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Elite sport as a catalyst for economic growth and societal change

The sports industry has repeatedly demonstrated its ability to act as a catalyst for economic and societal development: connecting global communities, attracting inward investment, contributing gross value added, creating job opportunities and delivering positive health outcomes.

Read more about Deloitte’s Sports Economic Growth & Development Advisory practice

In 2024, a record number of global elections will take place, involving over two billion voters from 50 countries. While each country faces unique challenges, common macro forces such as climate change, geopolitics, digitization, economic growth, and prosperity impact all voters' lives. The opportunity for collaboration between the public and private sectors to address these challenges and seize opportunities, as public service demand rises while budgets shrink, is significant.

Elite sport has emerged as a powerful catalyst for economic and social growth, which can align public and private investment agendas. Despite fluctuations in the M&A market, sports investment activity remains strong and sports investors, in partnership with governments, have the potential to achieve long-term outcomes that go beyond the boundaries of playing courts, fields and pitches.

According to Deloitte’s 2024 Sports Investment Outlook, one in five investment deals struck globally with sports rightsholders in 2023 were made with UK-based organisations. In this market, we’ve seen that elite sport has a proven track record of delivering local economic benefits in five key areas:

1. Global brand profile: If harnessed effectively, sport can stimulate tourism, boost the visitor economy, and create tangible links to the communities that surround these assets. According to UK Sport, major sport events hosted in the UK in 2023 generated £373 million in direct economic impact, a 6:1 return on investment, with 93% of the British population agreeing that major sporting events raise the profile of UK cities internationally.

The UK hosts an elite group of world-renowned clubs, leagues and major sports events, with crown jewels including Premier League and English Football League (EFL) clubs. The commercial appeal of these assets provides a unique opportunity to deliver the best of a town or city to a growing international and domestic audience. And a vast range of organisations stand to benefit, with academic research for instance demonstrating a link between a reduction in university admissions following the relegation of the university’s associated Premier League team.

2. Infrastructure investment: The 2024 Deloitte Football Money League publication highlights that more effective utilisation of stadia by clubs, including on non-matchdays, supported revenue growth in the 2022/23 football season. Stadia development also stands to instigate wider returns, with Tottenham Hotspur reporting in December 2023 that the development of its stadium resulted in a three-fold growth in Gross Value Added, with the club contributing an estimated £900m of gross output to the capital's economy.

With growth as the common goal between the public and private sector, governments can work with sports investors to provide supplementary investment in infrastructure, such as transportation links and community resources. For instance, Luton Town's announcement of the club’s stadium development at Power Court came with news of the club's aspirations for this to be accompanied by a "whole new town quarter for Luton with 1,200 homes, leisure, restaurants, bars, retail and community space."

3. Regenerating communities: Sports organisations can bring communities together, improve feelings of civic pride and cohesion, and further diversify the cultural offerings of a city. Using a sports venue as an anchor, local governments can drive footfall, creating thriving and sustainable places that people want to visit and live in.

The regeneration of the Eastlands area of Manchester is a prime example of how football, and in particular stadia, can be at the heart of an area’s regeneration. Manchester City moved to the Etihad Stadium following the 2002 Commonwealth Games. Since then, the stadium has been at the heart of the area’s regeneration which has seen the development of a collection of new community education and leisure facilities, such as the National Cycling Centre and the Co-Op Live Arena.

4. Education, jobs, and skills: Sports organisations offer more than just entertainment, as they function as large corporate businesses. Further than just the athletes on the pitch, these organisations contribute to the economic growth in local markets through the hiring of back and front office staff, as well as matchday and casual working prospects. Moreover, sports organisations often engage with communities delivering education, training, and skills programmes.

Following the 2012 Olympics, the London Legacy Corporation announced the launch of apprenticeship opportunities at the Queen Elizabeth Olympic Park. Hundreds of young people have taken part with employers including construction, digital, cultural, creative and fashion businesses, with half of the apprentices being young people from the local area. More recently, Knighthead Capital Management announced that its development of the Sports Quarter in East Birmingham is expected to generate over 3,000 local jobs.

5. Health and well-being: Sports organisations’ participation programmes provide myriad benefits to the industry and wider communities. These programmes provide an opportunity for clubs to identify and develop homegrown talent, inspire local communities to engage in physical activity, and ensure high quality pitches, coaches, and competition.

For every £1 spent on sport and physical activity, £4 is generated across health and wellbeing, strengthening communities and the nation economy, according to research commissioned by Sport England. The proven correlation between increased levels of physical activity and improved health outcomes highlights the unique role that sports organisations play in helping governments to achieve positive health outcomes.

Key takeaways

For Governments: Each town or city provides a particular set of demographic drivers and growth opportunities attracting sports investors to the assets. By working together with private investors, governments can accelerate the effectiveness of public funds to increase activation opportunities for the council, engage with local and international fans, and enable community participation. Critical to success is local government leadership and a willingness to collaborate.

For Rightsholders: Investors and government bodies provide pivotal capital to support the growth of sports rightsholders and the impact of their activities. Bolstering governance structures, optimising data management and activation, while continuing to grow relationships with government and investors, where appropriate, will position rightsholders for future funding and investment considerations.

For Investors: We’ve seen an influx of investment into sport in recent years, which Deloitte expects to continue in 2024 and beyond. As super-premium and premium assets continue to change hands, there may also be opportunities for relatively low entry points in non-premium properties. Proven strategies in commercial real-estate focused investments across North America are attracting investors to explore similar synergies in new geographies. Investors are increasingly looking to European assets as a commercial growth opportunity, highlighted by the prospect to develop a new or enhanced stadium and provide social and economic incentives to the community.

For Communities: Investment into sports infrastructure across towns and cities has the potential to deliver significant benefits for individuals across the community. Improved access to sports facilities and grassroots programmes may boost community sports participation, improving mental and physical health, as well as supporting social inclusion and community connection. Life skills may also be improved for the long-term, as young people experience outstanding physical education and develop knowledge around physical activity.

About Deloitte's work in sports-led regeneration:

Led by teams spanning Deloitte's Sports Business Group, Economic Advisory, and Real Assets Advisory practices, Deloitte has advised on some of the UK's most ambitious sports-led regeneration projects.

The firm's expertise includes development advisory, securing inward investment, and evaluating the social and economic impact that sport delivers to people and places.

Deloitte's work has included advising on the development of the Queen Elizabeth Olympic Park, the Leicester City Training Ground, and the growth of the Etihad Campus, which included the expansion of the Etihad Stadium and construction of a new major arena, Co-op Live.

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