The global business of sport is now a multi-billion-dollar industry, but it’s not all just about the money
It is highly likely that experts will always disagree over the size of the global sports market. The US broadcaster and author Rick Horrow once came up with a figure of US$1tn. More recently, management consultants AT Kearney concluded that sports events generate US$80bn a year and that the overall sports market was closer to US$700bn, or around one per cent of global GDP. Sport is no longer simply a pastime – it has become a significant commercial force.
While the sector has become a major economic player in its own right, its powers go way beyond business, and impact the classroom, politics, health and social or community development.
A major draw will always be its entertainment factor. Live sport is one of the few content genres that continues to draw massive TV audiences and attract premium advertising rates for media companies. The average cost of a 30-second advertising slot at this year’s NFL Super Bowl was US$4m – the sort of return that makes broadcasters compete for the major sports rights such as the FIFA World Cup, which saw estimated revenues of US$4 billion from its Brazil event in 2014.
Sport exerts a remarkable hold on the public imagination. How well (or badly) a team performed at last night’s match is fervently discussed around millions of watercoolers each morning, and this level of global exposure and deep engagement creates an intensely effective channel for brands to reach their customers.
According to consultancy IEG, sports retain the lion’s share of the US$55bn that will be spent on sponsorship this year. Sport has been a business ever since the first ticket was sold to a Greek wrestling bout, but nowadays the sector reaches far beyond transactional business. The campaigns mounted by nations and cities to host events such as the Olympics and FIFA World Cup underscore sport’s vital role in building a national brand.
With so many diseases attributed to sedentary lifestyles, governments increasingly recognise and promote the role of fitness in maintaining the wellbeing of their nations
Barcelona credits its hosting of the Olympic Games as the key to the transformation of the city, while Beijing’s Olympic Games were seen as a way of giving the rest of the world a glimpse of modern-day China’s capabilities.
The lessons to be learned from staging these and other major sports events were top of the agenda at the globally recognised Host Cities conference, which attracted high-level delegates from all over the world to Dubai in late November.
Speakers including Danny Jordaan, the man behind the mould-breaking South Africa World Cup 2010, and Tariq Saed Al-Abdulla, of the Qatar Olympic Committee, were among the figures to extol the transformational power of sports events but, like their colleagues, tempered their enthusiasm with a dash of pragmatism.
Hosting sports events can drive sustained positive change in host cities and countries, but only when they are part of a smart strategy and clear vision designed to achieve long-term objectives. The message was clear: failure to plan for a sustainable future and to integrate sport into broader development strategy leads not only to waste and white elephant facilities, but a failure to achieve significant return on what is a potentially massive investment.
When discussing sport’s role as a geopolitical marketing tool and multi-billion-dollar media and entertainment industry, it is important not to forget its foundations: the grassroots. With so many diseases attributed to sedentary lifestyles, governments increasingly recognise and promote the role of fitness in taking pressure off healthcare resources and maintaining the wellbeing of their nations. Encouraging people to take part in sport is seen as central to fit nations.
You can put a figure on ticket sales or rights deals, but it is more difficult to value how sport impacts on the well-being of a nation, how it can change the way the world sees a city or country and how it can inspire young people and change the way they think.