Global Sports Industry Faces $1.6 Trillion Loss by 2050, Report Warns
A recent report warns of a significant downturn for the global sports industry, projecting a loss of $1.6 trillion by 2050. Published by the World Economic Forum (WEF), this report highlights the detrimental effects of climate change and increasing physical inactivity among the population.
Key Findings of the Report
The WEF’s “Sports for People and Planet” report represents a pioneering effort to assess the industry’s economic landscape and future growth potential. Conducted with management consultancy Oliver Wyman, it evaluated insights from 125 organizations and over 130 sources.
Projected Industry Growth
- Current global sports revenue: $2.3 trillion
- Estimated revenue by 2030: $3.7 trillion
- Projected revenue by 2050: $8.8 trillion
Despite these optimistic projections, the report indicates that achieving this potential hinges on addressing two pressing issues: physical inactivity and environmental risks. Currently, only one in five young people meet the recommended daily physical activity guidelines. If this trend persists, a projected one in three adults will be classified as inactive by 2030, up from one in four in 2010, equating to 800 million fewer active individuals than anticipated.
Impact on Sports Sectors
The sectors most vulnerable to these issues include sports tourism, sporting goods, and participatory sports. These areas rely heavily on active populations and a stable environment. The repercussions of declining activity levels threaten not only major brands like Adidas and Nike but also extend to fitness professionals and golf course operators.
Environmental Threats to the Sports Industry
Climate change poses a serious risk to sports, adversely impacting both professional and grassroots levels. Extreme weather phenomena such as severe heat, flooding, and pollution severely disrupt sporting activities. Additionally, the deteriorating quality of water supplies poses risks to community sports and equipment manufacturing, particularly in Asia.
The Role of Sustainability Initiatives
To combat these challenges, the report encourages the sports sector to leverage its influence through major events to promote sustainable practices. Some notable initiatives include:
- Adidas using recycled polyester
- Decathlon expanding repair and resale programs
- Formula E’s innovative approach to electric vehicles
However, the pervasive practice of frequently updating team uniforms and inadequate efforts to limit air travel during sporting events remain significant challenges.
Economic Contributions of the Sports Industry
The report notes that the global sports sector accounts for over two percent of GDP in most Western nations and supports approximately one in 25 jobs. With an expected growth rate of 10 percent in the coming decades, driven by sports tourism and institutional investments, the industry’s future appears promising if current trends can be reversed.
Future Events and Investment Opportunities
Upcoming major sports events, including the Winter Olympics and FIFA Men’s World Cup, will attract a surge of sports tourists. There is a growing interest in “play-and-watch” travel packages for sports such as cycling and golf.
The recent valuation of the Los Angeles Lakers at $10 billion signifies the sports sector’s status as an investment asset. Various nations are exploring sports investment strategies to boost their economies, following the lead of the Gulf states.
Cautions for Stakeholders
Despite these advancements, the report cautions that the industry’s growth could stall if stakeholders and governments fail to manage resources effectively and foster environments conducive to sport. A roundtable discussion with industry leaders is set to take place at the WEF’s gathering in Davos, Switzerland, to address these challenges and strategize for the future.
