Review

The Global Sport Summit was held on Friday, October 23rd 2009, in the same week that the NFL made its third visit to London for the game between the New England Patriots and the Tampa Bay Buccaneers. Distinguished panellists and guests gathered to discuss important issues in the world of sport today. This review will summarise the main themes from the conference.   

Summary

The Global Sport Summit welcomed a number of high profile speakers including royalty, sports legends, sports club owners, team managers and head coaches.

Some of the key themes that emerged from the conference are:

• To continually improve, coaches need to look beyond the confines of their own game. Much can be learned from studying physical and mental excellence in other sports.
• When markets at home reach saturation point, there is always scope for growth in foreign markets. Advances in information and communications technology make it much easier to reach global audiences, but sports organisers need to ensure they make the game relevant to local fans.
• The globalisation of sport is a double-edged sword: new markets have been introduced but so too has new competition. The battle for the “entertainment dollar” is becoming increasingly fierce as audiences become more fragmented.
• While English football has been a very successful business, there is a belief among club owners and managers that the premier league is on the precipice of a big change. Representatives of the premier league are looking for more sustainable business models, such as the more co-operative business model of the American NFL.
• New media allows sports clubs and media owners to reach new fans in distant parts of the world. However, there are a couple of stumbling blocks to monetising new media: 1) streamed video is often a poor experience compared to watching a game live on a high-definition TV, and 2) the younger generation have yet to be convinced to pay for online content.
• Obesity is a growing concern the world over. Today, many young people would rather “play” sport on a video games console than take a ball to the park. It is the responsibility of sportspeople to encourage the young—and the old—to take up sport and hence lead a healthier life.
• Not only can sport help young people become active and fit, it can also help them develop confidence and discipline. More needs to be done to ensure that the children on the bottom rungs of society have access to sporting facilities as they are the ones who can benefit most from what sport has to offer.

Achieving excellence—learning from others

In striving for sporting excellence, coaches and managers increasingly look outside of their game for ideas and inspiration. Football managers borrow coaching techniques from volleyball, rugby, ice hockey and baseball. Cricketers analyse squash for tips on co-ordination, footwork and resilience, and rugby coaches study the way sailing teams interact and co-operate. One of the panelists at the Global Sport Summit commented that the carryover between different sports can provide a short-cut to physical excellence.

And it is not just the physical aspect of other sports that should be examined. Understanding the psychology of the players is as important, if not more important, than the physical side.

As coaches and managers begin to examine sport in ever finer detail, so the number of areas of expertise is growing. As a result, the number of coaches required for some sports has increased greatly. American football teams, for example, can have as many as 17 or 18 coaches.

A former NFL head coach recalled his early career when they only had a backs and forwards coach. The current list of coaches includes an attack coach, a backs coach, a forwards coach, a scrum specialist and a defence coach. In addition, they have full-time physiotherapists, nutritionists, kit experts and people with global-positioning systems to work out the exact distance a player has run and the time he ran it in.

While the panel agreed that 18 coaches may be excessive and partly a result of trying to “keep up with the Joneses’”, it was agreed that more specialism is needed as no one person can be an authority in all of the diverse areas needed to coach a team today. This is especially true for multi-faceted sports such as rugby and American football. While good coaches are not cheap, the cost of employing additional coaches is dwarfed by the fees of even a single star player.

Taking home sports abroad

As with all businesses, the business of sport is continually looking for new markets and growth. Pro-American football has found an enthusiastic new fan base in the UK. This is the third successive year an NFL game has been played at Wembley and the third successive year it has sold all 84,000 seats. NFL representatives are now discussing the possibility of holding two games a year in the UK, as early as next year.

American basketball is also tapping into new markets. A representative from the American National Basketball Association (NBA) said that they are focusing internationally now more than they ever have, and the Far East is a key market. A recent NBA game in Taiwan sold out in five minutes. China has also taken to the game with much eagerness—all of the basketball games at the Beijing Olympics were sold out. The NBA plans on building between 600,000 and 800,000 basketball courts in China over the next few years.

However, not all sports travel as well as pro-American football and basketball. NASCAR (National Association for Stock Car Auto Racing), for example, is the second most watched sport in the US after football, yet it is not that well known outside the US. While NASCAR have had exhibition races in countries such as Mexico, Australia and Japan, the organisers’ focus is on the home market where fans have been struggling to attend races as a result of the recession.

Growing a fan base outside of home markets can be a difficult proposition. It is not enough simply to expose the game to a new market and hope that enthusiasm spontaneously ignites. Most of the participants at the Summit spoke of the importance of making the game relevant to each new market and of conforming to the cultures of the territories they are moving into. 

A sustainable business model?

The globalization of sport continues. There are more sports on offer in more corners of the world—whether as live events, television broadcasts or streamed video on the internet—than ever before. While the increased choice has been good for the public, the increased competition for the “entertainment dollar” has not always been good news for sports leagues and sports broadcasters. Too much choice tends to fragment audiences.

In order to create lifelong, loyal fans, the panel spoke of the importance of enthusing fans when they are young; and the main way to create enthusiasm is to get young fans into the stadium. But, on both sides of the Atlantic, there have been complaints from fans of being “priced out of the game”.

English football clubs are delivering record profits and despite the financial crisis are still seeing full stadiums and long waiting lists. Revenue growth has continued unabated in the English football premier league, but there is concern that the business model is not sustainable. A representative from an English football team said that they are looking to the US—to the NFL, in particular—for an alternative, more sustainable business model.

The NFL business model differs from the English premier league business model in a couple of ways; firstly, NFL television revenues are divided equally among the teams and secondly, the NFL enforces a salary cap on players.

While the premier league business model has been very successful, there is belief that it is on the precipice of a big change. One of the panelists at the Summit said that there are few things the premier league does in a co-ordinated fashion, and here, English football could learn a few tricks from US sports leagues.

The owner of a US basketball team said that, in the US, there is a view that if your competitor is not doing well, then you are not doing well. The emphasis is on making sure that everyone in a league or franchise prospers. If a team plays away at a club whose stadium is in disrepair, then the experience is bad for both teams and both sets of fans. An NFL spokesperson said: “Every team in the league needs to help the other teams.”

An executive from an English football club described this cooperative approach as a “foreign way of thinking”. “Football is much more competitive,” he said. “We could learn some valuable lessons from NFL.”

Making money from new media

Newspaper circulation figures are dropping and television audiences are fragmented, thanks to the proliferation of cable TV channels. Increasingly, people get their news and entertainment online.

Broadband internet and smart phones allow rich media, such as streamed video of match highlights, to be piped directly to the consumer. Broadcast media, such as the television, is by comparison, rather crude.  With new media it is possible to speak directly to the consumer, wherever they are in the world. As one participant at the Summit stated: “We can deliver to the zip code. It’s not just carpet bombing anymore.”

With customer relationship management (CRM) systems, it is possible to finely segment an audience and offer them content that is localized. New media owners argue that a one-size-fits-all solution is no longer viable. People want content that is tailored to their needs.

New media are participative, allowing firms to develop relationships with their customers in a way that was never possible in the world of broadcast media. Many firms now use social networking sites, Tweets and blogs to talk to customers and solicit feedback. One games maker said that their developers have constant communication with their video game fans. Customers now have an active say in how products are developed and what the brand value stands for. Customers own the brand.

However, not everyone is convinced that new media will supplant television. One panelist at the Global Sport Summit said that the online experience is still far too inconsistent. Streaming technology is often unreliable and more investment is needed in back-end infrastructure. And while technology provides more “touch-points” for firms to reach out to customers, the downside is that too many touch points can dilute the offering.

Nevertheless, strong growth in sales of high-definition TV sets in the US is proof that broadcasting is not dead yet. At the moment, new media and old seem to sit comfortably side by side, evidenced by the fact that nearly one-half of Fox Sport viewers have a laptop open when watching sport on TV.

Young people are active participants of media. They are used to interacting with media, rather than being a passive recipient, and they are used to using multiple devices at once. However, the net generation—so called “generation Y”—are used to getting their content for free. The challenge of how to make money from new media is something all content owners are grappling with.

This year, a major broadband backbone was laid along the east coast of Africa, which will soon provide high speed internet access for millions of Africans. And in October 2009, China’s broadband penetration reached 99 million users. With emerging economies getting access to high speed internet connections, now is the time for sports firms to work out how to deliver content to local markets that is both relevant and good value for money. The internet is going to be an integral part of live sport. But it will be part of the mix, not a substitute.

Sport for health

The sports industry has been hit by the financial crisis, but it has fared better than most other sectors because it is an escape. People can get away from the stresses of work and daily life and get fit in the process.

A representative from a sport apparel company said that people are more body conscious nowadays and being healthy is “trendy”. He added that, as people get older, they want to stay fit for longer.

The shifting demographic in Europe is a pressing issue. People are living longer, but with old age comes ill health. Policy makers are trying to find ways to keep the elderly active so as to reduce the burden on public healthcare systems, which is already coming under strain as the proportion of old to young people increases. Keeping active by doing sport is one way to lower the burden on the healthcare system.

Another pressing health issue is obesity. This is a global problem and one that affects both developed and developing countries. There are 1bn overweight adults in the world and 300m obese. And, in the UK alone, there is more than 1m morbidly obese people. Obesity increases the risk of strokes, heart disease, type II diabetes, cancers and arthritis. This can be seen by the sharp increase over the past decade in type II diabetes in many emerging countries, especially India and China, where diets have become increasingly rich thanks to those nations’ newfound prosperity.

The increasing availability of cheap, calorically dense food has played a large role in fuelling the obesity epidemic, and so has increasing inactivity. Ironically, sport also plays a role in increasing inactivity. Instead of playing sport outside, many children opt to play it on a video game console. Likewise, many adults prefer to watch a match in the pub or at home, rather than take up the sport themselves. Sportspeople have an important role to play in reducing levels of obesity in society, especially among the young, by inspiring them to take up a sport, not just watch it on a screen.

One participant at the Sport Summit said that, after the British middle distance runner, Sebastian Coe, won gold medals at the 1980 and 1984 Olympics, the number of people joining athletic clubs in Britain skyrocketed. The vicarious power of a national hero winning at sport is not to be underestimated.

And in the US, the NFL has a programme called Play 60 to get children more active and reduce obesity. Play 60 is a youth health and fitness campaign focused on increasing the wellness of young fans by encouraging them to be active for at least 60 minutes a day. The panel agreed that more initiatives like this are needed to get young people active.

Sport as a mentor for the young

Aside from helping to tackle the obesity epidemic, sport has other benefits for the young. It gives them confidence and discipline—the discipline to work within a set of rules. Sport also teaches leadership and it helps the young understand and manage risk. More importantly, sport helps to bridge cultural and ethnic divides. It fosters a sense of community.

One of the speakers argued that sport should not be too formalized at an early age, but should be about having fun. Children should enjoy themselves, burn calories and learn to use their muscles.

Despite the globalisation of sport, there are millions of poor children who would like to play sport but don’t have access to even the most basic facilities. The panel spoke about the importance of big sporting events, such as the FIFA world cup and the Olympic Games for regenerating impoverished areas and providing much needed sporting facilities. But it is not only the physical infrastructure which is improved, but the lives of the local youths who are encouraged to volunteer.

One of the Summit participants said that people need to see sport as a value and realize that it is something that is worth investing in. Not all children that take up a sport will go on to become professional, but it is up to sports organizers to provide them with a broad range of sporting opportunities so that they can try them out and find out what they’re good at.

As sporting events become more and more expensive, one football club owner stressed the importance of having special low rates for children so that young people can also enjoy the experience of a live game. “Get someone in that stadium when they’re young and you have a fan for life,” he said.  

Conclusion

One of the participants at The Global Sport Summit spoke of the power of sport to rebuild societies and communities, especially in the aftermath of conflicts. It fills a vacuum and bridges cultural and ethnic divides, she said. In South Africa, this began with Nelson Mandela presenting the rugby World Cup trophy to Francois Pienaar in 1995. The healing and rebuilding process continues for South Africa with the FIFA 2010 World Cup. This time though, the sport event is not seen as a South African event, but an African event. When South Africa won the bid to host the 2010 World Cup, people throughout Africa celebrated.

On the back of the 2010 World Cup, the organizers have pledged their support for a campaign called 1Goal. The US$11bn project aims to provide education for the 40m children in Africa who don’t have a school to go to.

Sport, as the panelists at the Summit reiterated, has the power to transform people’s lives and to regenerate cities, countries and even continents. It has important economic benefits as well as social benefits. For the social benefits to trickle through, however, sport needs to be more accessible to the marginalized members of society, especially young people who have the most to gain from participation in sport.

Despite public complaints about cost, big sports events, such as the Olympic Games, play an important role in giving purpose and hope to young people. The organizers of the 2002 Manchester Commonwealth Games drew their volunteers from disaffected local youth. Due to the success of this strategy, it is being replicated for the 2012 London Olympics.

An organiser for the London Olympic games spoke of the emotional power of the games. When people carry the Olympic torch, they are often moved to tears. “Most other products would give their right arm for that kind of reaction,” he said.