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The power of sports
Today’s start of the World Cup will showcase Russia to the world well beyond the thousands of football fans who have travelled there to witness the matches that will be taking place over the next month. Already, it is being described as the costliest football competition in history with Russia expected to have spent US$13.2 billion by the time the tournament ends.
Football fans alone are expected to add some US$3 billion to the Russian economy during the course of this World Cup.
Organisers have predicted that the total economic impact of the World Cup could be as high as US$30.8 billion by 2023. It certainly yielded benefits for the host city when it was staged in Los Angeles in 1984 and that edition is widely regarded as one of the most successful and profitable in recent history.
A more recent sporting event, the London Olympics, generated US$5.2 billion in revenue.
All this illustrates the extent to which major sporting events on the scale of the World Cup attract global audiences and generate multiple revenue streams for organisers and host countries. The money from gate receipts, merchandise sales, sponsorships and licensing agreements, not to mention sums paid for television rights, amount to billions of dollars.
However, the bulk of this revenue doesn’t necessary end up in the coffers of the country’s hosting these mega sporting events. According to report by the Economist, the International Olympic Committee (IOC) takes more than 70 per cent of television revenue from the games—a significant increase from the four per cent collected between 1960 and 1980.
FIFA, the governing body for football, generated almost US$5 billion in revenue from the 2014 World Cup, with approximately half of that money coming from television rights.
It is significant that these sums are guaranteed to the world sporting bodies even through they contribute nothing to the costs of staging these event.
On the other hand, data shows that while host countries enjoy some short-term economic bump due to temporary jobs, as well as increased spending on goods and services in the run up and throughout the staging of the contest, medium to long-term gains are not substantial—if there are even such gains.
Herein lies some important lessons for T&T where sport tourism was identified by both the current and previous governments as a key sector for economic development.
Indeed, there is a great deal of money in sport and it goes well beyond what is earned from global events. Consider the extent to which the value of some teams seem almost the exceed the economies of some nations, or the huge sums earned by star athletes well beyond their winnings in the form of endorsements and other financial opportunities.
However, based on this country’s small size and limited sporting and accommodation infrastructure, hosting an event of the scale of the World Cup is not even a remote possibility. T&T can—and has—hosted a smaller version, the FIFA Under-17 World Championship in September 2001. It was described then as an acid test for the country and all aspiring small host nations and, yes, there were significant costs incurred in preparing for the event.
For that tournament, four FIFA-standard stadia—three in Trinidad, one in Tobago—with a total seating capacity of 37,500 were constructed. Several small grounds were upgraded for use as practice pitches, as was the already existing Hasely Crawford Stadium with new seating and a flood-proof playing field.
That event was touted then as a golden opportunity for international exposure, yet here we are almost two decades later not able to really quantify the dollar and cent benefits, if any, that came from hosting that tournament.
The one tangible was the addition of those four stadia, part of an increased stock of sporting facilities—recently expanded to include a new National Cycling Velodrome, National Aquatic Centre and the Brian Lara Cricket Academy, which hosted last year’s final of the CPL T20 Cricket—all now available for sporting events.
However, simply having such facilities doesn’t mean that all is in place for sport tourism.
The sticking point for T&T might be in development and proper maintenance of other necessary infrastructure such as hotels and efficient and reliable transportation networks, roads, telecommunication, airports and other facilities. Proper medium and long-term planning is key and development objectives must be properly identified and pursued.
Already in place, however, is a National Sport Tourism Policy which identifies steps for “development of a range of niche tourism products to maximise the economic benefits of tourism.” This is under the purview of the Ministries of Sport and Tourism, the Tobago House of Assembly and various implementation agencies.
The policy is very expansive on the possible benefits, stating:
“Economic benefits may include revenue generation from the increased demand for hotel accommodation, transportation services, food and beverage, entertainment, television and media coverage, advertising and health and medical services.
“Moreover, sport tourism can help reduce the level of poverty in communities through the development of small- and micro- business enterprises and the up-skilling of community members to welcome, host and serve the sport tourism visitor. Sport tourism can also contribute to other forms of tourism such as ecotourism and community based tourism. Ecotourism tour packages can be developed and promoted amongst sport tourists. Similarly, communities have the opportunity to promote authentic cultural and heritage products to their visitors.”
All this sounds good on paper. The true test will be in implementation.
Seeing the sector in full operation might not be too far off, if we are to draw anything from the fact that Finance Minister Colm Imbert spoke about it in his 2018 budget presentation, underscoring the Government’s commitment to boosting that sector and sports in general as part of the economic diversification thrust.
Imbert said the Government planned to appeal to the private sector and to citizens to expand their support for sporting activities on a sustained basis, by attending events or financing activities and programmes, “in order to play their part in this national effort.”
Over the next four weeks, during your viewing of matches and other World Cup-related events, see it also as an example of a mega sport tourism event where the thousands of visitors now converging on Russia are enjoying more than just football matches. Not only is Russia on show but its capacity as a destination for visitors is being put to the test.
The billions of dollars that the Vladimir Putin administration invested to host this event could yield benefits if that nation continues to attract visitors and comes out of World Cup 2018 as an attractive venue for other major events, sporting or otherwise.
For T&T, while the chance to host a World Cup is unlikely, this nation is just weeks away from hosting the 2018 CPL T20 final.
Having signed on host those finals for the period 2017-2020, the Government has committed to annual expenditure of $ 6.7 million —half being paid to CPL in cash, with the remainder for local services, including the cost of the Brian Lara Stadium, ground transport, hotel, police and fire services and other necessities.
The country earned $23 million in revenue and garnered 37.6 million in viewership worldwide from the 2017 edition and expects even greater financial benefits this time around and for the duration of this agreement with the CPL
Experiences gained from these events will indicate whether there is indeed a bright future for this country in sport tourism.
For now, though, let’s just all enjoy the World Cup and witness the power and influence of sports.
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