Updated: Aug 21
Written by Kaelo Moeti
The global sports industry, which is worth roughly 450 million euros, is said to be growing faster than the global GDP rates around the world. The combination of infrastructure, rights owners, sponsors and live events all accumulate to one complex, yet profitable business environment, known as the Sports Industry.
This industry has potential in all facets as entrepreneurial initiative yields to things like subscriptions for games (paper view) to events organizing. There exists a consistent craving in society for competitive sport and in this exists countless entrepreneurial opportunities. The international nature of events such as the Olympics and World Cup brings many innovations for marketing, infrastructure and merchandise.
A prominent example is South Africa’s 2010 World Cup which yielded a train system created solely for the transport towards stadiums and tourist destinations. FIFA made an astounding $4.8 million in revenue from the Brazil 2014 World Cup and the majority of that revenue came from selling television and marketing rights (Ozanian, 2014). The consistent nature and support of these international events create endless jobs and opportunities for investment and exposure.
The sporting industry is most profitable in BRICS nations (Brazil, Russia, India, China and South Africa) and developed markets like North America. The reason behind such a profitable industry would be the nature of economies. South Africa and Brazil, both being developing states, generate more revenue from agriculture and mining than from manufacturing. In essence, labour-intensive physical work. Football amongst other sports is a labour intensive skill that can be harnessed and improved relatively easily. The developed economies like North America and parts of Europe have profitable sports industries due to sponsors such as Adidas, Nike and Sony and the sale of related merchandise.
The industry’s consistent increases in revenue can mostly be attributed to the rise of televised broadcasting of sporting events, which has led to an increase in advertising and merchandise sales. The influence of televised sporting events has led to an upsurge of brand sponsorship deals. In the North American sports market, it is said that media rights and sponsorship fees will experience the sharpest increases in revenue by 2020.
However, while the industry has been boosted by TV viewership, the popularity, relevance and also viewership is on the decline. The focus has instead been shifting towards other broadcasting media platforms and tech brands such as Twitter and YouTube. These media platforms have found a niche in the convenience of social media for sports fans. The ease of access and minute by minute updates has made social media a go-to for highlights and updates on the move.
For example, Twitter recently struck a live-streaming deal with the NFL, while YouTube locked a similar agreement in place with BT Sport to stream the final of the UEFA Champions League (Au, Timonhy, 2017).
The use of traditional media will still prove vital as not everyone has access to social media. However, there exists more opportunity for individual branding on the company’s’ behalf to maintain target audiences. The growth of sport has been heavily linked to viewership on different media platforms and developing countries should take note of possible investments.