Sponsorship To Overtake Gate Revenues as the Biggest Income Generator in the Sports Industry
December 9, 2011
According to financial and business advisory firm PWC, sponsorship is ready to overtake gate revenues in 2014 to become the sports’ industry’s largest income generator.
An examination into the global sports market over a period of five years between 2010 and 2015 have forecasted that sponsorship will prevail over the difficult economic climate and present a compound annual growth rate of 5.3 percent between 2011 and 2015.
By the time of the FIFA World Cup in Brazil and Sochi Winter Olympics, global revenues will have popped the $45 billion (£28.7 billion/€33.7 billion) bubble.
The report also suggests that sponsorship will maintain its status in 2015, when it should generate global revenues of $45.3 billion (£28.9 billion/€28.5 billion) in comparison to the $44.7 billion (£28.5 billion/€33.4 billion) for gate revenues, the next biggest segment.
In total, global revenues are forecasted to increase at an annual compound rate of 3.7 percent to $145.3 billion (£92.7 billion/€108.7 billion) by 2015.
Merchandising is predicted to expand from $17.6 billion (£11.2 billion/€13.2 billion) to $20.1 billion (£12.8 billion/€15.1 billion), whereas media rights are 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.
However, not everything is all change as Brazil, Russia, India and China will continue to shine above the average as the sporting calendar is jammed packed with major events in those nations. PWC predict that BRIC market revenues will rise at a compound annual growth rate of 4.5 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.