The Business of Sport

It is not uncommon, these days, to hear teenagers from all corners of the globe to discuss – especially after a weekend – the foibles and fortunes of their favourite football club. Such discussion can sometimes become heated argument as personal biases and preconceived prejudices take over rational debate. This is now a naturally occurring phenomena all over the world, and though nothing can compare with the beautiful game, snippets of conversations on international cricket matches, NBA basketball games, F1 Racing and even golf, can be heard as one walks down corridors in schools all over the world.
What has caused this global phenomenon? As a teacher of Business Studies and an avid follower of sport myself, I thought I might consider an analysis of sport in order to make sports-crazy teenagers use a lateral approach in understanding Business Studies – from the perspective of what is, in my opinion, one of the fastest growing commercial activities in the world.
Fastest-growing? Well, though the sports industry has not have the prodigious growth rate of the Internet, it is – along with tourism – a rapidly growing industry that is not only gaining popularity on the global scene, but one that is constantly evolving to adapt to changing personal attitudes, new-fangled technologies and modern lifestyles. Yes, sports is big business and the sport industry has contributed a greater margin to the global GDP than ever before. In other words, it is a global industry that fosters a range of economic activity, providing employment – and entertainment – across all social strata globally.
Consider some of these facts regarding the impact that the business of sport has had – and continues to have – on society:
 In tandem, the major leagues in the States – NFL, NBA and MLB – garner around $ 12 billion in annual revenue. That figure is miniscule in comparison with the total market worth of the sports industry in the United States: $ 425 billion, which means that the sports industry is just smaller than the food retailing industry in the USA.
 Ticket sales alone at the 2003 Cricket World Cup in South Africa totaled US $ 11.2 million. That figure is estimated to shoot up to US $ 40 million in next month’s World Cup in the West Indies.
 Sports media is a multi-billion dollar domain within the broader field of media and communications. Think ESPN and Fox Sports. Think Supersport here in Africa.
 Every match in the 2006 World Cup in Germany featured footballs from Pakistan, which exported around 56 million footballs for US $ 185 million. Not surprising when approximately 80% of the world’s footballs comes from Sialkot, a small town in Pakistan which is known for its cottage industry.
 Nike Inc – possibly, the most recognizable sports brand – earned revenues to the tune of US $ 15 billion for the fiscal year 2006.
The list is endless and, on careful thought and research, you are likely to come up further examples of the impact that sport has had – and continues to have – on society. Look around, for that matter, and you will notice that sport on become part of your wardrobe. You might not wear that Ronaldo football shirt that your mate wears; you might not style your hair the way Beckham does, you might not wear the national colours of your country when you hang out with your friends, but I am quite sure that you own a pair of sports shoes just because it looks good! Which brings me to my first reason for the phenomenal growth of the sports industry – fashion. Sport has become trendier by the day, and this has led to sports merchandising contributing a big part to the revenues earned by the global sports industry. Teenagers find it fashionable to sport the football shirt of their favourite star or don their country’s (club’s) colours on that casual day out. However, sport has been fashionable – and of great economic impact – because of two basic business concepts: interdependence and quality.
Let me deal with interdependence first. According to basic Business Studies, this is the mutual dependence on each other enjoyed by all members of society. In my opinion, both – sport and the media – are highly interdependent on each other, and that is why they have both grown prodigiously in recent times. Ted Turner and Rupert Murdoch are media moguls and there empires owe a great deal to the sport industry itself. Sport, in turn, has become a global industry thanks to the far-reaching tentacles of Mssrs Turner and Murdoch. Yes, if sport is a global industry, it is because people from different corners of the world are able to enjoy what was once a local happening: the Premier League, for instance. No wonder then that both industries are multi-billion dollar revenue earners! In fact, thanks to the media and sport, people in small cottage industries earn a living, maintenance staff at stadia in developing countries can take home a reasonable wage, a budding entrepreneur can open up his own sports shop, a journalist can eke out a living and an accountant at an Astroturf manufacturer can grin at this pay packet. Interdependence again! Sport provided employment and employment makes sport possible.
In fact, sport has created a wider range of jobs that youngsters today can look forward to: sports psychology, sport medicine, sport technology, sport statistics, sport advertising, sport management, sports event management, sport marketing, to name a few. No wonder then, that Dubai, once oil-rich, has diversified into tourism and, of late, into sport tourism. The government there knows that investment in sport is definitely going to bring in revenues in more ways than one.
Quality! What quality does sport possess? What is the unique selling point that has made its popularity soar. In my opinion, it is the sheer value of live entertainment. There are no retakes here; it is sheer drama that can literally take you to the edge of your seat more times than one. It is drama in real life. And, this I feel is sports’ unique selling point. It gives entertainment value; which is why a live sports event can take precedence over a Tom Cruise blockbuster or that mystery series Mother has been religiously following all month long. The fact that it provides sheer entertainment in live stadiums or sedate living rooms is the main reason sport has grown in popularity all over the world. And, in trying to maintain its entertainment value and enhance this USP, specific players in the sports industry have tried to help sport evolve with time and adapt with time. No wonder then, that sport has become more colourful, entertaining and exciting. It has managed to retain its entertainment value to adapting to an ever-changing global environment.
Yes, sport is big business. One that is growing at a steady pace, entertaining and employing people all over the world. One that is contributing to the economic activities of almost every single country the world. One that is benefiting as many industries as it benefits from them.