World sports business runs in billions of dollars. The global sports market grew from $354.96 billion in 2021 to $496.52 billion in 2022 at a compound annual growth rate (CAGR) of 39.9 per cent. Analysts expect sports market to leap beyond US $700 billion by year 2026.
Sports market will continue to grow globally around CAGR 41.5 per cent next year, experts estimate. The Olympics, football, Formula1, tennis and cricket will continue to dominate sports markets because of their allure, massive fan following, and support from sponsors and governments.
The sports success story suffered a setback two years ago. World’s top Sports governing bodies endured financial losses because of events cancellations enforced by the pandemic. Sports organisers, players, television channels, sponsors and fans would hope such pandemics never occur.
Governments lifted lockdowns last year. Major sports events are back in action. Spectators have returned to the stadiums. Tokyo hosted the Olympics and Paralympics last year. Now group stage matches of the FIFA World Cup are progressing in Qatar. The Gulf state has invested more than US $ 225 billion to host FIFA World Cup 2022.
FIFA last week said it earned $7.5 billion revenue through four years of commercial deals linked to the World Cup in Qatar. The world football governing body earned $5.4 billion in the 2018 edition hosted by Russia.
The 2018 World Cup added more than $14 billion to Russia’s economy, or more than one per cent of the country's gross domestic product. From the total prize money of $440 million, FIFA will present $42 million to the winner and $30 million to the runner-up.
The FIFA World Cup 2022 prize money is less than 34 per cent UEFA Champions League total prize money of $1,300 million. Last season’s UEFA Champions League winner Real Madrid bagged $86.89 million cash prize.
Major sports tournaments add significant revenue to the host country’s economy. Marquee events that propel sports business include the Summer and Winter Olympics, football, tennis, cricket, motorsport, baseball, basketball, hockey, and horse racing. Major events of these sports bring revenue in billions for hosts throughout the year.
Sports is a winner not just for the competing teams and individual players, but for organisers, sponsors, and other entities in the value chain. This chain includes contractors who build stadiums, grounds, athletics tracks, cycling velodrome, housing, roads, railways, airport, ticketing, and hotels.
Industries benefiting from sports events include construction, power, water, cement, software and hardware, textiles, transport and heavy machinery and healthcare. Major sports events give business to traders and suppliers of building materials such as tiles, cables, fasteners, electrical and plumbing fixtures, sanitary ware, woodworks, laminates, aluminium, and ironmongery.
Sports events create hundreds of thousands of full and part-time jobs globally. Media houses hire journalists, photographers, and graphic designers to publish or broadcast engaging news and analysis. Television channels offer retired players well-paid contracts to give their opinions as expert commentators.
Governing councils of sports keep paid officials CEOs, secretaries, and other office-bearers. Clubs working under these council’s have men’s and women’s teams for various age groups. These teams hire professional chief coaches, assistant coaches, physiotherapists, support, and ground staff on contracts.
Leading apparel, footwear and sport gear makers enjoy a large share in the sports business. Top brands include Nike, Puma, Adidas, Reebok, Babolat, Wilson, Yonex, Cosco, Sanspareils Greenlands, Gray Nicholls, Kookaburra, and Al Rihla, the official ball used in the FIFA World Cup 2022 in Qatar, Small wonder, some brands sponsor sports events.
Hollywood, too, has enjoyed the spinoff of successful sports stories. Film-makers have captured stories of sports heroes and reaped Box Office windfall. The Rocky sequels, starring Sylvester Stallone, on the life and times of a champion boxer. The Game of Their Lives, directed by David Anspaugh, based on USA's stunning victory over England in the 1950 FIFA World Cup, to name a few films among many.
Indeed, sports business is good, especially for the host country. Will there be some spin-offs for other GCC nations from FIFA World Cup 2022?
(Sudeep Sonawane, an India-based journalist, has worked in five countries in the Middle East and Asia. Email: sudeep.sonawane@gmail.com)
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