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IS THE RECESSION KILLING SPORT?. Professor Simon Chadwick Chair in Sport Business Strategy Director of CIBS. Aims of the presentation. To examine the impact the recession is having on sport To assess whether or not sport is recession-resistant

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is the recession killing sport

IS THE RECESSION KILLING SPORT?

Professor Simon Chadwick

Chair in Sport Business Strategy

Director of CIBS

aims of the presentation
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
slide3

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
please note
Please note
  • All numerical data is drawn from secondary sources
  • For further details of these sources, participants are asked to directly contact the presenter
the story so far
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  • Honda, Kawasaki and Subaru withdrawn from motorsport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
slide6
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
is sport in recession
Is sport in recession?
  • We actually don’t 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
a geo political dimension
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?
is sport recession resistant
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
consumption in crisis times
Consumption in crisis times
  • Escapism
  • Self-esteem
  • Eustress
  • Aesthetic
  • Economic
  • Entertainment
  • Group affiliation
  • Family activity
previous recessions
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
nature of impact
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
those who likely to suffer
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’
those likely to benefit
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’
conclusions
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
further information
Further information
  • CIBS website: www.coventry.ac.uk/cibs
  • Coventry University website: www.coventry.ac.uk
  • E-mail: Simon.Chadwick@coventry.ac.uk