The Business of Sport

It is not uncommon, these days, to hear teenagers from all corners of the globe to
expertly 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.