While sailing as a sport is a tiny fraction of the total sports industry, those in the business of Yacht Racing may see growth in the next 12 months according to a new report by consulting firm PricewaterhouseCooper (PWC).
[cleeng_content id=”939756994″ description=”99 cents or 10,000 hours. The path to being an expert can be easy or hard. ” price=”0.99″]The report confirms annecdotal evidence that the global financial crisis reduced spending on sponsorship and merchandising. As sailing is not a sport that relies on ticket sales, reductions in spending in this area would have had less of an effect on the sport.
Global sports revenue from events such as tennis tournaments and soccer matches in 2009 – excluding major events such as the Olympics – fell for the first time since 2004, dropping 1.8% to $114.3 billion from $116.4 billion a year earlier.
The market is expected to pick up in 2010 and the report predicts that revenue in 2011 exceed levels prior to the economic crisis. Revenue is projected to rise to $116 billion in 2010 and to $120.7 billion the following year, according to the study.
Sailing’s largest source of revenue – sponsorship, suffered as corporations struggled to portray their spending as well considered and conservative amid criticism of companies’ high compensation and bonuses during the recession.
Julie Clark, author of the report and PwC’s U.K. Head of Sport said:
“Sponsors tended to go for shorter deals and there were less sponsors from the financial sector as entertaining their clients in sporting events wasn’t perceived as the right thing to do.”
The report highlights how far sailing has to go to maximise the sport’s revenue opportunities. Of the four key categories, yacht racing relies heavily on sponsorship, with gate revenue, media rights and merchandising absent or underdeveloped.
Luckily, sponsorship of sport will be the fastest growing revenue component by 2013.
Total sponsorship revenue is projected to grow to $35.2 billion in 2013 from $29.4 billion last year. Sales of broadcast media rights are expected to grow to $26.7 billion over the same time period compared with $23.1 billion in 2009
As a macroeconomic level, the report is good news for those looking to raise sponsorship, though competition for the money will be fierce and those looking to be funded will have to provide a clear business case for campaigns.
Strangely, the report still lumps Europe, the Middle East and Africa into one region, ignoring stark regional differences in confidence and economic conditions. Nevertheless, PwC forecast growth of 3.6% in North America over the next four years. Europe, the Middle East and Africa are expected to grow 4.1% over the same period, while PwC forecast growth of 4% and 4.3% in the smaller markets of Asia and Latin America, respectively.[/cleeng_content]