International Sport Business

Current Issues, Future Directions

Hans Westerbeek, Adam Karg

• Publisher: Routledge
• Year: 2022
• Print ISBN: 9780367312817
• eBook ISBN: 9781000591101
• Edition: 1
• Topic: Business
• Subtopic: Sport & Exercise Science
• Index: Business

International Sport Business: Current Issues, Future Directions offers a contemporary and forward-looking survey of the global sport industry, introducing the key themes, trends and critical issues that will impact decision-making and strategy in sport business in the coming decade and beyond.

Against a background of globalisation, disruption and social change, the book explores key influences on the development and commercialisation of the sport industry. It examines themes such as governance, the social role of sport, value chains and innovation, the increasing importance of data, digital technology and leadership. Every chapter includes cutting-edge case studies, commentaries, examples of best practice and interviews with leading sport business professionals, encouraging the reader to reflect on the factors that determine success in international sport business. The book also looks ahead, imagining potential scenarios for the future of sport.

Thought-provoking, underpinned by research evidence and intended to generate debate and discussion, this is the perfect foundation text for any international sport business course, and an essential guide to the future for sport business practitioners and policy-makers.

An accompanying eResource provides reflective questions for each chapter.

1 International sport business Big business

DOI: 10.4324/9780429316043-1

It is a big business alright!

International sport business … the title of this book seems to reflect the obvious—that sport is big business—but it also reflects two value explosions in a global industry that is only decades old. The first value explosion took place when traditional broadcast media (television) adopted major sport events and competitions as the battering ram to attract viewership to their free-to-air and pay television channels. The exponential growth of media revenues for sport organisations beyond North American professional leagues, where the media has collected significant revenues since the 1970s, started in the wake of the 1984 Los Angeles Olympic Games. We are in the midst of the second value explosion—ignited a few years ago when sport organisations began taking full advantage of digital production, data-driven business intelligence and digital reach.

Well-produced smart marketing using sport and sport-related engagement driven by multimedia and digital media has allowed even less popular sports to significantly increase their revenue streams. Kearney (2014) estimated that the size of the global sport industry in 2014 was US$600–700 billion, which roughly equates to 1% of the global gross domestic product (GDP). Even on applying a conservative 5% annual growth rate to a figure of US$650 billion, the value of the sport industry should approach the US$1.5 trillion mark in the mid-2020s. Notably, the growth of the sport industry outperforms the GDP growth rates of most nations (Au, 2017). The sporting goods industry, in particular, outpaces the growth of the broader consumer sector by a factor of 1.5. In other words, the explosive chain of revenue-creating activities in sport globally signifies that sport is seriously big business and will continue this trajectory for some time. An annual survey of industry professionals by PricewaterhouseCoopers (PwC) shows that they continue to expect significant sport industry growth. Of course, the coronavirus disease (COVID-19) pandemic has interrupted this growth pattern for a period.

Research case—PwC sport survey: industry projections

PricewaterhouseCoopers (PwC), like many global consulting businesses, has expanded its operations by forming specialised sport industry expert groupings. Its Swiss arm established the Sport Business Advisory team in 2012. In its most recent Sport Surveys, results from about 800 sport executive respondents in approximately 50 countries have opened a window into the global sport industry’s progress and future. This industry’s growth, in real and predicted numbers, outpaces global GDP growth. The bull markets (i.e. with larger increases in growth rate) for sport are Asia, South America and Africa—regions for which future industry expectations outpace the already impressive growth rates of the past few years. Asia was expected to grow by 5.8% per annum in 2021, Africa by 6.4% and South America by 8.6%. While growth across the next five years is expected to slow down in Europe, North America and Australasia, all those regions still deliver significant growth percentages (4.2%, 7.4% and 4.0%, respectively).

In 2021, the biggest contributing sectors across all regions were the sport marketing agencies (6.2%), the leagues and events (5.9%) and the sport technology sector (5.4%). The steepest drop (+3.6%) in the growth rate occurred in mainstream broadcast media (falling from 6.3% growth to 2.7%), as well as sport teams and clubs (from 6.6% to 5.0%). It is no surprise then that the highest expected annual revenue growth over the next five years is for betting-related rights (6.4%) and the lowest is for ticketing and hospitality (2.5%).

Three sports stand out, as indicated by the video consumption on Facebook—football, fighting (which replaced basketball) and cricket. Football and basketball are predicted to dominate growth potential and they are joined by Esports, a relatively new contender. Esports: action/adventure/shooter type games games, followed by Esports: simulated sports games, have the highest potential to grow revenues. Football is hot on their heels, followed by basketball. A peloton of seven sports—urban sports, tennis, rugby, golf, cycling, American football and cricket—follow well behind the leaders (remember, this ranking relates to their growth rate, and not their absolute popularity).

What may be threatening these phenomenal growth rates of sport? The younger generations’ other interests and consumption patterns are considered the biggest contenders to sport consumption by far. Alternative entertainment formats, free content expectations and a lack of trust in those who govern sport are also considered important threats to the success of the sport industry.

Sources: Adapted from Sports Industry: Lost in Transition? PwC’s Sports Survey 2018, by PricewaterhouseCoopers (2018); Sports Industry: Time to Refocus? PwC’s Sports Survey 2019, by PricewaterhouseCoopers (2019); Sports Industry: Ready for Recovery? PwC’s Sports Survey 2021, by PricewaterhouseCoopers (2021).

From rituals to warfare to ‘modern’ sport¹

The concept of ‘modern sport’ has been well over 200 years in the making. Each era of modern sport has distinctive social, economic and governance dimensions that differentiate them from other eras. However, the precursors to modern sport emerged from the religious and combative rituals of primitive societies. As Westerbeek and Smith (2003) explain, the worship of great men (and, unfortunately, very few women)—hunters, soldiers, leaders and athletes—was common throughout the ancient world. In Europe, Asia and the Americas, communities organised festive events to celebrate the achievements of their heroes as a means of positive reinforcement and remembrance. For example, the ancient Aztecs ‘played’ a type of ball game that reflected a 1,000-year-old ritual symbolising the struggle of light against darkness or life against death. Similar ball games developed by North American Indians evolved from this game, and the sport of lacrosse today is an outcome of this game.

Religious adulation underpinned physical competition in ancient Greece. The Olympic Games reflect these physical contests. The Olympic Games were hosted in honour of Zeus, the king of the gods of Mount Olympus. The Games were a perfect example of the social structure of ancient Greece, where separation between classes was evident, and the beauty and aspiration of young males having the perfectly tuned body was publicly celebrated (Anderson, 2009).

Following the fall of the ancient Greek civilisation, the Roman Empire crafted sport-like activities to prepare men for warfare. Aggressive expansion and nation-building were the empire’s prime agenda to achieve which it needed physically fit, disciplined soldiers. As Westerbeek and Smith (2003) note, battle-like spectacles, such as gladiatorial fighting and chariot racing, were organised. Arenas were built to stage the big events. These events also served to provide distractions in the form of ‘bread and circuses’ for the ever-increasing masses and to sacrifice the less desirable members (thieves, rapists, murderers and, later, Christians) of the Roman community. These undesirables’ reward for victory was a temporary sparing of life until the next bout. As competitors’ success grew, so too did their notoriety; further, their incentive to earn rewards strengthened. This is one of the first examples of sport turning into a profession.

By the Middle Ages, medieval life appeared to be ‘dark’ and depressing. Local activity reflected the division between those who owned the land and those working it. Separation between classes in society was apparent. The Catholic Church, in particular, manipulated games and physical contests for the purpose of worship, symbolising and reinforcing followers’ understanding of good versus evil. Much like the Roman rulers, the Church leadership understood that providing people the opportunity to play would make them less likely to revolt. As Baker (1988) explains, by the 12th century, there were numerous types of handball, football and stick-and-ball games, played according to local customs and without formal rules. Such physical contests were the precursors of many ball games played today. The ruling class was powerful, and with brute strength and military-like strategy, forced lower classes into submission by engaging them in tournaments similar to war games, such as jousts and melees. In a melee, ‘any number of men fought on each side, wielding dull-edged swords in hand-to-hand combat’. Jousting was a legacy of the equestrian activities of Roman times, with combatants charging ‘on horseback, with lances raised, down either side of a barrier in an attempt to unseat each other’ (Baker, 1988, p. 50).

The early Renaissance movement, or Enlightenment period, started in Southern Europe and was instrumental in moving people out of the Dark Ages. It changed the social, political and spiritual face of Europe. The suffocating indoctrination of the medieval Church and the power of the nobility were broken by artists and intellectuals who reasoned that the individual human being should be free to think and self-determine. They embraced the ancient Greek ideal of a united ‘body and soul’, and that being a complete human being would require working on both the mind and the body.

The Northern European Renaissance was much less exuberant and maintained stronger ties with the idea of devotion to God. The Protestant Reformation maintained a focus on the pursuit of ‘godliness’ and considered physical activity and ‘trivial’ games sinful. Despite some resistance, local activities that facilitated social gatherings became more popular in England than ever before. The Northern European Enlightenment period (1700–1800) saw the further development and popularisation of sport-like activities, such as the export of early football formats to the colonies. This also led to a shift from sport activity having functional importance to it having social value. Thus, sport became a pleasurable pastime to pursue.

For some time, the concepts of modern sport and civilised society went hand in hand. Van Bottenburg (1994) explains that although a few sports, such as football, cricket and rugby, evolved into ‘modern’ sports (with written rules and purpose-marked playing fields) in parallel with Great Britain’s Industrial Revolution, ‘real’ sports only started to form through a process of ‘sportisation’ during the mid-1900s. Sportisation occurs when local sport-like activities evolve into standardised, internationally recognised games that can be played between teams or individuals from all corners of the globe. The origins of popular modern sports and regulated sport forms can therefore be traced back to Industrial England where a societal civilising process took place (Elias, 1994). Transport infrastructure and modernised government allowed for better communication and travel, facilitating and strengthening social exchange and connectivity between communities, which previously had been all too difficult to do.

Westerbeek and Smith (2003) note that the first signs of modern sport turning into a global commodity can be observed in the movement towards appointing ‘independent’ match officials in boxing, rugby and soccer. Like much of the industrialisation of society at the time, for sport to be delivered internationally, it had to include a form of standardisation, the separation of power and the independence of rules overriding local custom and culture. Multiple modes of transport, increased media exposure and a rapidly growing population fostered the spread and depth of sport activity in the Northern Hemisphere.

In his seminal book Global Games, van Bottenburg (2001) observes that sports spread from a genesis country (centre country) to neighbouring countries (semi-peripheral countries) with close cultural links. It then spread wider to far countries (peripheral) that had cultural similarity with semi-peripheral countries. Obviously, the sports with an extended international history had a first-mover advantage as regards their popularity today.

In line with this principle of centre to peripheral spread, De Jonghe (2001) proposes a typology that best explains the make-up of the global sport system. He argues that, in principle, when a peripheral country is passive in its acceptance of an imported sport, they either embrace the external culture or are not in a position to fight it. Colonialism in Northwest Africa, in that regard, used sport as a control tool for social exclusion. Later, it became a means for selective social integration, before finally, as in Algeria, national political movements took up sport as a means of social expression and liberation (Amara, 2012). Arguably, this type of ‘cultural imperialism’ continues today in regions such as sub-Saharan Africa, Latin America and the Caribbean, where hegemonic countries like the United Kingdom and the United States (US) first introduced sports.

When imported sport is assessed critically in the context of a host culture as beneficial, neutral or non-threatening, the peripheral country’s attitude can be termed ‘participative’. Former British colonies, including South Africa, Canada, New Zealand and Australia, have embraced sports from the ‘mother country’ England that help to define them as independent nations. They have rejected other sports for these did not fit their new-found national identity. Canada, in particular, developed lacrosse, ice hockey and Canadian football as ‘new’ or hybrid sports that reflected the nation’s unique identity. Along the same lines, Australia developed Australian rules football as their own exclusive variety of football. A peripheral country’s ‘conflictuous’ response to imported sport is the result of significant cultural difference and incompatibility with the centre country’s orientation. In his typology, De Jonghe (2001) discusses situations in which countries further nurture their locally important sports (e.g. darts, speed skating and sepak takraw) in concert with the development and (non) acceptance of global sports. For example, the former Soviet Union and its satellite states initially rejected all forms of sport that were direct expressions of Western society’s capitalism. However, post-Cold War regimes in this region soon realised the value of sport as cultural and economic warfare. The main purpose was to express moral superiority. Further, they chose to refocus on other forms of sport that were represented at global competitions, such as the Olympic Games. A high medal tally at international multi-event games represented an economically and socially successful nation. For understanding the varying popularity of sport globally, an appreciation of the passive, participative and conflictuous typology is sufficient.

The following commentary examines the more recent rise of popular sport in China, the world’s fastest growing economy for the past 20 years. China and, in particular, its approach to growing its sport industry, provide a window into how national governments can deliberately fast-track the development of a sport economy via focused and dedicated strategic action.

Commentary—China’s 13th Five-Year Plan: the national sport development plan for the People’s Republic of China

By Jie Fei and Hans Westerbeek

China sits in a modest 28th position on the World Economic Forum’s 2019 list of the world’s most competitive economies. Moreover, it has only moved one place up from its position in 2008. Being modestly competitive in regard to other nations, as shown when comparing factors such as the enabling environment (e.g. infrastructure and institutions), human capital (e.g. the health and skill levels of c...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Table of Contents
• List of contributors
• Preface
• 1 International sport business: big business
• 2 Global sport business
• 3 The social impact of sport business: sport for good
• 4 Innovation and entrepreneurship in sport business
• 5 Technology, data and value creation in sport
• 6 Consumption of sport: the sport product and the buyers of sport
• 7 Distribution of sport and the media ecosystem
• 8 Governance and leadership in sport business
• 9 The future of international sport business
• Index