WHERE KNOWLEDGE IS POWER Phil Ruthven, Chairman Sporting Future 2013 Melbourne Convention Centre 11 April 2013 Mega trends The Challenges and Opportunities

WHERE KNOWLEDGE IS POWER

Phil Ruthven, Chairman

Sporting Future 2013Melbourne Convention Centre

11 April 2013

Mega trends The Challenges and Opportunities

Facing Sport in The Future

Topics

1. The Role Of Sport

2. Australia in the 21st Century

3. Sport Participation

4. Money in Sport

5. Household Spending on Sport

6. So?

1.The Role Of Sport

The Many Faces Of Sport Sport encourages health and fitness It builds relationships and team spirit It can transcend race, religion, class and income It nowadays transcends physical disabilities It is an opportunity for philanthropy and volunteerism It builds international understanding & friendships It encourages competition (personal, inter-personal , inter-team)

It replaces wars and conflicts, with peace (as does trade)

It is fun in its many forms It is an activity that can pick up the disadvantaged For several hundred thousands it is a career & income

Sport is Big Business in Australia

Over 500, 000 participate in the inputs, activities (including volunteerism), socialising and derivatives (betting, media etc) of sport, over and above the direct participation of sportspeople, exercisers and spectators.

Revenue in 2012/13 is forecast to be $49.7 billion (or $66.3 billion with an imputed value for volunteerism). This will be 1.2% of the nation’s $4.3 trillion revenue and the value added contribution will be 2.0% of the nation’s $1.5 trillion GDP

Growth is forecast at around 2.7% pa over the 5 years to 2018-19

Some of the big players(revenue based)

Tabcorp $ 1.6 billion Tatts Group $ 0.7 billion WATAB $ 0.3 billion AFL $ 0.5 billion ASC $ 0.4 billion Cricket Australia $ 0.2 billion Tennis Australia <$ 0.2 billion NRL <$ 0.2 billion

2.Australia In The

21st Century

Some Economic Perspective

World’s 30 Largest Economies 2012 (E)

World’s 228 nations US$ 82.8 trillion

Mexico 2.1%S. Korea 2.0%Canada 1.7%Spain 1.7%Indonesia 1.5%Turkey 1.3%Australia 1.2% 17thIran 1.2%Taiwan 1.1%Poland 1.0%

UK G

erm

any

3.8%

11th – 20th Nations 14.9%

Brazil

15.4% ChinaItaly

France

Russia

18.8% USA

Purchasing Power Parity (PPP) terms

India

Rest of World(200 nations) 15.1%

Japan

5.5%3.0%2.9%

2.8%2.7

%2.2

%

5.8%

21 - 30 th Nations 7.1%

IMF/IBISWorld 23/08/12

Argentina 0.9%Netherlands 0.9%Saudi Arabia 0.9%Thailand 0.8%S. Africa 0.7%Egypt 0.6%Pakistan 0.6% Colombia 0.6%Malaysia 0.6%Nigeria 0.5%

Australian Index of Consumer Sentiment2 months progressive to March 2013

Source: Westpac-Melbourne Institute (IAESR), IBIS estimates 13/03/13

1972

1973

1975

1976

1978

1979

1981

1982

1984

1985

1987

1988

1990

1991

1993

1994

1996

1997

1999

2000

2002

2003

2005

2006

2008

2009

2011

2012

2014

2015

2017

2018

2020

60

65

70

75

80

85

90

95

100

105

110

115

120

125

130

135

Year commencing June

Recession Level

Happy 65% of last 40 years 73% of last 20 years

USA Index of Consumer Sentiment2 months progressive to March 2013

1978

1979

1980

1982

1983

1984

1986

1987

1988

1990

1991

1992

1994

1995

1996

1998

1999

2000

2002

2003

2004

2006

2007

2008

2010

2011

2012

2014

2015

2016

2018

2019

2020

25

35

45

55

65

75

85

95

105

115

125

135

145


Recession Level

Source: Conference Board Consumer Confidence Index 20.03.13

Happy 42% of last 33 years

UK Index of Consumer Sentiment2 months progressive to February 2012

1972

1973

1975

1976

1978

1979

1981

1982

1984

1985

1987

1988

1990

1991

1993

1994

1996

1997

1999

2000

2002

2003

2005

2006

2008

2009

2011

2012

2014

2015

2017

2018

2020

45

55

65

75

85

95

105

115

125

135

145



Recession Level

OECD EC Indicator 20.03.13

NZ Index of Consumer Sentiment2 months progressive to January 2013

1972

1973

1975

1976

1978

1979

1981

1982

1984

1985

1987

1988

1990

1991

1993

1994

1996

1997

1999

2000

2002

2003

2005

2006

2008

2009

2011

2012

2014

2015

2017

2018

2020

45

55

65

75

85

95

105

115

125

135

145



Recession Level

Source: Roy Morgan ResearchIBIS estimates 22.01.13

The World’s Economic Regions In 2012Share of World GDP (ppp basis)

2012 World GDP, $US 82.8 trillion

C&S America

6.6%

North America

22.5%

W&C Europe20.7%

EasternEurope

4.0%

Asia Pacific

29.7%Africa 4.0%

ME5.5%

IndianS-C

7.0%

IMF/IBISWorld 29/09/12

Global Change

As 2010 began: the Asia Century had arrived (Asia Pacific + Indian

subcontinent), supplanting the size of the USA that had supplanted the British Empire a century earlier

By 2016: India has overtaken Japan’s economy (in 2012!); China has overtaken the USA. Brazil has overtaken the UK and French economies Mexico and South Korea have overtaken Italy Indonesia overtakes Australia (in 2012), Canada, Spain

By 2025, or earlier: The Asia Pacific region is not only bigger than North

America (USA, Canada, Mexico) and W&C Europe (mainly the EU) as it is already, but is bigger than both of them

Asia Pacific RegionGDP ppp terms 2012

*Korea 6.8%

Australia 3.9%

Singapore 1.3%

Vietnam 1.3% NZ

0.5% Myanmar 0.4%

Cambodia 0.1%

Laos 0.1%

PNG 0.1%Other 0.1%

50.4% China

Japan 18.7%

Philippines 1.7%

HK

1.5%

Tai

wan

3.7%

Indonesia 4.9%

Malaysia 1.9%

Others 3.9%

*North Korea 0.2% South Korea 6.6%

25+ nations

$US 24.6 trillion GDP (ppp terms)

Thailand 2.6%

Wikipedia/IBISWorld 29/09/12

1960

1961

1963

1965

1967

1968

1970

1972

1974

1975

1977

1979

1981

1982

1984

1986

1988

1989

1991

1993

1995

1996

1998

2000

2002

2003

2005

2007

2009

2010

2012

2014

2016

2017

2019

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

Australia’s Economic Growth Annual real GDP growth (%) progressed in quarters to December 2012 (and forecast to September 2018)

36 qtrs. 34 qtrs 34 qtrs 33 qtrs 38 qtrs 33 qtrs?

36 qtrs ?

Source: IBISWorld: 08/03/13

Average long business cycle is 34 quarters (81/2 years)

Years, ended June

Forecast

Australia’s Standard Of Living GrowthGDP /capita @ F2011 constant prices 1788-2012

SO

L (

2011

pri

ces,

$’0

00

IndustrialAge

05

101520253035404550556065707580859095

10017

8017

9018

0018

1018

2018

3018

4018

5018

6018

7018

8018

9019

0019

1019

2019

3019

4019

5019

6019

7019

8019

9020

0020

1020

2020

3020

4020

5020

6020

7020

8020

9021

00

Hunting Age

AgrarianAge

Infotronics Age

Industrial Age

Year, ended JuneIBISWorld 09/10/12

Manufacturing, Constructionand Utilities (electricity, gas & water) dominate

AgricultureMining,

Banking, Commerce

Service industries and IC&T

Hunting, trapping, fishing,crafts, religion

Enlightened Age

Imbedded intelligence,

Neural network programs

More electronic “guardian angels”New technologies

1 2 3 4 5 6 7 8 9 10 11 12 13

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Note: At market prices to 1940, at factor cost thereafter Source: N.G Butlin, ABS & IBISWorld

1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 2050

Importance of Industries Shares of GDP by Industry Division, 1800-2050

180

0

182

0

184

0

186

0

188

0

190

0

192

0

194

0

196

0

198

0

200

0

202

0

205

0

AgricultureMining

ManufacturingUtilitiesConstruction

W’Sale TradeRetail Trade Transport, Postal

Media & Telecom

Finance & Insurance

Rental, Hiring. R Estate

Dwelling O’Ship

Prof & Tech Services

Admin ServicesPublic Admin/Safety

Ind taxes less subsidies

EducationHospitality

Health & Social AssistArts & Recreation Personal & Other Serv

PrimarySector

SecondarySector

TertiarySector

QuaternarySector

QuinarySector

Some Social Perspective

Our Changing Society

Living longer More living in coastal cities More generations co-existing Changing household structures Smaller households Changing ethnic mix (Eurasian) New tribalism (less local) A stabilising divorce rate Fast rising incomes & wealth Apartment living rising Home leasing on the rise More spending on services Outsourcing tasks and chores

Rise of virtual shopping Living with leisure Living with ICT Increasing knowledge Increasing financial literacy New entertainment & sports Electronic “guardian angels” Working differently New industries/ occupations Changing spirituality Outlawing discrimination Changing politics (ideologies) Ecological sensitivity

Australian Population 1850-2051

02468

1012141618202224262830323436384018

50

1860

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

2020

2030

2040

2050

Forecasts

(IBISWorld)

Million

37.8

29.3

25.6

22.7

33.4

Year, ended June

Australia’s Broad Geographic Shift % of total

3.8 million 19.6 million 37.8 million

1901 2001 2051(F)

32%

19% 25%

Source: ABS & IBISWorld

4% 5%

64%

7%

66%

Coastal

Capital Cities

Rural (cities >30,000 )Rural (towns & shires)

5%

12%

61%

Living Longer Life Expectancy And The Retirement Age of Male Australians

18

00

18

10

18

20

18

30

18

40

18

50

18

60

18

70

18

80

18

90

19

00

19

10

19

20

19

30

19

40

19

50

19

60

19

70

19

80

19

90

20

00

20

10

20

20

20

30

20

40

20

50

20

60

20

70

20

80

20

90

21

00

0

10

20

30

40

50

60

70

80

90

100

110

120

Source: ABS, Australian Historical Statistics, IBISWorld

Rising Formal Education

Rising Retirement Age

Who would want to be retired for 30+ years in 2100; and could the nation afford it?

Female life expectancy

Australia’s Age Distribution 1866-2051

18

66

18

86

19

06

19

21

19

33

19

47

19

61

19

81

20

01

20

21

20

41

20

51

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Source: ABS B Projections 10/03/10

80+

65+

60-6455-59

45-54

35-44

25-34

20-2415-1910-14 5-9 0-4

Our many Generations In F2012

23.0 million persons

“spoilt rottens”

Federation (>87 years)

Gen Zers (<11years)

Net Generation (Y)

11-30 years

Silents 70-87 years

Baby Boomers 47-69 years

Generation X 31—46 years

27.1%

8.0% 14.1%

1.2%

“free-rangers”

“quiet achievers”

“old fashioneds”

IBISWorld 09/06/11

27.4%

22.2%

Generational Types Civics

Adaptives

Idealists

Reactives

“the thoughtfuls”

3. Sport

Participation

Work And Leisure Over Time

1788 1838 1888 1938 1988 2038 20880

100

200

300

400

500

600

700

800

900

1000

Lif

e E

xpec

tan

cy (

tho

usa

nd

s o

f h

ou

rs)

Year born

Leisure Time

Education

Sleep

Unpaid workTravel to workPaId work

46%

44%

43%

32%29%

27%23%

19.8% 15.6% 12.4% 10.4% 9.1%23.7% 21.8%

IBISWorld 25/01/12

1.4%

22.2% Paid Work

8.1% Domestic Work

2.3

%

Leisure & Recreation

Sleeping 34.7%

SocialInteraction

Other

16.7%

Hygiene & Health Care

Eating & Drinking Child care

Australians’ Time ExpenditureAdults, working week

5.4%

1.7%

Shopping Education

1.3

%

1.9%

Volunteer work 0.8%

2.5%

Travel to work

1%

Sport & Physical Recreation ParticipationBy Age Group

15-17 18-24 25-34 35-44 45-54 55-64 65+0

10

20

30

40

50

60

70

80

90

100

% o

f ag

e co

ho

rt

Source: ABS 12/06/12

Age cohort

48.2%

61.0%64.2%

65.1%68.7%69.5%

79.1%

Bush Walking

Dancing/Ballet

Yoga

Netball

Cricket (outdoor)

Soccer

Tennis

Swimming/Div-ing

Golf

Jogging/Running

Cycling/BMX-ing

Aerobics/Gym

Walking Ex-ercise

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32

Type of Activity (15+ aged Australians)

Source: ABS 12/06/12

Males

Females

Important Participation TrendsCSIRO Sports Megatrends Report

Personalised sport for health and fitness

Market pressures and new business models

The rise of lifestyle sports

Economic growth and Asian sports development

Overseas health, community and aid objectives

Demographic, generational and cultural change

4. Money In Sport

The Australian Sport Market Without volunteerism F 2013 (F)

Source: IBISWorld 04/04/13

$49.7 billion(1.2% of nation’s $4.25 trillion revenue.

Value added: 2.0% of GDP)

Social 30.0%45.3% Inputs

14.3%

Sport Activity

Derivatives

10.4%

EducationHealthCommerce: wholesaling retailing transport

BettingMedia Conferences

Sporting clubsClubs (licensed)Racing (horses/dogs)Amusement parksNature reserves

Facilities

Supplies equipment manufacturing,

construction

Administration Coaching Fitness Centres

Australian Sport Inputs Share of total basis F2013 (F)

IBISWorld 29/03/13

2.3%

Turf growing

0.2%

Horse farming

4.0%

Revenue

$ 22.5 billion

Retail Sports Clothing 6.7%

8.5% Wholesale Sports Equipment

7.1% Boat Manufactg

(and repairs)

Sports Travel Fares 9.3%

Retail Marine Equipment

Sports Education 2.7%

2.7%

Sports Medicine

Sports Transport (Private)

7.7% Recreation Construction14.2%

2.4% S

ports Equipment Manufacture

Retail Sports &

Camping Equipment 18.7% 13.3%

1

.6%

Australian Sport ActivityWithout Volunteers F 2013 (F)


Revenue

$ 7.11 billion

Administration 49.3%

70.0%

Coaching

18.3% Fitness Centres

Cricket

7.3%

Facilities & Venues24%

5.3% Football

3.7% Tennis

2.3% Indoor

Golf 1.7%Ski Lifts 1.3%Other 2.4%

Australian Sport SocialisingF 2013 (F)


Revenue

$ 15.0 billion

Sport Clubs

LicensedSporting Clubs

Nature Reserves

& Parks

51.1%Horse & Dog Racing 13.4%

19.4%

12.0%

Amusement Parks

4.1%

Australian Sport DerivativesF 2013 (F)


Revenue

$ 5.2 billion

Sports Betting

Conferences/Exhibitions

5.8%

64.0%

Print (news/mags) 16.1%TV (FTA & Pay) 11.8%Radio 2.3%

Sports Media 30.2%

Adding an imputed volunteerism value

The Australian Sport Market F 2013 (F)


$66.3 billion(1.6% of nation’s $4.25 trillion revenue.

Value added: 2.4% of GDP)

Social 22.6% 33.9% Inputs

35.7%

Sport Activity

Derivatives 7.8%

EducationHealthCommerce: wholesaling retailing transport

BettingMedia Conferences

Sporting clubsClubs (licensed)Racing (horses/dogs)Amusement parksNature reserves

FacilitiesAdministration CoachingFitness CentresVolunteerism

Supplies equipment manufacturing,

construction

70% Volunteerism (imputed wages value)

Australian Sport ActivityF 2013 (F)


Revenue

$ 23.7 billion

Facilities 7.2%

Volunteerism (imputed)

Administration

14.8%

70.0%

Cricket 2.2%Football 1.6%Tennis 1.1%Indoor 0.7%Golf 0.5%Other 0.5%Ski Lifts 0.4%

Fitness Centres 5.5%

Coaching 2.5%

5. Household Spending On

Sport

$ 1287 billion ($143.000 per household)

H’Hold durables 2.8% Motor vehicles 1.8%Other 0.7%

Capital Related

16.3% Non-durables

5.4% Durables

Taxes(& social

contributions)

4.4%

14.0%

Depreciation 5.9% Dwell/Propty Interest 5.3% Consumer Debt Int 0.8%Unincorp. Interest 0.6%Transfers 0.5%

Australian Household Expenditure Year to December 2012

Hospitality

Rent1 13.0%

13.1%

Food 6.4% Alc.& Tobacco

2.2%Clothing 2.0%Utilities 1.7%Veh. Operation 3.0%Other 1.0%

Education

3.5%

Other Services

Communicns.1.5%Fares2.0%

Fin. & Ins. Serv. 7.6%

6.5%

Health

Note: 1 includes imputed rent (home ownership)

Source: ABS5206/IBISWorld

2.8%

Mobili

ty

Savings 7.2%

(& other dwelling costs) 3.9%

2.3% Entertainment(Gambling 3.4%)

Changing Household Expenditure% of total basis

6.913.2

7.4 7.9 10.06.6

1.26.6

9.3

10.314.7 13.9 10.9 15.4

11.9

13.91.0

2.0 3.9 5.1 5.9 6.5

6.8

7.68.0

7.0 6.07.9 10.1

11.2

12.6

13.0

1.5

3.3 7.16.5

6.36.6

8.5

6.6

2.5

3.0

6.75.9 5.1

4.45.3

4.5

3.5

3.0

3.03.4 3.6

3.54.5

6.4

7.8

10.6

9.7 8.5 7.26.5

6.3

5.4

54.0

36.230.3 26.4

23.3 20.020.7

16.6

2.06.8 7.3

10.713.8 15.0 16.3 13.7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.3 4.8 14 30 118 360 543 1253 $ billions

1900 1950 1960 1970 1980 1990 2000 2012

Taxes (direct)

Non-durables

DurablesHealth & Education

HospitalityEntertainment/RecnCommunications/faresOther services

Rent

Finance & Ins Serv

Capital Related

Savings

Household Outsourcing In The New Age1 F2012 (E)

$292 billion$33,020 per Household

($633 per week)Source: IBISWorld 09/10/12

28.3%

11.0% Meals

Entertainment & Recreation

Other 2

2.4%

12.7%

Tourism

Financial 23.3% Services

Health Services 11.9%

Child Care 3.4%

Maintenance/Cleaning 3.5%

Note: 1 Spending on services, new since 1965

Hair/beauty 1.4%

EntertainmentRecreationGambling

Clubs

Transport

Accommodation

Miscellaneous

LegalServices

1.4%

Note: 2 Baby sitting, Pre-school educationM/V hire and maintenance,

gardening and many others

Household Spending On Sport Share of Total (%), by Quintile, F2012(E)

20%

4% 4% 4% 6%

20%

5%

9% 10% 8% 6%5%

20%

12%

16% 18% 22%18%

13%

20%

20%

24%27% 26%

22%30%

20%

62%

47%41% 40%

48% 48%

4%

Source:IBISWorld 11/06/12

H’Hold Net Gross Total Sport Fitness Spectating Number Wealth Income Sport Eqpt. & Health Fees

Richest

Well Off

Middle

Struggle

Poorest

6. So?

Some of the Challenges

As this Century unfolds, how do we maintain creativity in sporting products and their delivery?

How do we, incentivise and individualise sport to an increasingly ageing, sometimes indifferent and pluralistic society?

How do we reach the low income or otherwise disadvantaged segments of our society with adequate sport, exercise and fitness?

What should Australia’s role be in the Asia Pacific to promote sport and its individual, social and international benefits?

RuthvenASC

To download this presentation go to: www.ibisworld.com.au

Enter details here to download presentation

Documents

WHERE KNOWLEDGE IS POWER Phil Ruthven, Chairman Sporting Future 2013 Melbourne Convention Centre 11 April 2013 Mega trends The Challenges and Opportunities