Sport Business Sport Economics


Written by Nigel Botchey

Sport makes a huge contribution to the lives of individuals, to the economy and society. Indeed, research has shown the impact that the sports industry plays to diversify and stabilise economies across the globe.

In a time where prominent African nations are deliberating and strategising on how they can transform their economies in the midst of falling commodity prices, rising unemployment and societal issues, many would be forgiven for dismissing sport as a catalyst for development on many fronts.

40,000 fans packed into a 25,000 capacity stadium to see Nigeria v Egypt in AFCON 2017 Qualifier

Demographics of nations have changed; interests and skills of citizens are far more diverse than ever before. Finance ministers and economic think-tanks rush towards traditional methods of developing the economy, it is pivotal to wonder if they might have missed an opportunity due to the enormous impact of sport.

Africans are passionate about sports and proud of their sporting achievements.

Everyone takes an interest, from the politician to the bread seller, no matter who you are, when great sporting events are on, everybody stops and becomes one relatable thing – a fan.

Fans enjoy every part of the activity, from pre-event antics and mind games, to the post-match commentary. Sport is the one thing (after basic commodities and needs) that people will participate in. They will rush home from work, and if they cannot get home, they will stop off at the nearest chop bar to catch the event.

Sport is emotional, and because of this, it often transcends logic. Fans will often spend large amounts money and time and this is where all stakeholders involved need to start taking notice and accurately strategise on how to tap into the consumer market and create a product that people would not only want to watch but actively participate in.

The grassroots sports activities also assist in stimulating an economy through the employment it adds. Regular local events mean, the local small and medium sized enterprises (SME’s) will benefit from the services needed such as catering, cleaning and accounting to name but a few.

A thriving sports industry also sheds spotlight on the nation and assists in changing and enhancing the image of the nation. After Ghana participated in the 2006 World Cup, the international community took more notice of the opportunities in the country. This led to various investment and collaboration.

The Sports economy is made up of many sub-sectors from grassroots to professionals that contribute to the development of the industry. These sub-sectors create jobs that are not directly linked to sports. Many SMEs will get a major boost from a booming sports sector through services and goods rendered by associations, participants, spectators and other stakeholders. In addition to this, a functioning sports industry increases physical and mental health amongst the local population. A healthy and socially active nation is paramount to ensure sustained development and prosperity, as people will be in better shape and be less of a burden on the health system (cutting long term medical costs).

The facts

In 2013 the UK sports industry was worth a whopping £23.8 billion in earnings to the economy and held just under 1 million jobs. These figures were taken from three industries that capture most jobs in sports:

1) Operation of sports facilities

2) Activities of sports clubs

3) Other sports related activities.

If you removed the sports industry from figures in the UK many sectors would suffer major jobs loses.

  • Wholesale and retail trade would lose nearly 110,000
  • administrative and support service industry would lose 82,000 and
  • human and social work would lose 70,000.

This example is simply to outline the role of the industry in a national economy, as you cannot compare the strength of the Nigerian and UK economy.

Nigeria has an estimated population of 191 million, whereas the UK 65 million, and if the British economy has benefited from it and managed to create 1 million jobs and add £23 billion to their economy, the impact on the African nation will be quite vast.

Hence, the sports industry could offer Nigeria an increment in productivity, activeness. The Government and private investors must therefore make a conscious effort to thoroughly delve into the sports market to uncover its full potential.

Nigeria + Sports = Game changer for the economy

Sport is an industry that provides jobs and training opportunities at all levels, unlike banking or oil & gas where you need specialist training. Nigeria could become a major player in the sports industry both nationally and internationally. Once an industry is formed and produced properly, the different sports can then look to distribute the TV rights in other corners of the globe.

Hosting major sporting events nationally, regionally and internationally also give economies a major boost outside the initial outlay. From increased tourism, and infrastructural developments that assist the wider economic activities, sports really plays its part in being a catalyst for development. Due to the influx of foreigners, governments are forced to put in place infrastructure such as transportation, reliable electricity to make the event a success and increase the reputation of the nation. Events could help speed up projects that would increase productivity in the country that were in the pipeline.

Sponsorship and media money coming into sports provides the opportunity to increase the financial capacity of institutions, clubs and athletes. £1.3 billion in tax was paid to the HMRC by footballers in England in 2012. The number of people with sport related jobs is estimated to have reached over 440,000, that’s 2.3% of all employment in England. In 2010, sport and sport-related activity generated Gross Value Added (GVA) of £20.3 billion, 1.9% of the England total. These statistics should be taken as an index of what a great economic contribution sport is for a national economy.

Sports is becoming so important to nations now that even China has started investing heavily in its industry, in the hope of increasing its worth to £800 billion by 2025.

Is it time we start taking our sports industry seriously? I am of the firm belief that Nigeria can be one of the main hubs for sport not only in Africa but the world. South Africa have done it and benefited through targeted policies and strategies such as sports tourism, why not somebody else? The industry, if done right, could be worth billions to the economy.

About the author

Nigel Botchey

Nigel Botchey is the Group Managing Director of the sports management agency, LiveOne Sports based in London and Ghana. They conduct work in both Europe and Africa, in helping to grow and develop sports in Africa.

LinkedIn: Nigel P.K Botchey

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