group 7113–Performing Arts, Sports, and Similar Events (NAICS.com). However, at its core, the professional sport industry is in the business of providing a type of information service. Regardless of how sport as a product is consumed, the core product of professional sports—the uncertainty of outcome of the game (Mason 1999)—is a stream of information that reaches consumers. Therefore, we argue that the professional sport industry should be considered a combination of the information economy and the service economy, with the former being the major impetus for its potential growth.
The professional sport industry has experienced tremendous growth since its emergence in the late nineteenth century and the commercial nature of sport, in general, has radically expanded over the past decades (Brown et al. 2016). One major reason for the growth can be attributed to the fact that professional sport has successfully explored and secured several new sources of revenue beyond gate receipts (Mason 1999; Gratton and Solberg 2007; Quirk and Fort 1992; Milne 2016). For instance, Forbes magazine predicted that:
The sports market in North America was worth $60.5 billion in 2014. It is expected to reach $73.5 billion by 2019. The biggest reason for such growth is projected increases in revenue derived from media rights deals, which is predicted to surpass gate revenues as the sports industry’s largest segment. (Heitner 2015, para. 1)
Table 1.1 contains estimated media revenues in the North American market from 2005 through 2021.
Table 1.1
Media rights for the North American sports market, 2005–2021
Year | Media rights value (in millions) ($) |
|---|---|
2005 | 7041 |
2006 | 7546 |
2007 | 8388 |
2008 | 8540 |
2009 | 8809 |
2010 | 9423 |
2011 | 10,858 |
2012 | 11,619 |
2013 | 12,262 |
2014 | 14,595 |
2015 | 16,305 |
2016 | 18,372 |
2017 | 19,075 |
2018 | 20,135 |
2019 | 20,960 |
2020 | 21,755 |
2021 | 22,667 |
More specifically, television broadcasting remains central to the economic sustainability of professional sport, based on the notion of broadcast scarcity (Kirton and David 2013; Hutchins and Rowe 2012), which is secured by the exclusive contractual relationships negotiated both locally and nationally between professional sport and its media partners (primarily television networks). In addition, broader television exposure of professional sports games also draws sponsors to invest more money in leagues or individual clubs, hence creating another important revenue stream for the industry (Dietl et al. 2012; Andreff and Staudohar 2002). Skyrocketing revenues from television or TV -related sources underscore how it has been advancements in information technology and distribution, rather than the enhancement of traditional revenue sources, which has driven the industry to reach an unprecedented size and scale. However, in academia and amongst practitioners, the professional sports industry is still commonly regarded as a service industry, rather than an information industry . As we argue in this book, the lack of understanding of this fundamental information rule can lead to incorrect assumptions about the impact of advancements to information technology on the sustainability of the professional sports industry. For instance, far from being considered a boon to the industry, the distribution of games on radio , and television was initially deemed a threat to attendance demand by many industry insiders (Thomas and Jolson 1979; Fizel and Bennett 1989; Zhang and Smith 1997). Currently, when facing another wave of advances to communication technology, organizers of the professional sport industry have made similar assumptions about the detrimental effects of new media and attempted to protect and limit professional sport content as Intellectual Property (IP) by restricting the availability of certain forms of content across various media platforms .
Thus, another challenge facing professional sports leagues involves IP protection in a dynamic environment of new media characterized by high user autonomy and rapid change. Today, the traditional practice of controlling content by professional sports leagues or teams, through partnering with a few exclusively selected mass media providers, has become more complicated due to the unauthorized streaming of sports content throughout the Internet, and the creation of related content by fans (Hutchins and Rowe 2012). Professional sports organizations have fought to exert control over the production and distribution of content (Milne 2016), as well as the means of consumption of mediated content by fans (Hutchins and Rowe 2012). However, behaviors such as live unicast or peer-to-peer streaming are almost impossible to fully regulate and control (Hutchins and Rowe 2012), which leads to escalating tensions between professional sports and the ...