Economy of Sports
International tournaments take place in as many as 58 categories of sports no matter all of them are popular all over the world or not. But there are more than 58 names of competition. For both men and women there are more than 70 tournaments participated by nations. According to Wikipedia there are other types of tournaments which are participated by team and individuals. These sport events take place yearly to every after two, three to four years except squash which takes place intermittently— last held in 2006.
FIFA World Cup football is the greatest extravaganza on the planet. Crores of spectators rush either for tickets to enjoy the games in the stadium or resort to television like crore others. Football or soccer is a form of sport played between two teams of seven to eleven players with a spherical ball. At the turn of the 21st century, over 250 million players in over 200 countries, making it the world’s most popular sport. Number of nations play football is more than the number of United Nation members—194. About 208 countries play this sport all around the world.
The sports industry today is a wide-reaching business that spans the field of play—from the food and memorabilia stands at the stadium, to media rights and sponsorships. As much as $620 billion is spent every year in the sports industry, which is catering to an ever-more fervent fan base. This complex business environment features numerous participants—from rights owners (clubs, leagues, federations and athletes) to sports agencies, sponsors and broadcasters—all competing for a bigger slice of the pie.
Today’s global sports industry is worth between $480-$620 billion, according to a recent A.T. Kearney study of sports teams, leagues and federations. This includes infrastructure construction, sporting goods, licensed products and live sports events.
The global sports industry is growing faster than overall GDP, and long-term growth prospects remain strong. What does the future hold for the industry and its fervent fan base?
Live sports events in particular offer a compelling proposition to different industry participants—from free-to-air broadcasters seeking viewers and advertising revenues and pay-TV broadcasters looking for loyal subscribers, to sponsors moving away from traditional media, event organizers, athletes and spectators.
The worldwide sports events market, defined as all ticketing, media and marketing revenues for major sports, was worth $64 billion in 2009. Football remains the king: Global revenues for this sport equal $28 billion yearly—almost as much as the combined $32 billion in revenues for all U.S. sports— Formula 1 racing, tennis and golf. In Europe alone, football is a $22 billion business, with the five biggest leagues accounting for half of the market, and the top 20 teams comprising roughly one-quarter of the market. In general, the most popular sports, such as football and those based in the United States, are growing faster than tennis and golf.
A country-by-country breakdown finds that the sports industry is growing faster than GDP both in fast-growing economies, such as the booming BRIC nations (Brazil, Russia, India and China), and in more mature markets in Europe and North America.
The economy of sports also reflects its cyclical nature. Many of the world’s premier sporting events occur every two to four years—the FIFA World Cup and Summer Olympics, for example, take place every four years. Yearly sports revenues have grown steadily, yet how that money is spent changes every year. In 2008, for example, major events accounted for 8 percent of worldwide sports revenues thanks largely to the Beijing Olympics and UEFA Euro 2008 football tournament in Austria and Switzerland. In quieter years (2007, for example), major events make up barely 1 percent of worldwide sports revenues.
How do sports create value? Rights owners define the structure of professional sports around the world. They set the rules, organize the events and take responsibility for generating revenues from matches, media and marketing rights. The sports value chain is structured around four pillars:—
Properties: The properties managed by rights owners are the intangible assets that draw fans and money. They include a wide range of parties, including leagues (such as the Premier League), pro tours (golf’s PGA Tour), teams (the New York Yankees) and athletes (Roger Federer, Lionel Messi).
Rights management: Historically, monetization of properties was based on gate “take” (revenues) but now professional sports depend on media and marketing rights for more sources of revenues. Rights owners, or sports agencies acting on their behalf, not only structure the deals but also trade media and marketing rights.
Events: Effective rights management depends first on operating live events. An enjoyable experience for fans can create additional opportunities for revenue.
Content: The stadiums can only seat a certain number of fans, but packaging content for broadcasters’ and sponsors’ needs is a vital part of creating revenue in modern sports.
Structured around these four pillars, the sports value chain becomes a virtuous circle. Shaping a property can help increase its value through tailored rights management and content packaging can make it more attractive. For example, when cricket organizers created “Twenty20” cricket in 2003, shortening the typical game from several days to a few hours, they shaped a format better suited to live broadcasting. This sports value chain applies similarly to the entertainment industry—including book publishing, music production and other live-event-based markets.
Brazil: GDP growth in Brazil has grown more than 4 percent annually since 2000.
China: GDP growth has grown more than 8 percent annually since 2000. The sports industry impressively grew in relation to household spending.
India: GDP has grown more than 12 percent annually since 2000. The economy has been even more active in sports, as confirmed by the industry’s impressive growth in relation to household spending.
Russia: Since 2000, Russia’s spending on sports rose more than 53 percent annually, China’s rose by 20 percent (thanks to the 2008 Summer Olympics), India’s by 17 percent and Brazil’s by 7 percent. These trends will likely continue in the future as Brazil will host the 2014 World Cup and 2016 Summer Olympics, and Russia will host the 2014 Winter Olympics and 2018 World Cup.
France: While growth in France’s sports spending has been slow since 2000 (4 percent annually), the UEFA Euro 2016 will drive sports consumption and investments. The country has a unique opportunity to build new stadiums and upgrade old ones.
Germany: Germany spent more on sports in preparation for the 2006 World Cup—the country’s sports industry grew at a compound annual growth rate of 5 percent since 2000. Sports marketing in Germany relies on a strong network of local, private sponsors.
United Kingdom: The U.K.’s traditional passion for sports—the country created rugby and was the pioneer of professional football—and its preparation for the 2012 Summer Olympics in London has driven 6 percent annual growth since 2000.
United States: U.S.-based sports—American-style football (NFL), baseball (MLB), basketball (NBA) and hockey (NHL)—are the biggest, bringing in more than €15 billion ($23 billion) yearly in gate, media and sponsorship revenues.
Bangladesh: Since independence of Bangladesh in 1971, football could hardly draw a huge followings in the country though it football is very popular for decades. The fall of football in Bangladesh and the rise of cricket is a very recent phenomenon.
International Federation of Association Football, commonly known as FIFA is the international governing body of association football, futsal and beach soccer. The need for a single body to oversee the game became apparent at the beginning of the 20th century with the increasing popularity of international fixtures. FIFA was founded in Paris on 21 May in 1904. Its headquarters are in Zurich, Switzerland, and its president is Sepp Blatter. FIFA is responsible for the organization of football’s major international tournaments, notably the World Cup. In total, FIFA recognizes 208 national associations and their associated men’s national teams as well as 129 women’s national teams.
The following are the main ongoing sponsors of FIFA: Adidas, Coca-Cola, Emirates, Hyundai-Kia Motors, Sony, VISA.
According to Forbes list of top 2000 world companies Adidas’s position is 558, Coca-Cola 87, Emirates 1034, Hyundai 96, Kia Motors 253, Sony 477 and VISA has got 307th berth.
Like FIFA International Cricket Council is responsible for the organization of cricket’s major international tournaments, notably the ICC World Cup. Like many other sporting authorities ICC has to depend on sponsors or partners for its operations, event management and other expenditure.
ICC’s host broadcaster ESPN STAR Sports is a 50:50 joint venture between two of the world’s leading cable and satellite broadcasters. As Asia’s definitive and complete sports broadcaster and content provider, ESPN STAR Sports combines the strengths and resources of its ultimate parent companies – Walt Disney (ESPN, Inc.) and News Corporation Limited (STAR) – to deliver a diverse array of international and regional sports to viewers via its encrypted pay and free-to-air services.
ESPN STAR Sports showcases an unparalleled variety of premier live sports from around the globe to a cumulative reach of more than 310 million viewers in Asia, 24 hours a day. ESPN STAR Sports has 17 networks covering 24 countries, each localized to deliver differentiated world-class premier sports programming to Asian viewers.
This includes ESPN Asia, ESPN China, ESPN India, ESPN Malaysia, ESPN Taiwan, ESPN Singapore, ESPN Philippines, MBC-ESPN (Korea), ESPN Hong Kong, STAR Sports Hong Kong, STAR Sports Asia, STAR Sports India, STAR Sports Malaysia, STAR Sports Taiwan, STAR Sports Southeast Asia, STAR Sports Singapore & STAR Cricket.
Reliance Communications Limited founded by the late Shri Dhirubhai H Ambani (1932-2002) is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani Group currently has a net worth in excess of Rs. 64,000 crore (US$ 13.6 billion), cash flows of Rs. 13,000 crore (US$ 2.8 billion), net profit of Rs. 8,400 crore (US$ 1.8 billion).
LG Electronics is one of the longest standing Global Partners of ICC, promoting cricket among its billions of passionate followers. Established in 1958, LG Electronics, Inc. (LG) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 84,000 people working in over 115 operations including 84 subsidiaries around the world. With 2008 global sales of USD 44.7 billion, LG comprises five business units – Home Entertainment, Mobile Communications, Home Appliance, Air Conditioning and Business Solutions. LG is the world’s leading producer of flat panel TVs, mobile handsets, air conditioners, front-loading washing machines, LCD monitors and optical storage products.
PepsiCo is an official beverage and snack partner of the ICC. As part of PepsiCo’s passionate commitment to growing the popularity of the sport, the partnership between PepsiCo and the ICC will enable billions of cricket enthusiasts and casual fans to connect with the game. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay, and PepsiCo brands are available in nearly 200 countries across the world. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.
Hero MotoCorp Ltd is committed to the promotion of sport, in particular cricket and golf, at both the elite and grassroots level. Its association with cricket began in 1993 with the sponsorship of Hero Honda Cup (five-nation cricket tournament), while it was also one of the sponsors for the ICC Cricket World Cup 1999. Players such as Virender Sehwag, Ishant Sharma, Gautam Gambhir, Suresh Raina, Irfan Pathan and Zaheer Khan have been brand ambassadors of Hero Honda.
Since its launch in 1985, Emirates grew to become one of the largest international airlines in the world. It believes sports sponsorship is key to connecting with the passengers it serves on its global network of more than 100 destinations. The Dubai-based carrier has a vast sponsorship portfolio spanning a number of sports in addition to cricket, including football, golf, tennis, sailing and rugby.
Emirates’ ICC Official Partner status gives the airline sponsorship rights to all ICC major tournaments, including the 2011 and 2015 ICC Cricket World Cups, ICC Champions Trophy and ICC World Twenty20. It also sponsors the ICC Cricket World Cup Qualifier, ICC Under-19 World Cup, ICC Intercontinental Cup and the ICC Women’s World Cup.
In partnership with the ICC, Emirates will continue sponsoring the Emirates Elite Panel of ICC Umpires and Referees. This agreement will see the Fly Emirates logo prominently displayed on the umpires’ clothing at all ICC events until 2015.
Reebok International Ltd is a British producer of athletic footwear, apparel, and accessories and is currently a subsidiary of Adidas AG. The company, founded in 1895, was originally called Mercury Sports but was renamed Reebok in 1960. Adidas completed its acquisition of Reebok in early 2006.
The company holds exclusive rights to manufacture and market both authentic and replica uniform jerseys and sideline apparel of the teams of the National Football League since 2002, the Canadian Football League since 2004, and is the official shoe supplier to the NFL and Major League Baseball. In addition Reebok acquired official National Hockey League sponsor CCM in 2004, and is now manufacturing ice hockey equipment under the CCM and RBK brand. Reebok has phased out the CCM name on NHL authentic and replica jerseys in recent years, using the Reebok logo since 2005.
Reebok is also the sponsors of Bolton Wanderers Football Club. Several international cricketers, such as Pakistani skipper Shoaib Malik, Pakistani batsman Abdur Razzaq, Sri Lankan Captain Mahela Jayawardene, Indian captain Mahendra Singh Dhoni, Indian batsmen VVS Laxman and Rahul Dravid, and Chris Gayle of the West Indies, endorse Reebok.
Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California.
Founded by Charles Cheers Wakefield in 1899, Castrol is the world’s leading lubricants brand. Castrol’s commercial success is underpinned by its ability to deliver improved performance through the application of technology and innovation. This has been the key to Castrol’s success over the last 110 years and has led to the development of superior performing lubricants including Castrol Edge, Castrol Magnatec, Castrol GTX, Castrol Power1 and Castrol Activ – to name just a few.
Castrol’s association with cricket goes back to 1997 when Castrol India announced the launch of the Castrol Awards for Cricketing Excellence to recognize performances by Indian cricketers. Over the last decade, the Awards have recognized excellence in Indian cricket – past, present and future.
Castrol’s global involvement with innovative sponsorship began over one hundred years ago with the first ever land speed record. Since then, Castrol has been associated with winning performances on land, sea and air. Currently Castrol have a wide range of motorsport sponsorships including the Abu Dhabi Ford World Rally Team, VW Motorsport, BMW Motorsport, Castrol Honda World Superbike team and the Gresini Honda Moto GP team. Recently Castrol has extended its sponsorship portfolio to include both football, and American football with sponsorship of the 2010 and 2014 FIFA World Cups and the UEFA Euro 2012 and from 2011 Castrol will be an official sponsor of the NFL American National Football league.
MoneyGram International, is a leading global payments services company. Our core purpose is to help people and businesses by providing affordable, reliable and convenient payment services. Our MoneyGram brand is recognized throughout the world, and we are committed to bringing greater control and choice to our customers. The diverse array of products and services we offer enables consumers – most of who are not fully served by traditional financial institutions – to make payments and transfer money around the world.
Hyundai- Established in 1967, Hyundai Motor Co. has grown into the Hyundai-Kia Automotive Group, ranked as the world’s fifth-largest automaker since 2007 and includes over two dozen auto-related subsidiaries and affiliates. Employing over 75,000 people worldwide, Hyundai Motor sold approximately 3.05 million vehicles globally in 2009.
HMIL currently enjoys over 20% market share in the domestic market, while in the overseas market it supplies to over 110 countries. This makes it the largest exporter of passenger cars from India. Today, HMIL boasts of a robust 320 dealer network and more than 600 Company authorized service centers pan India. HMIL offers a full line-up of 7 models which spans all segments of the Indian automobile industry, making it a complete manufacturer with a car for every need. Hyundai’s marketing and sales network is spread across nine regions with offices in Delhi, Mumbai, Kolkata, Chennai, Chandigarh, Ahmedabad, Hyderabad, Guwahati and Lucknow with its Marketing and Sales headquarters located in Delhi.
Many such corporations have a greater turnover than the GDP of most countries. Of the 100 largest economies in the world, 52 are corporations and 48 are countries, and these corporations have sales figures between $51 billion and $247 billion. Seventy percent of world trade is controlled by just 500 of the largest industrial corporations, and in 2002, the top 200 had combined sales equivalent to 28% of world GDP. However, these 200 corporations only employed 0.82% of the global work force.
In the US, ninety-eight percent of all companies account for only 25 percent of business activity; the remaining two percent account for nearly 75 percent of the remaining activity. The top 500 industrial corporations, which represent only one-tenth of one percent of all US companies, control over two-thirds of the business resources in the US and collect over 70 percent of all US profits.
The aforesaid corporations and others are sponsoring the games, tournaments and sport events all over the world. These corporations are financing not only the extravagant sport events but local different clubs, organizations, political parties, secret agencies and even funding religious institutes though it is narrowly. These multinational corporations buy so-called presidents, ministers, politicians, fathers, Imams, journalists, lawyers, bureaucrats to plateau their positions. They can maneuver the political and social course of any country. In most cases their act of purchasing people is accomplished under various banners. Sometimes they do their jobs overtly but most of the time these jobs are done covertly. Even impartial and true media can’t them as the transactions are done slyly. It happens not only in poor countries by dint of pro-rich laws but also in rich countries like the US. The multinational corporations which contributed to electoral funds for Obama, Cameroon and Sarkozy (it is alleged that he took money from Muammar Gaddafi) must have turned into pressure group after the elections in a pure democratic system. They easily pressurize the government incumbents to pave the way for their exploitation of the common people in the name of business and contracts.