There is a bubble within sports, and it is close to bursting


Michael Hood

There is an old mantra that ‘Modern sport is a Billion dollar industry.’ This is beaten to a pulp  into our minds by pundits, reporters, coaches, executives or just about anybody involved within sports. There is no doubt that sports as of right now is a multi-billion dollar industry. With competition over merchandise and TV rights deals over the last two decades, we commonly see clubs being bought and sold for upwards of $1 Billion. Can this last? Is the bubble about to burst?

It has not always been like this. ports’ clubs only began to be worth in the area of $1 Billion within the last decade. The era of sports being a billion dollar business, began with American Malcolm Glazer’s $1.5 Billion investment into the English soccer club, Manchester United FC, back in 2005. This was a memorable moment in the industry, because it had been speculated that clubs such as the Los Angeles Lakers, Dallas Cowboys and New York Yankees had been worth over a billion dollars, but now it was real.

According to Forbes, almost every NFL team today is worth over $1 Billion, every NFL team recorded a profit  last season and now even college athletic teams are beginning to be valued at billions of dollars. The backbone of this rise has been TV Rights’ deals skyrocketing since the turn of the millenium. According to Statista, the combined value of all the NFL TV deals during 2017 accounted for a whopping $56.55 Billion. The highest of which being ESPN’s $15.2 Billion deal to retain rights for Monday Night Football.

The later of which shows the cracks beginning the unfold in the long standing institution of sport that is the NFL. ESPN has been the subject of numerous layoffs over the past year. The channel that was once the head of all sports media has went from must watch TV to something you glance at when you are waiting on a table at a restaurant when you go out to eat. The instability has began to affect parent company Walt Disney which has lead to Disney making it a priority to unload ESPN.

ESPN’s annus horribilis is the start of the bubble bursting. For years, the financial backbone of any sports club was TV revenue. Traditional media is changing, which could however mark a dramatic change in how we watch sports. We are at the end of the era where big personalities such as Stuart Scott or Dan Patrick control the one massive conversation about what is happening in sports.

This old era is to be replaced by a new era of small YouTubers and bloggers that dictate thousands of small conversations or have a thousand different opinions about one massive topic. The writing is already on the wall, ESPN has lost over 11 million subscribers just over the past five years. Millions of millennials are pulling the plug on major media outlets like ESPN opting just to watch streams of games online for free.

While sports will remain a HUGE industry in terms of financial clout, the days of hundred million dollar contracts and billion dollar clubs. Sports is not an industry one should get into to make money. Sports are very expensive hobbies, as kids we want to own sports teams not to turn a profit and grow our net worth. If that was the mentality of more owners in sports, then sports would be a lot more enjoyable.

There is a bubble within sports, and it is close to bursting. This however is not a bad thing. This will root out the greed that surrounds the industry. There will be no more players just hunting big pay days and owners that only care about the bottom line. Sports will go back to being something that is done out of the love of the sport.