‘Prof Wallace’ writes: Economic benefits of sports

‘Prof Wallace’ writes: Economic benefits of sports
Source: Ghana | Asempa FM | Enoch Worlanyo | enoch.worlanyo@asempafmonline.com
Date: 25-04-2019 Time: 03:04:13:pm
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File photo: Joy Invitational Tournament.

Often, sports and physical activity are linked solely to the sport at schools and leisure activities, undermining their contribution to a number of other processes and activities.

For example, sports is closely linked to education, tourism, health and entertainment. Each of the above has made up a major role in the national economy. Nowadays, sports are big business. From athletes, managers, media, arenas, cities, tourism, events agencies and gambling to other sectors that make profit.

Many people love sports; thus, sports economics provides an opportunity to analyse some key economic concepts to the sports industry. Key concepts can be used to analyse and understand the role that economic incentives play in determining the behaviour of controlling bodies, leagues, clubs, players, fans, sponsors, media and government.

Sports organisations contribute to the economy through numerous markets and sources of income, including club fees and ticket sales, advertising and sponsorship, TV, and media rights, redistribution of income within the sports federations, merchandising, public support etc. Public financial support is often vital for sports but must be provided within limits imposed by law.       

This section reviews the economic benefits of sports in other countries, jurisdictions and other continents.

LATVIA

Robert Reihmanis and Toms Stanbergs conducted an economic analysis on EuroBasket 2015 championship organized in Latvia, in the city of Riga. The event generated €15,391,200 directly to the Latvian economy. Studies also showed that foreign visitors brought €10,172,600 to the country’s economy in addition, of which the majority was expenditures during the championship, as well as income from the tickets.

AUSTRALIA    


In Australia, major sporting events that attract significant international exposure are the Australian PGA Golf Championship and International Rally of Queensland. It is estimated that the Australian PGA championship generates a direct economic impact of more than $11 million per annum.

ENGLAND

In 2010, sport and sport-related activity contributed £20.3 billion to the English economy, 1.9% of the England total. The contribution to employment is even greater. Sport and sport-related activity is estimated to support over 400,000 full time equivalent jobs, 2.3% of all jobs in England as of 2010.

SOUTH AFRICA

Former South Africa sports minister, FikileMbalula speaking at a New Age briefing in Johannesburg following the release of a government report on the 2010 world cup, Mbalula said the world cup had amongst other things contributed 55.7 billion rand ($5.8 billion) to South Africaʼs economy. Mbalula also cited cases of infrastructural as evidence of the positive impact of hosting the world cup. Impacting the economy positively, Mbalula disclosed that hosting the world cup resulted in the creation of over 400,000 jobs.

There is considerable evidence of sport's role in delivering a wide variety of benefits to the communities and individuals, including economic growth. 

Sports can help increase economic prosperity, provide employment opportunities and contribute towards raising aspirations and increasing skill levels.

Sports and exercise make money! ... Health insurers have the advantage of reducing healthcare costs and the entire society benefits from sports because of reduced crime, increasing learning performance and increasing social capital. So, sports and excise are positive for the social-economic value.

For example, according to Sports England publication,  a significant proportion of the £39 billion sports contributes to the UK’s gross domestic product (GDP) comes from grassroots sport: the millions of people who buy trainers, bikes, gym memberships or pay match fees.

The UK government’s investment of £10 million in the Tour de France Grand Départ in 2014 helped unlock a £125m contribution to GDP, so the UK’s economic success is bound up with sporting engagement, and vice versa.

The economic impact of sport, how it creates jobs, promotes growth and drives exports is a fundamental part of this new strategy. The UK government stated organisations to consider not just how they contribute to the nation’s health or wellbeing, but to the economy as well, both nationally and locally.

The government also encourages individuals or organisations to set up sports project using the six steps of the framework into programme planning and implementation

  • Employability and employment
  • Sport tourism
  • Health sector savings
  • Economic value of crime reduction
  • Increased economic activity
  • Savings through prevention of public sector spending.

THINGS THEIR PROJECT COULD INCLUDE

  • Saving public money through prevention
  • Creating jobs and volunteering
  • Increasing productivity of a workforce
  • Generating economic activity (e.g. tourism, construction, events)
  • Increasing spending and/or revenues.

It’s important that Ghanaian sports authorities engage with stakeholders, to develop a strategy and deliver growth plans for the sports to benefit the nation.

EY’s Economic Advisory is a specialist team of sports economists working for clubs, administrators and tournament organisers globally. In particular, they help their clients quantify the economic and social impact of sports.

This is the results of EY assessment on the impact of Rugby World Cup (RWC) on the national economy.

  • Generated money, 2.3 billion pounds
  • Contributed to the GDP 1.1 billion pounds
  • Generated in tax277 million pounds
  • Attracted international visitors 406,000 pounds
  • Supported nearly jobs and volunteers 30,000 pounds
  • Sold over ticket 2.47 million pounds

The economic contribution of Twickenham Stadium demonstrated the wide-reaching of major sporting areas to the local economy and the wider community.

  • Contributes to direct GDP- 23 million pounds
  • Supports full-time jobs- 500
  • Generates in local taxes- 3 million pounds

According to the assessment by EY, the English Premier League contributes a lot to the economy of UK

  • Supports 100,000 jobs in the UK
  • Investment in further artificial pitches- 544
  • People engaged in community projects- 546,000
  • GDP- 3.4 billion pounds
  • Tax- 2.4 billion pounds

Reports indicate that, Brazil tops the list for football players’ export worldwide.

The 25th edition of the CIES Football Observatory Monthly Report analyses the presence of expatriate footballers in 137 leagues from 93 national associations at worldwide level. In total, 12,051 expatriates originating from 174 national associations are currently present in the 2,120 clubs studied. Brazilians are the most numerous abroad (1,202 players), ahead of French (781) and Argentineans (753).

The report also presents the main destinations for the principal exporting countries. While the main destination of Brazilians is Portugal (221 players), that of French is England (107 players). The most numerous contingent of Argentineans is to be found in Chile (106 players). Also well represented in foreign associations, English footballers mainly go to Wales (143 players) and Scotland (114).

Expatriate players are present in all of the 93 countries and 137 leagues surveyed. Their overall percentage in squads is 21.6%. The CIES Football Observatory Digital Atlas provides data on their playing time in 31 top division leagues of UEFA member associations. For more information, please contact us at football.

All the European federations have laws that protect their leagues, so if you are a non-EU player, it becomes difficult to play in their leagues.

In La Liga BBVA, a team can retain maximum three Non-EU players. The above figure drops to 2 in Liga Adelante (Second Division) whereas in Segunda Division B, it further gets reduced to 0 implying that the third division team is not allowed to hold any foreign player. Only those teams which have clawed into the league following their relegation are permitted to hold onto their offshore players until the expiry of contract.

A non-European player is entitled to apply for Spanish citizenship if he plays in Spain for at least, five years. What is more, the players coming from the ACP countries referring to the Caribbean, Africa and the Pacific, which are signatory to the Cotonou Agreement, are not taking into account against the non-EU slots owing to the Kolpak ruling.

In league 3 in Germany for instance, it is reserved solely for the nationals in the country.

FIFA

The football governing body rewarded clubs for releasing players for 2018 World Cup that was staged in Russia; Manchester City led the way with just over $5m as FIFA announced it has dished out €209m to clubs.

FIFA said 416 clubs from 63 federations received payments from the tournament revenue, with the day rate for the 736 players given at $8,530.

UEFA got by far the largest chunk of almost $158m, with English Premier League champions Manchester City top on $5.003m.

UEFA Champions League winners Real Madrid were second on $4.803m and England’s Tottenham third on $4.385m.

Other clubs like Egypt’s Al Ahli, Mexico’s Pachuca, Celtic of Scotland and Argentina’s Boca Juniors topped $1m.

CONCLUSION    

Apart from the United States of America, the highest contributor of players to the premiership is Africa; Sheyi Emmanuel Adebayor, Augustine Azuka "Jay-Jay" Okocha, Asamoah Gyan, Samuel Eto'oFils and Michael Essien throughout their football career, their combined transfer was over 300 million pounds, the money that came to Africa from their transfer was less than 3 million pounds.

The government and the football association should take it as a responsibility to make the league attractive enough to minimise the quest of locally-based players wanting to travel to play in foreign leagues. When this is done, local clubs will instead receive those monies FIFA send to their foreign clubs.

Successive governments in Ghana have paid less attention to sports because they have failed to recognise the real economic value of sports in the country.

Sports are only discussed by governments through promises of providing sporting infrastructure just to score political points. Until government and corporate bodies see the potential economic benefits of sports, sporting life in the country will always be treated like leisure and recreational activity, putting the future of a million youth in danger hence, criminal activities will be the consequence. 


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