Global opportunities for sports marketing, infrastructure and consultancy services to 2022
Author: Ardi Kolah Published by IMR Publications
This report identifies all the one-off events that need new services – e.g. sports marketing, architecture, construction, design etc - over the next 8 years. The position they currently are at in terms of supply varies – obviously some are nearly complete and don't need much – but even in these cases temporary venues/seating, lighting, event management, logistics et al is very relevant.
The report shows that there is a demand for such services internationally and in many cases developing countries are hosting events but don't have the resources/expertise to provide the services domestically. It is, therefore, necessary to buy in services. Similarly, the biggest market, Qatar, again does not have the domestic resources to fulfill its huge demand over the next 10 years and a wide variety of agencies and suppliers will be sourced internationally. The report was written with an eye for the UK sports business sector but it applies almost in toto to opportunities for Australian companies.
Evolving capabilities of sports marketing and consultancy services in the UK
Section 1.1: Description of the UK sector
This Report analysed 163 diverse businesses that collectively make up the core of UK sports marketing and consultancy services sector as well as evaluating the best possible opportunities for new business based on one-off global sports events in both developed and developing economies globally.
Out of the 163 businesses analysed, 85% (139 businesses) are privately owned, with 2% of the companies (3 businesses ) listed on the London Stock Exchange and the remainder 13% (21 businesses) are limited liability partnerships.
In the UK, the sector is made up predominately of small players (under GBP3m turnover) with a healthy tier of medium size players (GBP3m-GBP10m turnover) and a handful of large players (over GBP10m turnover). The larger players in the sector have tended to have grown as a result of the acquisition of smaller players rather than by organic growth alone and this trend is likely to continue over the next decade.
Size of the UK sector
The UK sports marketing and consultancy sector turnover is conservatively estimated to be worth GBP500-GBP750m per annum. The sector has been growing by about 7% per annum over the past five years but this growth varies year-on-year as a result of the cyclical nature of revenues in the global sports sector where big ticket events such as an Olympic Games or a FIFA World Cup tend to fall in even-years and smaller ticket events tend to fall in odd-years.
…more established markets, such as North America, do not necessarily offer the most attractive opportunities for UK sports marketing and consultancy firms compared with opportunities available in less saturated markets, such as Qatar. It is estimated that 85% of the sector value is completed in the UK, although there is evidence that the balance of UK versus international sports marketing and consultancy work is beginning to shift in favour of more international work.
On current estimates and assuming a compound annual growth rate (CAGR) of 7% over the next decade, the UK sector is predicted to be worth in excess of GBP1 billion (Table 1.1).
Table 1.1: Compound Annual Growth Rate of the UK sector* (2013-2022)
The outstanding sporting and commercial success of London 2012 Olympic Games put the global spotlight on the UK’s leadership in the global sports marketing and consultancy sector and created an environment where British firms stand a strong chance to secure a share of the lucrative work with global sports events, estimated to be worth GBP92 billion by 2015.
London is the predominant location for the vast majority of UK sports marketing companies’ headquarters , with the greatest concentration of secondary office locations being in mainland Europe and in Asia. More recently, some UK sports marketing and consultancy firms have opened offices in South America and the Middle East given the growth of business opportunities in those regions.
… the research found that the sector to be heavily male-dominated and that many companies had former sporting professionals at a senior level on their board. Since the conclusion of the highly successful London 2012 Olympic Games, many high-profile senior managers from the Olympic Delivery Authority (ODA) and the London Organising Committee of the Olympic Games (LOCOG) have taken up prominent roles within the sector.
About 80% of the sports marketing and consultancy work is undertaken on behalf of global brand owners (sponsors) with around 20% of work undertaken for sports rights holders and sports governing bodies. From the sample of 163 companies analysed, 75% offer a pure sports and entertainment service whereas 25% deliver sports services as part of their overall offerings.
Despite the tough economic climate, the sector is proving to be highly resilient and is continuing its impressive upward growth trajectory. However, sentiment in the sector tends to reflect the view that growth opportunities in the UK are sluggish in comparison with the bumper year of 2012. That said, all interviewees for this Report were unanimous in their optimism for growth and all were of the opinion that the size of the sector would double over the next decade.
Figure 1.1: UK sports marketing and consultancy sector
Sports marketing agencies and advisors
The companies and firms within this vector vary the most and tend to deliver a mix of products and services.
These companies range from full service global agency networks (such as CSM), management consultancies that work extensively within the sports sector (such as PwC), executive recruitment and head hunters in the sector (such as Odgers), law firms in sports and entertainment (such as Pitmans SK Sport & Entertainment) brand valuation consultants (such as Brand Finance), sports market research firms (such as SMG Insight/YouGov) through to medium sized sports sponsorship and PR agencies (such as PRISM), as well as much smaller sports marketing agencies with a niche specialisation (such as 4 Global).
Marketing services providers
The companies and firms in this vector tend to deliver products.
These vary in nature, such as hospitality providers (such as the Cavendish Group), athlete and events management (such as Paragon Sports Management), linguistic service providers (such as Pearl Linguistics), travel and ticket providers (such as RPMC) and team building and employee communication companies (such as Team Tactics).
Infrastructure, technology and logistics providers
The companies and firms in this vector tend to deliver products.
This group has traditionally included those that have sourced major infrastructure projects like stadium building and include construction companies (such as Carillion), are experts in digital and social media channels (such as Digital Sports Group), ticketing systems (such as IRIS Ticketing) and architect firms (such as Populous).
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