Show me the money
How Big is the sports industry?
Dr. Roger Best and Dr. Dennis Howard
If you do a Google Search on this question, here is a result most often provided:
“Existing revenue estimates for the global sports
industry range from $471 billion to $1.4 trillion.”
There are two problems with this answer:
(1) It is wrong and grossly underestimates global sports revenues.
(2) It provides no reference to how these number are created.
In 2018 we started with a clean sheet of paper (actually an empty Excel Spreadsheet) and answer the question above with three requirements: An estimate should be:
– Global: Include all countries, all sports and outdoor recreation
– Comprehensive: Include all aspects of fan engagement, sports products, and sports
participation.
– Measurable: It should have a structure of independent revenue components that are
measurable.
This led us to developing a sports industry model and method for estimating the size of the sports industry. Our sports industry model is hierarchical and built on 36 sports industry revenue segments which feed into 9 core areas of the sports industry. There core areas define three sports industry revenue domains – Fan Engagement, Sports Products & Sports Participation.
And as shown below sports industry revenue (size) is the revenues of these three sports
industry domains:
Sports Industry ($) = Fan Engagement ($) + Sports Product ($) + Sports Participation ($)
Fan Engagement revenues are the sum of monies derived from the many ways fans consume sports: attending sports events, watching on various sports media platforms and engaging in
mostly virtual sports entertainment opportunities. This is the money generated by sports events from direct attendance (e.g., ticket sales, parking, concessions), the sale of in-venue advertising and broadcast rights, paying fees to join a fantasy sports league and from betting on game outcomes.
Likewise, Sports Products revenues are generated worldwide by the sales of sportswear, sports equipment, and sports health products. And Sports Participation are revenues generated by memberships, use fees, rental fees, licenses, etc. produced by those engaged in sports
recreation, fitness & exercise, and outdoor recreation.
This hierarchy led us to revenue segments that were measurable, and the model shown in Figure 1.
FIGURE 1
SPORTS INDUSTRY STRUCTURE & MEASUREMENT MODEL
Figure 2 illustrates how the revenues of one of the three Fan Engagement core areas, Sports Events, are accounted for in the Sports Industry Structure & Measurement Model. As shown, the total $227 billion Sports Events revenues in 2023 were the sum of five segments (gate revenues, media rights, sponsorships, merchandise sales and venue construction). The $84.6 billion generated from the sale of corporate sponsorships was the single largest contributor of event revenues, followed by gate revenues at $70.6 billion.
FIGURE 2
SPORTS INDUSTRY REVENUE MEASUREMENT – SPORTS EVENTS (billions)
Figure 3 provides a comprehensive breakdown of the 4 revenue producing segments of the Sports Media core area and 6 segments of the largest core area, Sports Entertainment. The model combines the revenues generated by each of the three core areas to provide the grand total of the revenues generated by the Fan Engagement domain.
Our estimate of over $2 trillion in total global sports industry revenues is derived from the combined spending and investment by consumers, governments, and corporations across all three of the domains in the measurement model shown in Figure 3. The model illustrates how revenues flow upward from the 36 sports industry segments to each of the 9 core areas and ultimately to one of the three domains, representing fan engagement, sports products and sports participation.
FIGURE 3
SPORTS INDUSTRY REVENUES (2023)
To obtain a detailed accounting of our sports industry model and the total revenue for 2023, as well as a thorough analysis of the post-COVID recovery and projected performance of each core
and segment.
Please PREVIEW our Sports Industry Report (20 pages) – How Big Is the Sports Industry?