Sponsorship to take over as biggest sports industry segment by 2014 predicts new report
Friday, 09 December 2011
December 9 - Sponsorship is set to overhaul gate revenues in 2014 as the sports industry's biggest income generator, according to new analysis by the financial and business advisory firm PwC.
A new report examining the global sports market over the five years to 2015 predicts that sponsorship will show a compound annual growth rate of 5.3 percent between 2011 and 2015, in spite of the difficult prevailing economic circumstances.
Global revenues from sponsorship will burst through the $45 billion (£28.7 billion/€33.7 billion) barrier in 2014, the year of the Sochi Winter Olympics and a FIFA World Cup in Brazil.
At this point it will also become the sports industry's biggest single component, a status it will maintain in 2015, when it should generate global revenues of $45.3 billion (£28.9 billion/€28.5 billion) versus $44.7 billion (£28.5 billion/€33.4 billion) for gate revenues, the next biggest segment.
PwC said that the "return of financial services and automobile companies to the sponsorship market" was contributing to "significant growth in sponsorship spending".
Sponsorship was likely to be of "increasing importance to most sports organisations and major events over the coming years".
Overall, global sports revenues are forecast to grow at an annual compound rate of 3.7 percent to $145.3 billion (£92.7 billion/€108.7 billion) by 2015.
Media rights are predicted to grow from $29.2 billion (£18.6 billion/€21.8 billion) in 2010 to $35.2 billion (£22.4 billion/€26.3 billion) in 2015 and merchandising from $17.6 billion (£11.2 billion/€13.2 billion) to $20.1 billion (£12.8 billion/€15.1 billion).
PwC forecasts that sports industry revenues in the BRICs – Brazil, Russia, India and China – will continue to outperform the average, as major sports events continue to be staged there, but by a smaller margin than in recent years.
Between 2011 and 2015, it says, BRIC market revenues will rise at a compound annual growth rate of 4.5 percent.
This compares with 7.7 percent between 2006 and 2010.
North America is now expected to grow nearly as fast, with compound annual growth of four percent between 2011 and 2015.
"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," said Julie Clark, head of PwC's UK sports practice.