A.T. Kearney Study: Sports Industry Growing Faster Than GDP
Global sports industry to grow from $80 billion in 2014, to $91 billion by 2017 with an average annual growth rate of 5%
A keen understanding of how to leverage the sports eco-system is key to generate profits, increase brand value and aid economic growth
XX — According to a new study by A.T. Kearney, a global management consulting firm, the sports industry is expanding globally at a rate higher than GDP growth. Industry players are ready to tap into this growth to increase profit, enhance brand value as well as drive economic development. The market for sports events—including revenues from tickets, media rights, and sponsorships—opens tremendous opportunities for the actors of this industry provided they pay attention to the key value drivers and manage carefully their business models.
With 7 percent per year growth between 2009 and 2013, the sports market has grown faster than GDP in most countries in the world, especially in major markets including the United States, Brazil, the UK, and France. Long term prospects are strong - the revenues for yearly events are growing steadily, from $58 billion in 2009 to $75 billion 2013 and $80 billion in 2014. When you add in sporting goods, apparel, equipment, and health and fitness spending, the sports industry generates as much as $700 billion yearly, or 1 percent of global GDP.
Growth occurred across all types of sport, with European football (soccer) remaining the clear leader. Overall, the list of the top seven sports remains unchanged: football, NFL, baseball, Formula 1, NBA, NHL and tennis. Media rights and sponsorships are among the main drivers for revenues. Sponsorships and media rights each accounted for 35 percent of sports event revenues in 2013, and ticketing accounted for 27 percent of revenues.
The study also revealed the many actors in the sports business angling for a bigger piece of the pie—media companies and brands, sports leagues and clubs. Money flows in many directions: from fans to pay-TV providers; from leagues to clubs; and add to that the complexity of national agendas.
Commenting on the study, Hervé Collignon, Partner and Head of Communications, Media and Technology at A.T. Kearney Paris, said: “Revenue of sports events should continue to grow in the next cycle with projected revenue of $91 billion by 2017, an additional $15 billion value between 2013 and 2017. Key revenues will be mainly generated by a robust growth of football and the fast growing business of Rugby or Cricket. The study findings highlight that the sports business is an exciting business opportunity in the coming years.”
Globally, there is a significant opportunity for growth provided by sports industry, with a lot of competition for hosting international sports events and securing media rights and sponsorships.