Written by Yigit Efe Nas
Sports are one of the main activities that people can stay entertained with and be passionate about as they give both athletes and fans the competitive emotions to win. Although sport activities are unique for the fans, it is no secret that sports are also a business area that can be really profitable for the investors such as event-hosting governments or sport club owners. Likewise to other business areas, sport activities can be also utilized in order to raise profit, for no one would like to lose any chance to make money, indeed. With a growth of 4.3% since 2014, the sport business is now equal to over $500 billion although the COVID-19 pandemic affected the industry in a negative way (7,3). For most of the countries, sport business is of great importance for their countries’ economy as sports business is capable of generating as much as $700 billion annually or a 1 percent of GDP (6). Sports industry also has its own brands that can earn the most money owing to the fact that everyone is familiar with these brands such as F1, NBA, NFL, WWE, Nascar, and private sport clubs. These brands hold tremendous power that the world’s top 10 sports leagues make a total of $46.6 billion annually (2). It should be noted that sport activities can also be profitable for their financiers and entertaining for the fans at the same time.
As aforementioned, sport activities can be both profitable and entertaining at the same time; thus, lots of high-income countries spend millions just to host major sport events. For example, one of the world’s most watched sports series, F1, costs around a billion dollars per year, but in return, it makes a profit of more than 2 billion annually (1,5). Therefore, many countries and independent companies show willingness to fund the sports industry for its high economic return. Still, in some lower-income countries where poverty and other social problems are still prevalent, many citizens are concerned with the money that is spent on these sports activities. It is an understandable situation since citizens have rights and justifications to want the budget that is separated for sports activities to be spent on social issues. However, in the long-term, these activities, as stated, can be extremely profitable; for instance, last year, while economic issues were arising, in our country, Turkey, a F1 race took place in Istanbul, and within 3 days, that race weekend profited $150-200 million with more than 35.000 tourists coming from abroad just for the race (4). Another statement that people make against the money spent on sports activities is the wages that athletes get. As there is huge money raised in the sports industry, naturally, athletes get high wages that can be up to $500.000 per week in some sports. This part is up to one’s own judgment, and there is no true answer, but personally, in an industry that makes this much money, I believe that it is athletes right to get paid this much, correspondingly to their talents and the pride they are bringing to their countries.
In conclusion, despite the criticisms and interpretations, the money that is spent on sports activities, in the long-term, can return as excessive profit for the investors and countries. In this way, mainly in the places where the social problems have big detrimental effects, governments can make a finance plan and balance the money that would be spent on social problems and the sports industry in order to have more to spend with its profit. While doing this, sports activities also achieve their main goal for the fans, which is to be entertaining and unifying and not to only take place for financial purposes. For some people, the wages that athletes get can be too much compared to the other workers in the society, but this is a personal opinion which is up to interpretation.
References:
1- Christian Sylt. (2017, March 13). The $1 billion cost of hosting an F1 race. Forbes. https://www.forbes.com/sites/csylt/2017/03/13/the-1-billion-cost-of-hosting-an-f1-race/.
2- Garrett Parker. (2019, October 10). 10 sports leagues that bring in the most money worldwide. Money Inc. https://moneyinc.com/sports-that-bring-in-the-most-money-worldwide/.
3- Global sports market opportunities and strategies report 2021: Sports market forecast to reach $599.9 billion by 2025 as COVID-19 lockdowns ease. (2021, July 22). Yahoo Finance - Stock Market Live, Quotes, Business & Finance News. https://finance.yahoo.com/news/global-sports-market-opportunities-strategies-080800261.html.
4- Jamie Woodhouse. (2021, October 7). Istanbul eyes $150m boost with 100,000 crowd expected for Turkish grand prix. PlanetF1. https://www.planetf1.com/news/istanbul-150million-turkish-gp-boost/.
5- LOUIS PRETORIUS. (n.d.). How do F1 teams earn money? One Stop Racing. https://onestopracing.com/how-do-f1-teams-earn-money/.
6- Value and benefits of the Sports industry. (n.d.). The University of the West Indies. https://www.uwi.edu/uop/sites/uop/files/Value%20and%20benefits%20of%20the%20Sport%20Industry.pdf.
7- Why the sports industry is booming in 2020 (and which key players are driving growth). (2020, February 10). Torrens Blog. https://www.torrens.edu.au/blog/why-sports-industry-is-booming-in-2020-which-key-players-driving-growth.
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