[Assignment]: A Quick Snapshot of the Sporting Industry

Hello Class,

Though I love boxing (both as a pugilist and a spectator!) and have a lifelong adoration for the Knicks, I must contend, that I do not know much about the sporting industry and therein her complex underworkings. Therefore, as a certified geek, I did my part and conducted a bit of research — the subsequent reading is a part of my initial discoveries.

With the industry’s valuation flirting around $500bn and domestic revenues exceeding $73bn in 2019, the United States presents herself as the largest market for the sports industry. The overall sporting industry can be divided into performance and participatory submarkets.

Participatory sports fall under the prevue of fitness/recreation centers, sporting facilities, and clubs, such as PAL Boxing and YMCA clubs. While, on the other hand, the spectator submarket is — more or less — akin to sporting and viewership. Therefore managing franchises, event venues, and merchandising are part of the spectators submarket pervue. [1] Accordingly, the participatory submarket accounts for the majority of the industry’s market share, with 56% of the market. Transversely, though the spectator sports submarket is considered a minority in comparison, it is currently expected to double the economic throughput of the participatory sports segment. As a result, investors expect a 6% increase to the spectator sports segment and a 3% growth for the participatory submarket.

Similar to most industries, the broader sports industry is beholden to external/internal pressures. Commonalities include similar macro and micro-economic indicators, as-well-as the net effects obliged to an industry beholden to diverse stakeholdership. Industry stakeholders include public entities, such as municipal-funded trusts, as-well-as private B2B/B2C organizations comprising multinational brands comparable to Nike Inc and most of the sporting franchises we all know, love, and appreciate (shout out to my Knicks fans!)

The global sports market being consistent with inflation has realized an annual growth of 3.4% since 2015. [2] According to Yahoo Sports, the fitness and recreational center submarkets accounted for the most significant portion of the participatory sports segment, for a total of 72.1% industry. Per Schwarz Hall and Shibili’s assessment, sporting infastructure can be further subdivided into public sports facilities, non-profit sports facilities, and commercial sports facilities, such as municipal sponsored facilities, the PAL Boxing program, and the Yankee’s training amenities, respectively.[3]. Moreover, Spectator sports accounts for the remaining 39% of the overall sector. And furthermore, the sports segment expects to continue its upward growth trend, with the fitness and recreational center submarkets leading market share growth.

The industry proceeds following Covid-19 and therein the interminable and repeated revenue models that were implemented from yesteryear, have seemingly brought in paltry results, especially when compared to 2019’s industry-wide gross of $500Bn. Seemingly so, recent doping scandals have compounded stakeholders’ woes — leaving them concerned about the sporting industry’s future. Though online betting and continuance of the participatory industry trends remain industry cash cows, prominent stakeholders — including media outlets and corporate branding sponsors — are not pleased with the stymied cash flow, and fear their monies may produce better elsewhere.

The cash-restricted environment could likely cascade into the revision of sponsorship contracts, where contractual modifications are necessitated as a condition for not meeting performance-based criteria. [3]

Thanks for reading,

Adel Al-Aali

Sources

[1] https://www.torrens.edu.au/blog/why-sports-industry-is-booming-in-2020-which-key-players-driving-growth

[2] https://www.yahoo.com/now/global-sports-market-opportunities-strategies-080800261.html

[3] https://www.marketwatch.com/story/professional-sports-leagues-are-bleeding-billions-of-dollars-in-revenue-2020-03-18

https://www.idpublications.org/wp-content/uploads/2018/06/Full-Paper-CONTRIBUTORS-AND-STAKEHOLDERS%E2%80%99-RESPONSIBILITIES-TO-SPORTS-FACILITY-SAFETY.pdf✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign

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College Guy, Construction Worker, Curious Mind.

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Adel Alaali

Adel Alaali

College Guy, Construction Worker, Curious Mind.