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Sports... a $700 billion market

Mideast sports sector 'fastest growing globally'

DOHA, November 6, 2014

The sports industry in the Middle East is experiencing the fastest growth globally, with revenues projected to grow at 10 per cent per year over the next three years, said an industry expert.

There is significant appetite in the region for hosting international sports events and securing media rights and sponsorships, added Nicolas Sultan, principal at Doha-based A T Kearney Middle East, a leading management consulting firm.

“The sports sector has witnessed substantial growth in the region, and is progressively becoming a major driver for economic development and investment in infrastructure in the GCC, as well as being leveraged for branding of nations along with the global events hosted here,” Sultan noted.

“It is imperative that strategic and operational challenges be tackled effectively by the various players in the sports industry eco-system, in order to ensure that the most value is extracted and a sustainable industry is built for the future.”

Sultan was commenting on the paper A T Kearney presented at the Doha Goals Forum, held in Doha, Qatar, a key platform in the Middle East for world leaders to create initiatives for global progress through sport.

According to the new study by A T Kearney, 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 the sector, provided they pay attention to the key value drivers and carefully manage their business models.

With seven per cent 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 US, 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, according to the A T Kearney study.

“When you add in sporting goods, apparel, equipment, and health and fitness spending, the sports industry generates as much as $700 billion yearly, or one per cent of global GDP,” the paper said.

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 per cent of sports event revenues in 2013, and ticketing accounted for 27 per cent of revenues.

The study also revealed many actors in the sports business are 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.

Sheikh Faisal bin Mubarak Al Thani, executive director of Doha Goals, said: "Job creation and economic opportunity are two of the foundations of Doha Goals.”

“More than just stadium and facilities construction, sport presents huge potential for nations to generate earning power for themselves and their citizens, from the growth of sectors such as construction and financing through to tourism and hospitality. We look forward to continuing the discussion at this year's Doha Goals Forum,” he concluded. – TradeArabia News Service




Tags: GDP | A T Kearney | Doha Goals |

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