Sports play an important role in the progress of any nation and society. Nowadays sports are not merely physical activity but it also turned into a business industry. Sports and sports-related companies and brands earning huge profits recently. In this modern age, sports have developed into a tool to create nationalism and unity in the nations. The athletes and sportsmen are turned to be national heroes and countries are recognized by a flavor of particular sports like cricket playing nation or a football playing nation. Sports play a positive role in uniting people of society from different social backgrounds. Sports also teach people to understand and tolerate each other.
Sports as an industry
Sports have become an industry and it is expected that the sports industry will reach a value of $614.1 billion by 2022. New ideas and trends are growing all around the world. In our region first Indian Premier League(IPL) and now Pakistan Super League(PSL) are great successes. A new breed of investors appeared and Franchise cricket became popular in a short period. The fan following of these leagues is huge and owners of franchises are earning great profits. The other phenomenon of sports is that it creates a business-friendly environment. Tourists love to visit a country where people like to follow sports. The other fact that Governments earn a huge sum of money by organizing sports events like the Olympics, Cricket or Football World Cup.
Top fifteen brands of sports
Forbes Magazine in 2019 ranked the 15 biggest sports brands across the world based on total brand value in US dollars. They had included these brands on the basis (Business, Events, Athletes, and Teams).
- Nike, $36,800,000,000
- ESPN, $13,100,000,000
- Adidas, $11,200,000,000
- Gatorade, $6,700,000,000
- Sky Sports, $4,400,000,000
- Puma, $4,000,000,000
- Under Armour, $3,500,000,000
- UFC, $2,400,000,000
- YES, $1,500,000,0001
- Dallas Cowboys, $1,039,000,000
- New York Yankees, $815,000,000
- Reebok, $800,000,000
- Real Madrid, $725,000,000
- Super Bowl, $780,000,000
- Los Angeles Lakers, $674,000,000
This data is taken from the official website of “Torren university of Australia”.
This data shows that now in this modern era sports have been developed into a profitable business, nowadays companies are investing in sports to get maximum benefits. Top-notch companies are branding by sponsoring a sports event like PSL or IPL. They are also investing individual sports stars to be their brand ambassador. The trend is boosting and more and more companies are realizing that top sports stars are best suited for their commercial ads.
The concept of the sports market
The sports market is a market where sports-related business activities take place as the sale of sports services and goods. The potential of sports markets is huge and new investors are now investing in the sports industry. This market is always evolving. The phenomenon of football clubs like Barcelona, AC Milan, etc is well recognized in the world. These clubs turned football into a billion-dollar sport. The same phenomenon is now happening in cricket with the emergence of Franchise cricket. It started from India with the success of IPL, then this model is adopted by countries other countries like Australia, South Africa, and West-Indies. Now PSL is a big success story in Pakistan. English and Wales Cricket Board is also launching its league this year in June.
Growth in the sports market
The international sports market achieved a value of nearly $388.3 billion in 2020, having greater than before at a compound annual growth rate (CAGR) of 3.4% since 2015. The market demoted from $458.8 billion in 2019 to $388.3 billion in 2020 at a rate of -15.4%. The turn down is mainly due to lockdown and social distancing rules forced by various countries and economic slowdown across countries due to the COVID-19 outbreak and the actions to hold it. The market is expected to grow to $599.9 billion by 2025, and $826.0 billion by 2030, at a compound annual growth rate (CAGR) of 6.6%. This enormous opportunity in the sports market inclined companies to invest in this market to earn an exponential profit margin.
Other benefits of sports
If you use sports as a tool against diseases and different disabilities, then you can lead a joyful and happy life. Sports-related activities increase the immunity of your body. A sportsman’s body’s metabolism works properly and his ability to fight against diseases is enhanced.
Sports are also important for releasing stress in this age of hectic routines. By playing a sport you can manage your weight, the heart works properly, controlled diabetes, lower cholesterol level, lower hypertension, lower cholesterol level.
Modern research revealed that sports improve your mood and concentration. Sports-related activities like weight lifting and bodybuilding boost your self-confidence and reduce depression and level of anxiety. For children and youngsters sports are essential for their growth and development, youngsters involved in a sport having greater levels of immunity and health compared to those not participating in any game.
Those days are gone when the sport is merely a physical activity. The business entrepreneur turned it into a business entity now masses are attracted towards famous sportsmen. Even a mediocre cricketer in Pakistan earning a handsome amount of money. Franchise companies are invested millions of rupees to generate a new breed of cricketer for their team. They are also investing in different social welfare programs to boost their philanthropic image. Pakistan super League PSL-5 earned a total sum of revenue of Rs. 2,167,794,749 as per the initial unaudited accounts.
Each franchise is likely to gather Rs. 256,697,094 out of the total revenue pool for the franchises which stands at Rs. 1,540,182,564. As per the reports, the franchises have expressed concerns considering their pool is Rs. 30,000,000 less compared to last year.
These unbelievable earnings showing the sports market will grow enormously in near future.