The size of the pie
The global market for sports continues to grow, and new research says that, though it may appear to be slowing down in some areas, it is speeding up in others. Overall, the forecast for sporting goods is a robust growth worldwide to ¯303 billion by 2015. Of that amount, sports merchandising will have the relatively smallest growth of 4.1 percent over the next few years, from ¯18.7 billion to ¯22 billion.
Of course, there are many opportunities opening up internationally in the following fields: sports marketing, sports media, sports architecture and facilities mgmt, sports design, sports engineering, sports retail, sports technology ( specifically injury prevention), sports finance (from running sports teams to making sports-related businesses sustainable), sports law (the study of contracts, and so on), and sports science. As demand increases, the number of opportunities will likewise open up.
The two-pronged challenge is this: how do we increase the chances for Filipinos to work with the global leaders in those fields, and how do we recreate successful branding with Filipino-owned brands and products± The ancient local fighting weapon, the yoyo, was recently given a facelift by a Filipino designer and sold to an American company and is now used by four-time world champion Hiroyuki Suzuki, who is Japanese. The most nagging question is why doesn’t all of the revenue potential and attention redound to the Philippines.
The entire sports market is divided into four main regions: North America, Europe, Asia Pacific and Latin America. Each has its own distinct tastes in sports. Polo, for example, is an enormously popular sport in Argentina. Baseball is big in the US. The demand in those countries tends to influence demand in its neighbors. But even within those regions, the Philippines does not carry that much weight. The world’s largest sports brands admit that orders for their products in Asia are primarily influenced by China (because of its volume), and Japan (which has the greatest buying power and often dictates trends on the continent). In other words, products sold in their stores in the Philippines may not be exactly what our consumers want, but are carried by the preferences of the region’s two sports superpowers.
One challenge as the market grows is the prevalence of counterfeit products, especially in Asia and Latin America. In the Philippines, just walking through shopping centers, one can find sports shoes with all the major sporting brands on them, but with their rivals’ design. An official of a global sports brand once told this writer that the piracy even originates from their own factories in China. Apparently, unscrupulous employees work at night or on weekends, using the company’s own equipment to manufacture bootleg products with inferior materials. And it seems this practice is nearly impossible to stop.
In the last couple of decades, the largest growth area has been in celebrity sports and business brands. Tennis players of eras gone by like Henri Lacoste and Fred Perry started the trend, but it only caught on in the last quarter of a century or so with the likes of Michael Jordan wanting ownership of their own brands. Of course, golfers like Jack Nicklaus had already been there, but also received a boost as celebrity sports brands starting getting attention from the mainstream. Even broadcast giant ESP has its own major merchandising efforts.
Throughout the world, individual athletes are hailed for their ability to bring in monstrous revenues for their teams or leagues. Kobe Bryant and Yao Ming have each owned the world’s best-selling basketball ersey. As far as teams go, Manchester United outstrips everyone, kicking in at least ¯300 million worth of merchandise a year. And that is just one major soccer team. The aggregate total of major European football teams is into the billions of dollars annually.
One area foreseen to bring in the healthiest growth is television sponsorship, at an estimated 4.6 percent in the immediate future. One of the first to acknowledge the impact of television was Peter Ueberroth, who headed the Los Angeles Olympic Organizing Committee for the 1984 Summer Games. nowing he needed funds, the future baseball commissioner’s first order of business was signing a television contract. is next step was securing ¯ 200 million in television and on-site sponsorships from advertisers (the four-year partnership The Olympic Program or TOP plan was not yet in effect then), and asking them to build the venues as part of the deal. Locking in all that money made LA the first modern Olympics to end in the black.
One area which will have unprecedented growth in the next three years is motorsports, and for several reasons. One, a ma or international racing league is coming to the Philippines and will, in fact, be launched next week. Secondly, a Filipino businessman is working with a Filipino designer to create the first fully electric formula racecar which will be deployed competitively by 2015. Franchises have already been offered to 12 countries. Third, with the advent of the new, environment-friendly propulsion technology, those innovations will also be applicable to motocross, powerboating and so on. And lastly, the non-polluting engines will now allow more motorsports competitions to be held indoors.
The details in an upcoming column.