By Maximilian Clarke
According to a new report by PwC looking at the global sports market, over the next five years to 2015, global sports revenues will grow to US$145.3 billion.
The industry will see an annual compound growth rate (CAGR) of 3.7 per cent due to an improved economy, a rebound in TV advertising, the on-going migration of sports to pay TV and the resurgence of financial services and automobile companies to sponsorship.
North America will remain the largest market throughout PwC’s forecasts to 2015, followed by Europe; Middle East and Africa (EMEA); and then the Asian market. Latin America will remain the smallest market. Growth in the sports market in the BRIC countries (Brazil, Russia, India and China) strongly outpaced the overall global market during 2006 to 2010, but during the next five years this gap will narrow.
“North America is still the largest market and growth rates will significantly outpace Asia Pacific and EMEA (Europe, Middle East, Africa). While the balance of power is shifting to some emerging markets which are hosting mega sports events over the next few years, the growth opportunities in the traditional developed markets are far from over.”
Latin America is projected to have the highest growth rate at 4.9 per cent CAGR, partly due to them hosting the FIFA World Cup in Brazil in 2014, followed closely by North America at 4.0 per cent CAGR.
EMEA the second largest region with $42.8bn or 35 per cent of the total global revenues, EMEA is projected to have the slowest growth rate at 2.9 per cent, which partly reflects underlying economic conditions and a reflection of the timing of major sports events, with 2010 being such a strong year in EMEA given the FIFA World Cup and 2015 being a relatively quiet year. EMEA shows the most fluctuation over the period, given the 2012 London Olympic and Paralympic Games and the Football European Championships in Poland and Ukraine and then in 2014, the Winter Olympics in Sochi and the Commonwealth Games in Glasgow. If the impact of these one-off events is excluded, the underlying growth rate is 4.6 per cent.
“What has been clear through this era of economic uncertainty is that the balance of global economic power is shifting to the East and this will help maintain the internationalisation as sports seek new revenues from the growing middle classes in the emerging nations,” said ulie Clark, head of PwC UK sports practice.
Despite the ongoing troubling economic climate, the sports industry has continued to thrive with many major sporting events proving to be more popular than ever. The popularity of these major events is supported by on-going improvements in broadcasting and technology which is allowing better quality coverage than seen before. At the same time, television companies, sports clubs, governing bodies and even the sports stars themselves, are embracing social media to engage with fans and deliver a greater intensity of experience.
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