Step Aside And Let The Private Sector In!October 23, 2023
Why Business Should Become More PoliticalNovember 1, 2023
An Article By Ian Kilbride.
I have just had the privilege of witnessing one of the greatest games of rugby, experiencing first-hand the Springboks beating France in a herculean quarter final match of intensity, skill, fitness, stamina and team spirit. The magnificent State de France stadium was a colourful cauldron of passion, national pride, singing, whistling and yes, tears, from both sets of supporters. Despite the customary whining and booing from the French supporters, the spirit in the stadium was one of mutual respect, good humour and sheer excitement at the breathtaking pace and intensity of an end-to-end match that had everything. Having worn my Springbok supporter jersey with pride, it’s going to be tough on Saturday 21 October to watch the country of my birth, England, take on the country of my residence, South Africa. No such dilemma for my children however, whose blood runs green!
But while the game (and the emotional exhaustion) lingers in one’s mind, the events around the match led me to think about the economy of sport more broadly. A reported 20,000 Springbok supporters attended the Stade de France quarter final match and while not all flew from SA, clearly many thousands did and in addition to paying a pretty penny for long haul flights, spent their hard-earned Euros in hotels, bars, restaurants, tours, sightseeing and other activities. The entire competition will bring some 600,000 visitors to France and generate approximately $1 billion to the national economy. While impressive, this is actually small fry on a global scale. In fact, revenues generated from the rugby world cup constitute little more than 0,15% of the entire global sports market. The obvious reason for this is that, despite its growing popularity, professionalism and footprint, rugby is not a global sport. In fact, it does not rank in the top ten of the most profitable global sports.
Not surprisingly, the top spot is taken by soccer, the beautiful game. It is the only truly global game and is unlikely to be dethroned as the premier sport in our lifetime. While soccer generates some $50 billion in revenues annually, perhaps more surprisingly, American Football ($17 billion) and Basketball ($7 billion) occupy second and third place respectively. This reminds one of the incredible power of the US economy generated by a country of 330 million.
As the founding Chairperson of Lords Taverners in South Africa, I was interested to examine the size of the cricket market globally and again was quite surprised that it ranks as high as fourth in revenue generation globally at $3,5 billion. Again, while growing in popularity, cricket is far from a global sport and will continue to bamboozle our American friends in its gentle complexity for generations to come. Clearly, the Indian Premier League has propelled the sport into a whole new financial orbit.
My personal passion of motor racing, and specifically Formula 1, comes in at fifth, with revenues of $1,4 billion. The anomaly here is that the ‘sport’ is run for just nine months of the year and only has 23 events in the entire calendar. But the greatest anomaly is that only 10 teams participate in the sport, and, in effect, there are only 20 drivers in this most exclusive of all sports.
But of course, sport globally is not just about the players, it’s about franchises, gate revenues, sponsors, broadcasting rights, memorabilia and regrettably a burgeoning gambling market. I say regrettably, as gaming advertising and sponsorship, particularly in professional soccer, can clearly have some devastating consequences for working class and poor communities in particular. I was surprised to learn that gate revenues still rank as global sport’s top revenue earner, followed by broadcast rights and advertising.
Unsurprisingly, given the size of their respective economies, the US, China and Japan have the biggest sports revenue markets, followed surprisingly by South Korea and then Germany, the UK and France. In terms of sports players however, China is way out in front with a staggering 744 million out of a total population of 1,4 billion. It simply boggles the mind that one in two Chinese plays sport!
But in this hyper-competitive world of global sport, which team or franchise is the most profitable? The title goes to the NFL American Football franchise, the Dallas Cowboys, followed by the New York Yankees, generating $5 billion and $4,6 billion respectively. These are followed by the two Spanish soccer giants, Real Madrid ($ 4,24 billion) and Barcelona ($4,02 billion) respectively.
These numbers provide a sense of the scale of the sporting economy globally, but they also leave a key question unanswered and that is: how much of these breathtaking revenues find their way back into local communities to assist with grassroot sport and the nurturing of our future sporting megastars? My guess is very little indeed and surely this is a gap global sport needs to address urgently.