Commercialization of sports in USA

Commercialization of sports in USA

Sports have been a major part of American broadcasting since the early days of radio. Commercialization of sports that is commonly seen in USA is through media. Since revenue of advertising space represents network television’s principal revenue stream, the size of and composition of programmes audiences assumes critical importance. Commercial television networks has put sports in their menus of entertainment-oriented programming (games shows, situation comedies, docudramas and infotainment), designed solely to secure mass audiences. It is relatively inexpensive and easy to produce (certainly compared with programming lasting upwards to two hours); it is practically the only live television genre involving uncertain outcomes; it has a historically and culturally entrenched popular appeal; and, perhaps the most significantly, it can boast a rare ability to attract high concentration of the 18 to 34 year-old male consumers prized by corporate advertisers.

One such example is the Walt Disney Co. the world’s largest and entertainment conglomerate based in USA, who is holding 80 percent of the joint venture of ESPN along with Hearst Corporation. There has been an increasing trend in the revenue of Walt Disney Co. and the main reason is none other than ESPN. Most programming on ESPN and its affiliated networks consists of live or tape-delayed sets of events and sports-related news programming (such as SportsCenter). The remainder includes sports-related talk shows (such as Around the Horn, Jim Rome is Burning, Outside the Lines, "SportsNation", and PTI), sports-related documentaries, films (such as "3: The Dale Earnhardt Story"), and original series (such as "The Bronx Is Burning"). With the rights of airing major sports leagues such as Major Soccer League and National Basketball Association, it has attracted huge number of audience around the world.

In 2007, the company reported a 12 percent rise in quarterly net income on Thursday largely from strong gains at ESPN. Its income for 2007 rose to $4.7 billion from $3.4 billion on revenue of $35.5 billion. Excluding one-time gains from the sale of its stakes in the E! Entertainment cable channel and Us Weekly, revenue jumped 24 percent a share. Revenue for the quarter was largely static — $8.93 billion compared with $8.65 billion a year earlier — in comparison with what had been a spectacular quarter of growth in 2006 across the company’s studio, theme park and consumer products businesses. ESPN was largely responsible for the climb in net income. Higher cable fees and advertising revenue at the sports television unit drove Disney’s cable networks’ operating income up 30 percent to $1.1 billion.

It is followed by another rise in 2009. The company's media networks division, which includes ABC, ESPN and Disney Channel, among other outlets, reported that its revenue jumped 14% to $4.73 billion, while its operating profit increased 26% to $1.49 billion. ESPN was lifted by higher fees paid by cable and satellite operators. ‘Ad revenue at the network declined, but ad sales are showing improvement in the current quarter, said the representative of the company.

Tjide Lisa, Han Rui Yuan, Chee Kai Yi, Angel Chan and David Law