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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Honda, Kawasaki and Subaru withdrawn from motorsport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]