When it comes to the economic impact of sports, there is plenty of data. Just looking at how football TV rights have evolved over recent years shows that sports – no many whether it’s football, basketball, tennis, or any other – can have a huge effect on different industries, help speed up the use of technology in all forms, and more.
Indeed, the clamour to host sporting events such as the FIFA World Cup, the Olympics and others is getting fiercer as times goes on – and the spending higher. In 1994, when the US hosted the FIFA World Cup, they spent 470 million euros on the tournament and preparing the host cities – new stadiums, hotels and other infrastructure. Less than 30 years later, in 2022, Qatar spent 185 billion euros, according to a report in Forbes.
But what exactly is the relationship between sports and the economy? And how can it be a drive for economic growth? We’ll look at these questions in more detail in this post, but if you would like to become a real expert in the area of sports and economics, you should consider studying a Master in Sports Marketing or an Online Sports Marketing Master's Degree.
The economics of sport
Much focus the economics of sport has been placed on the media, with the explosion of sponsorship, the growth of OTT and sports, and the involvement of betting companies, for example. However, sports can have an impact on economies and other sectors in different ways. Let’s take a look:
- Tourism and Hospitality: Large sports events such as the Olympics or the World Cup have an impact on other industries throughout the tournament. With an influx of tourists to the destination, the tourism and hospitality trade is boosted – hotels, shops and restaurants all benefit from the sports event. Following on from the event is also key. Many cities that have hosted the Olympics, such as Barcelona, Rio de Janeiro, or Melbourne, have built on the impact of the sports event to create an identity as a tourist destination and continue to enjoy the benefits for years afterwards.
- Local infrastructure development: While the investment in hosting a sporting event can be large, there are long-term infrastructure opportunities to be considered. Indeed, a factor more keenly considered today by organisers is the environmental impact and what will happen to sporting venues post-event. The London 2012 Olympic Games is an example of how sports helped with the regeneration of one of the more run-down areas of the city. The athlete's village was turned into private flats, the Olympic Park was turned into a multiuse sports area for the public, shopping centres were built, and the stadium was converted to a football ground now used today by Premier League side West Ham United.
- Job Creation and Industry Growth: This third point is related to the first two. With sports events having an impact on other sectors such a tourism and hospitality, the economic impact of sports events is seen by job creation both in the short and long term. In the run up to a large sports event, jobs are normally created in the construction centre. Once the event is underway, employment is created in event management, marketing, broadcasting, retail sectors and more. And the legacy of sports events is the industry growth afterwards too.
- Community development: One of the key factors that sports can have on a city is the development or take up of sports participation and enhancing social cohesion. Investments in sports facilities and programmes at the local and grassroots level contribute to the overall development of individuals, particularly the youth. Participation in sports promotes physical and mental well-being, encourages teamwork, discipline, and leadership, and helps address societal issues such as crime and substance abuse. Strong and vibrant communities contribute to economic growth by attracting residents, businesses, and investments.
Sports possess an extraordinary capacity to stimulate economic growth and development. As well as being a source of entertainment, sports can have vast economic impact in all countries – from rich nations to emerging economies. From job creation and industry growth to infrastructure development, tourism, branding opportunities, and community development, the economic benefits of sports are vast and varied. By leveraging the power of sports, governments, communities, and businesses can tap into a thriving industry that can but also drives economic prosperity in the long term.
