Global sports market expected to reach $145 billion in revenue
Julie Clark: The global sports market is projected to rise at a compound annual growth rate of 3.7 percent, to reach $145 billion U.S. dollars by 2015. The key drivers of this growth include a combination of improved economic conditions, stronger TV advertising revenues, further growth in Pay TV penetration, plus of course the hosting of a range of major sports events over the time period.
And these include the London 2012 Olympic Games; the FIFA World Cup in Brazil in 2014; and the Sochi Winter Olympics, also in 2014.
North America accounts for the largest sports market, with 41 percent of the total. Although Latin America is the fastest growing region going forward. Even higher growth rates are projected in the Middle East and the BRIC countries.
In terms of growth sectors sponsorship and media rights are expected to show the most significant rises. Sponsorship is particularly important in certain regions. With, for example, over 40 percent of all sports revenue coming from the sponsorship in Asia.
On the media side improvements in broadcasting technology, allowing higher quality coverage of sport. At the same time TV companies are embracing social media to engage with fans and deliver a greater intensity of experience.
But there are some challenges here. Will consumers expect to access sports for free on the internet? On the positive side the proliferation of digitized content, web access and social media, means that sports rights holders now have the ability to mine and analyze information on their consumers; which should help them measure the impact of their investment.
Many sports events have had record attendances despite the economic conditions, but this tends to be the top-tier events, and second-tier events are finding it harder and harder to achieve the right balance between pricing and attendance levels. Although gate revenues still account for the largest single segment of spend, and particularly important in North America and Europe, they are not growing very fast. But all in all the sports market is growing faster than the economy as a whole and remains a dynamic and exciting sector.
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