Opec Crisis

8/8/2019 Opec Crisis

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CIBSCentre for the International Business of Sport

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 iskilling 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Honda, Kawasaki and Subaru withdrawn from motorsport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%; sportsbras 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

BadmintonE

ngland signs record-breaking sponsorship deal withYonex; rumours persist that Manchesters United and City will both

sign lucrative, record-breaking shirt sponsorship deals


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Issport 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 UKbetween 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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Issport 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 inpopularity


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Nature ofimpact

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, commercialrevenues are on the frontline


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Those who likely to suffer

The Debt Devils

The Distantly Doomed

T

he 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

infor

mation

CIBS website: www.coventry.ac.uk/cibs

Coventry University website: www.coventry.ac.uk

E-mail: [email protected]

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