THE BUSINESS OF SPORT
REBOUND IN SPORTING TIMES
A solid sports recovery is expected in the post-COVID world – Gloria Spittel
Sport as a business or the business of sport is no longer a new concept, phenomenon or dirty little secret. But this does not mean that corrupt businesspeople (or people masquerading as questionably ethical businesspeople) should be allowed free reign of any sport or sporting body while alluding to the adage of ‘it’s just business!’
For many players and consumers, sport is more than a business. For the former, it is the development of skills, livelihoods and their very sense of being for some.
Meanwhile, for consumers or spectators, sport feeds emotions associated with national pride to commitment (in terms of following a sport regardless of the time, money and effort involved) and motivation (from wanting to emulate a sportsperson’s work ethic to the joy that comes from their team’s success) and in the event the supported team or person loses, deep despair.
Given the strong emotions felt by supporters, accepting that sport is a business could be challenging.
After all, support of a mega-conglomerate regardless of its social presence in a community is unlikely to produce an evocative response similar to that of a sport. It could be argued that it is precisely this emotional base that has made sport such a lucrative and probably inelastic business – COVID-19 notwithstanding.
The global sporting sector has undergone commercialisation to the point where teams are operated as organisations with management tools deployed to develop skills, source and apply best practices, and research and introduce specific protocols or training for professionals.
These in turn could contribute and generate intellectual content, with lessons for applications across industries and beyond the business world. And as with all other profit making businesses, money is at its core.
Just how much money is there in global sport?
The global sports sector including both participatory (i.e. fitness, recreational sporting centres, golf courses and so on) and spectator sports (teams and individuals) was valued at approximately US$ 490 billion in 2018 with an annual growth rate of 4.3 percent since 2014.
Prior to the onset of COVID-19 which has caused the reorganising of seasons, and postponements and cancellations of certain legs the global sector was expected to grow at 5.9 percent annually to nearly 615 billion dollars by 2022.
While the participatory sports market accounted for the largest share of the global sector at 56 percent in 2018, the spectator segment was expected to grow at an annual rate of 5.9 percent.
Furthermore, within the latter, the highest revenue source among gate tickets, media rights, sponsorships and merchandising is none other than media rights. In 2018, it accounted for nearly 24 percent of revenue, offering credence to claims of a global spectatorship.
Similar to most cultural consumption over media, the largest market in the global sports sector is North America it accounts for nearly 31 percent of the market. This can be understood in the way sport is practised in the region with the drafting and trading of players to and between professional teams, in various leagues and bodies.
Arguably, sport as a business rather than a pastime for national pride has its home in North America. However, the Asia-Pacific and Middle East were forecast to be the fastest growing regions with an annual growth rate of nine percent and six percent respectively in the period from 2019 to 2022.
But knowing these numbers and the fact that sport is a global business does not cast a shadow on its enjoyability – as long as spectators are assured of the authenticity of results, and the appropriate checks and balances are in place to prevent meddling (by tired, corrupt and dishonorable parties such as businesspeople, officials, politicians and the random Joe with a stake and influential power).
These are some of the downsides of the business of sport.
Players being rewarded for their work, opting to make themselves available to international leagues at the expense of national sporting bodies, should be understood in the context of making a living for themselves and importantly, for the sport they play.
This improves their game by positioning them among highly skilled and competitive colleagues. Widening the pool in which to swim is always a better idea than becoming the king of a small pond.
The knowledge and skills that are imparted could be valuable lessons if shared among national teams and younger generations a mechanism to achieve this would be beneficial rather than imposing punitive measures.
But the numbers cited were those projected in the pre-COVID world. Factoring in the effect of economic slowdowns across the globe, the global sports market is expected to decline by 2.7 this year but grow at eight percent from 2021 to reach US$ 550 billion in 2023.
Although it falls short of the earlier projections, the expected recovery is promising for those directly involved in the sector… and for those of us who rely on it for entertainment, whether this is pleasurable or disastrous.