Sports Market Definition
The sports market consists of the sales of sports services and related goods by entities that provide live sporting events before a paying audience or entities that operate golf courses and country clubs, skiing facilities, marinas, fitness and recreational sports centers, and bowling centers.
Sports Market Size
The global sports market reached a value of nearly $488.5 billion in 2018, having grown at a compound annual growth rate (CAGR) of 4.3% since 2014.
Growth in the historic period resulted from the emerging markets growth and rapid urbanization. Factors that negatively affected growth in the historic period were unfavorable climate changes and shortages of sports professionals.
Going forward, increasing sports sponsorships, growing popularity of esports, economic growth, an increase in the number of Internet accessible devices and the emergence of multiple sports channels to capture viewership will drive growth. Factors that could hinder the growth of this market in the future are an increasing threat from home entertainment and increasing regulations on sports.
Sports Market Drivers
The Key driver of the sports market include:
Emergence Of Esports — During the forecast period, the growing popularity of esports events is expected to drive the global sports market. eSport or competitive video gaming is a multiplayer video game played competitively for spectators, typically by professional gamers. In 2017, the International Olympic Committee (IOC) declared esports to be considered as a sporting activity. In 2017, global eSport revenues reached $696 million, and they are expected to more than doubly by 2020 reaching $1.5 billion, driving the overall sports market.
Sports Market Restraints
The key restraints on the sports market include:
Doping Scandals Impact Sports – The reputation of sports is harmed when athletes get caught using performance-enhancing drugs. Performance-enhancing drugs are chemical agents that improve the athletic performance by enlarging muscles and increasing the oxygen-carrying capacity of blood. Sponsors and fans who spend large amounts of money turn away from the sport when drug-use is revealed with broadcasters rejecting to cover the event, sponsors unwilling to endorse the sport and major drops in the spectator attendance. For instance, live broadcasters and sponsors of Tour de France, an annual cycling race event, rejected to support the event after the revelation of doping cases. Doping scandals negatively affect the market with fall in the sales of tickets for the sporting events.
Sports Market Trends
Major trends influencing the sports market include:
Virtual Reality To Enhance Spectators’ Experience -Sports organizers are implementing virtual reality (VR) technology to improve the spectators’ experience in sporting events. Virtual reality generates images, sounds and other sensations that simulate a physical presence in an imaginary environment. Clubs and teams are experimenting with simulated and 360-degree environments to enhance the match viewing experience of the spectators by allowing them to have a virtual walkthrough of the stadium or the race track and view the match at different angles. For instance, the NBA game between the Sacramento Kings and San Antonio Spurs was broadcasted in VR. NASCAR has created an interactive fan area at the race tracks with the implementation of virtual reality.
Emerging Markets Are Investing In Sports - Importance of sports has risen steadily in emerging economies resulting in the increase in governments’ spending on the development of the sports industry, specifically into setting up sports infrastructure, building teams in sports and attracting large investments. For example, the plan of the Chinese government to increase the value of the sports industry in the country to $813 billion by 2025 is resulting in the flow of large investments into sports activities that include events, facilities, teams, leagues, and other programs. Similarly, for 2018-2020, the federal government of India has set aside a $262 million budget for the ‘Khelo Program’ to promote the sports industry in the country.
Opportunities And Recommendations In The Sports Market
Opportunities – The top opportunities in the sports market will arise in participatory sports, which will gain $70.17 billion of global annual sales by 2022. The sports market size will gain the most in the USA. Market-trend-based strategies for the sports market include offering mobile ticketing facility to reduce costs associated with ticketing and facilitate faster access, providing virtual reality technology to enhance spectator experience at stadiums, expanding/establishing sports businesses in emerging markets and acquiring or establishing esports teams to lay a footfall in the emerging esports industry. Players adopted strategies in the sports industry include expanding business by building new facilities in cities globally, increasing revenue sources by investing in infrastructure for training and other recreational purposes, increasing revenue by investing in new infrastructure and improving brand name and international presence, increasing revenue through increasing sponsor portfolios and merchandise sales.
Recommendations – To take advantage of the opportunities, The Business Research Company recommends the sports companies to consider adopting mobile technologies at the supply and demand sides, adding elements of entertainment to sports events, combining different sports formats to keep customers entertained, expanding in emerging economies, offering competitive pricing, partnering with big brands, and offering goods and services to women among others.
Sports Market Segmentation
The sports market is segmented by type, by revenue source and by geography.
By Type-
The sports market can be segmented by type into
- a) Participatory Sports
- b) Spectator Sports
Participatory sports had the highest growth rate of nearly 4.3% during the historic period.
Sub-Segmentation
By Type-
The participatory sports market can be segmented by type into
- a) Sports Teams & Clubs
- b) Racing & Individual Sports
Growth has accelerated in both the segments of the global spectator sports market.
By Revenue Source-
The sports market can be segmented by revenue source into
- a) Media Rights
- b) Merchandising
- c) Tickets
- d) Sponsorship
By Geography- The sports market is segmented into
- o North America
- o Western Europe
- UK
- Germany
- France
- Spain
- Italy
- Netherlands
- Switzerland
- Belgium
- Sweden
- Denmark
- Ireland
- Austria
- Norway
- Portugal
- Finland
- o Asia Pacific
- China
- Japan
- India
- Australia
- South Korea
- Indonesia
- Hong Kong
- Thailand
- Philippines
- Singapore
- Malaysia
- New Zealand
- Vietnam
- o Eastern Europe
- Russia
- Poland
- Romania
- Czech Republic
- o South America
- Brazil
- Argentina
- Colombia
- Chile
- Venezuela
- Peru
- o Middle East
- Turkey
- Saudi Arabia
- Israel
- UAE
- o Africa
- Nigeria
- South Africa
- Egypt
North America is the largest market for sports, accounting for almost 30.5% of the global market. It was followed by Western Europe, Asia-Pacific and then the other regions. Going forward, Asia-Pacific and the Middle East will be the fastest growing regions in this market.
Sports Competitive Landscape
Major Competitors are:
- • Life Time Fitness, Inc.
- • Maruhan
- • Dallas Cowboys
- • Futbol Club Barcelona
- • Manchester United Football Club
Other Competitors Include:
- • New York Yankees
- • International Speedway Corporation
- • Los Angeles Dodgers, LLC
- • Washington Redskins
- • Compagnie des Alpes
- • International Speedway Corporation
- • The Pittsburgh Steelers
