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Economic Importance

A major part of our work is economic evaluation of the importance of sport at city, national or state level.

The methodology we use is widely recognised as the best for economic impacts related to sectors of the economy. Indeed, it was for work in this area that the Cambridge economist Richard Stone was awarded the 1984 Nobel Prize.

Our method and work is totally transparent, ensuring a transfer of knowledge to any institutions working with us.

Previous work

Our international work has included

  • Economic impact of sport in the Republic of Ireland
  • Economic impact of sport in Malaysia

And we've carried out national work including

  • Economic impact of football in Greater Manchester
  • Economic impact of sport in the UK
  • Economic impact of sport in England
  • Economic impact of sport in Scotland

The resulting outputs are mainly in terms of

  • consumer spending on sport
  • employment generated by sport
  • gross value added (GVA), approximately corresponding to the sum of profits/surpluses and wages/salaries (a definition equivalent to GDP)

How we define sport

The definition of sport in our analysis corresponds to the Vilnius definition of sport used in the EU, ensuring compatibility to past research.

The main aspects of sport definition include

  • clothing and footwear
  • participation sport
  • health and fitness
  • spectator sport
  • sport tourism and travel
  • boats
  • sports equipment
  • sport gambling
  • sport publications
  • sport TV and other media

The seven sectors of the sports economy

National income accounting provides the framework for the suggested analysis, consistent with the National Accounts. It allows for a division of the sports economy into these seven sectors.

Consumers – including the personal or household sector. This shows mainly sport-related expenditure, like spending on sports clothing and footwear.

Commercial sport sector – including sports goods manufacturers and retailers. We classify companies such as Nike and professional football clubs in this sector. We also include a section of the media where associated products or services are produced, such as sport TV and publications.

Commercial non-sport sector – including suppliers for the production of sport-related goods and services. This sector includes companies that don't provide a sport product, but assist through the supply of inputs or revenue for production – for example, a bank sponsoring a sport organisation. The advertising revenue received by the club represents a flow from the commercial non-sport sector to the voluntary sport sector.

Voluntary sector – including non-profit making sport organisations such as amateur clubs run by their participants. Identifying the income and expenditure flows towards voluntary clubs is an important element in the economic assessment.

Local government – including income from local government sport facilities, sport-related grants from central government and rates from the commercial and voluntary sector. The sector has expenses such as wages for labour (a flow towards consumers) and grants to the voluntary sector.

Central government – including taxes, grants and wages on sport-related activities. For example a person buying sportswear records two flows – one towards the government sector as VAT, and another towards the commercial sport sector for the remainder of the price.

Outside the area sector – including all transactions with economies outside the examined sector

Most of our data comes from official statistics. In the case of the voluntary sector, we conduct a survey using our standard questionnaire of economic impact.

The model is purposely structured to avoid double counting. There is no adding up of the incomes of individual sectors as they are all interdependent in a transparent way. Adding up takes place only in the cases of employment, profits and wages per sector, generating the GVA and employment estimates.

The figure above indicates the interrelationships between the aforementioned seven sectors and their interactions when producing GVA and employment in the sport sector.

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