IS THE RECESSION KILLING SPORT

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IS THE RECESSION KILLING SPORT?

• Professor Simon Chadwick
• Chair in Sport Business Strategy
• Director of CIBS

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Aims of the presentation

• To examine the impact the recession is having on
  sport
• To assess whether or not sport is
  recession-resistant
• To identify the impact recession is having on
  sport
• To establish whether or not the recession is
  killing sport

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• Editor of books including The Business of Sport
  Management, The Marketing of Sport, International
  Cases in the Business of Sport and Managing
  Football An International Perspective
• Editor of Henry Stewart Sport Marketing talk
  series
• Editor of Butterworth Heinemann Sport Marketing
  book series
• Former editor of the International Journal of
  Sports Marketing and Sponsorship
• Consulted with and/or advised organisations
  including FC Barcelona, Atletico Madrid, UEFA,
  International Tennis Federation, four Grand Slam
  tennis tournaments, Mastercard, The Economist,
  European Sponsorship Association
• Written for, or been quoted in/by, outlets
  including Wall Street Journal, Forbes, Financial
  Times, Business Week, Time Magazine, BBC, CNN,
  ESPN, Reuters

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Please note

• All numerical data is drawn from secondary
  sources
• For further details of these sources,
  participants are asked to directly contact the
  presenter

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The story so far....

• Honda, Kawasaki and Subaru withdrawn from
  motorsport
• Manchester United lose 56 million AIG shirt
  sponsorship
• US National Football League indicates it will cut
  workforce by 10
• Tiger Woods loses five year 8 million
  endorsement contract with Buick
• Vancouver 2010 Olympic Games takes out additional
  800 million loan to cover financial shortfall
• 2009 Indian Masters golf tournament cancelled
• Arena Football League in US cancelled for the
  season
• Liverpool FC new stadium building project put on
  hold

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But....

• In UK, following Beijing Olympics, sales of
  bicycles up 20 sports bras up 27 energy bars
  and sports drinks up 155 swimming equipment up
  36
• Superbowl 2009 TV viewership up 1 million (97.4m
  to 98.4m) advertising investment up 20 million
  (from 186 million to 206 million)
• Manchester City sold for 200million in summer
  2008
• Premier League signs new live TV rights deal for
  1.78 billion, surpassing previous deal
• Badminton England signs record-breaking
  sponsorship deal with Yonex rumours persist that
  Manchesters United and City will both sign
  lucrative, record-breaking shirt sponsorship
  deals

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Is sport in recession?

• We actually dont know because the value of the
  sport economy is not measured
• Sense that the world sport economy worth 3 of
  GDP in EU between 1 and 2 of GDP in UK
  between 2 and 3 of GDP
• General economic downturn is impacting upon sport
• Differential effects

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A geo-political dimension?

• Is this a Western sporting recession?
• Is it a global sporting recession?
• Will the recession be an international tipping
  point?
• Is the balance of sporting power shifting
  eastwards?
• Are we seeing a move away from socio-cultural and
  commercial sport?
• To nation-state sport?

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Is sport recession resistant?

• A unique product
• A superior product
• A necessity product
• A socio-culturally embedded product
• A commercially-driven product
• A nation-state product

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Consumption in crisis times

• Escapism
• Self-esteem
• Eustress
• Aesthetic
• Economic
• Entertainment
• Group affiliation
• Family activity

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Previous recessions

• Case of F1 motor racing
• 1925 season World Champions Alfa Romeo pulled
  out of F1
• 1926 French Grand Prix only three cars started
• 1927 Delage team won all four Grand Prix and then
  withdrew from championship
• 1928 motorsport infrastructure that was in place
  led to series of team start-ups
• Smaller, flexible, responsive, teams joined the
  championship
• Despite economic gloom, teams increased and sport
  grew in popularity

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Nature of impact

• Sport is not immune
• Sport is more recession-resistant than other
  industries
• Some sports more recession-resistant than others
• Some athletes, teams and clubs are more
  recession-resistant than others
• Downturn is polarising sport prospering
  minority v struggling majority
• Ticket sales, broadcasting revenues, commercial
  revenues are on the frontline

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Those who likely to suffer

• The Debt Devils
• The Distantly Doomed
• The Financially Fallible
• The Selling Slaves
• The Knee-Jerkers
• The Management Malcontents
• The High Street High-Jacked

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Those likely to benefit

• The Bling Brigade
• The Glory Givers
• The Nifty Nichers
• The Fearless Friendlies
• The Guarantee Grafters
• The Loyalty Lovers
• The Price Promoters

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Conclusions

• The recession is not killing sport
• But it is changing it
• Sport more recession-resistant than most
• Some better equipped to deal with it than others
• Some organisations will have to change or die
• Asking serious questions about way sport is run
• Changing balance of global sporting power
• Polarising sport

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• Thank you for being with us today

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Further information

• CIBS website www.coventry.ac.uk/cibs
• Coventry University website www.coventry.ac.uk
• E-mail Simon.Chadwick_at_coventry.ac.uk