Qualitative Analysis of Revenue Sharing in Professional Sports Broadcasting Using Network Theory

Over the past 25 years, the relationship between professional sports leagues and broadcast networks has employed a traditional rights fee model. This model involves a guaranteed upfront payment from the networks to the leagues. Over the past decade, the National Football League, the National Basketball Association, Major League Baseball, and the National Hockey League have each utilized multiple networks as their television outlet. In 2002, NBC became the first of the four major networks to not be affiliated with any of the four leagues after claiming they lost hundreds of millions of dollars due to skyrocketing rights fees. NBC is now attempting a revenue sharing model with the Arena Football League in an effort to control their expenses. Wolfe, Meenaghan, and O'Sullivan's (1998) network theory concepts of power, dependency, and relationship provide the foundation of this study. The purpose of this study was to examine the effectiveness of the alternative revenue sharing model, and how the model could alter Wolfe et al.'s (1998) network theory concepts between broadcast networks and professional sports leagues. A qualitative case study approach was utilized to interpret data collected through interviews with four participants who have expert knowledge of the sports broadcasting industry. The major findings reveal that the revenue sharing model is an effective model for broadcast networks and professional sports leagues, and the revenue sharing model impacts the concepts of power, dependency, and relationship between the networks and the leagues. This study answers research questions relating to network theory, as well as future implications for the relationship between television and sport.