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SBD Global/October 15, 2013/Media

Sportel: FIFA TV Chief Ericson Still Sees Room For Prices To Rise On Media Rights

FIFA TV Director Niclas Ericson says there is still room for TV rights prices to rise.
FIFA TV Division Dir Niclas Ericson told SBD Global that he does not think the ceiling has been reached in terms of the amount spent on sports media rights. Asked about the issue at Sportel Monaco, Ericson said, “I don’t think so. We see good development everywhere. It’s going slower in Europe, that’s clear. However, some countries in Europe are even testing the basic-tier concept, which is very well rolled out in the U.S. I don’t believe that media-rights costs for top sporting events will stagnate, certainly not on a worldwide basis." He said, “Our rights have had very good increases, so we don’t see that. And it’s becoming even more key for media companies to have top live events. We are happy, and we have to work hard to make sure our product is relevant and stays at the top.” To make sure its product stays relevant, FIFA will make only small changes to its production of the 2014 World Cup in Brazil. However, due to new technologies and the continuing rise of social media, those small changes could have a major impact. Ericson: “Things have changed in terms of how people are using the things we are producing from the event. Both around the matches -- non-match footage -- and also match footage in that sense that more screens can now take it. There’s more demand for it. That has changed compared to the past. We produced a lot of footage in the past, but you could not use as much of it as you start to be able to do now.” The non-match footage will include training sessions and interviews, among others. It has become cheaper to produce this additional footage and access it, Ericson said. FIFA will also provide its clients with remote access to the servers. Ericson: “That is, I think, the big change.”

RISING COSTS: Despite only minor changes to FIFA’s World Cup production, Ericson announced that the cost of next year’s event will exceed those of previous ones by a large margin. While he did not provide any actual number, Ericson said that the net production costs for the 2010 World Cup in South Africa were around $150M. Asked for the reason for the increase in ’14, he said, “You have 12 stadiums instead of 10, the country is much bigger, which means higher logistical costs, and the price level in Brazil is higher than it was in South Africa. So you have those three factors and that makes large increases."
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