Sport is facing a winter of discontent like no other, with the most poverty-stricken about to feel the full chilling blast of the credit crunch. A report launched last night gives warning that the most vulnerable clubs and sports will suffer the worst of the downturn, while the traditional super-rich survive on their earnings from around the globe.
Professor Simon Chadwick, the director of the Centre for the International Business of Sport at Coventry University, says that the traditional big sports - football, cricket, rugby union, golf, athletics and Formula One - will keep making money because much of their cash is generated in markets in the Middle and Far East, which have been least affected by the financial crash.
But he predicts that sports with a lower fanbase and less television appeal, such as darts, bowls, hockey, badminton, swimming and the winter sports, are in for a tough time. In his report for Weber Shandwick Sports, the marketing company, Chadwick says: “Consumer spending is down and we have seen a rise in unemployment, so while sport's emotional appeal makes it one of the most recession-busting industries around, it is not immune to the knock-on effects of the global financial meltdown. Size does matter in sport.
“The sports suffering the most from the downturn receive little mass-media coverage and therefore have limited appeal to sponsors and other commercial partners. Where crowd sizes are already low, the credit squeeze is placing even more pressure on the smaller professional clubs and sports and that means they need to do more than ever to survive or prosper.
“While smaller sports and teams are in the midst of a bumpy ride, those deriving their support - financial or otherwise - from across the world are likely to remain strong, if not even grow in strength. The most recession-resistant sports will be ones that best stir national pride but also enhance their global appeal.”
Chadwick's words are resonating in the lower reaches of football, where some of the smaller clubs are struggling to stay afloat. Bournemouth, who were rescued from bankruptcy in August, were trying to explain to fans yesterday why a team from the Inland Revenue raided the club shop to take away items. Club executives said that it was a misunderstanding, but the raid sent fresh shivers down the spines of supporters who, until recently, feared that the Coca-Cola League Two club might not survive.
In the Championship, Deloitte, the accountants, have been instructed to find buyers for Sheffield Wednesday, one of England's oldest clubs, while others, such as Leicester City, who are in League One, are making six-figure losses on an annual basis. While the top clubs rake in cash from abroad, Chadwick says: “Others are facing more difficult times, especially in lower divisions, including clubs with smaller crowds, lower match-day revenues, short-term or low-value sponsorship deals, minimal TV coverage and high debts against their asset base.”
But Chadwick says that sport should see the credit crunch not only as a challenge to survive “but also an opportunity for the smartest sports, teams, companies and investors.” He adds: “It is forcing us to examine how things can be better run, better managed and better organised, for a brighter future for sport.”
Caught in the crunch
* Football is more than £3billion in debt, according to Lord Triesman, chairman of the FA
* Even before the credit crunch, three Football League clubs - Luton Town, Bournemouth and Rotherham United - went into administration last season
* Formula One, one of the richest sports, is facing weeks of dispute, with teams seeking to slash tens of millions of pounds from their costs
* Key sponsors have been hit in the credit crunch: the Royal Bank of Scotland, which sponsors rugby union's Six Nations Championship and the Williams Formula One team; AIG, Manchester United's shirt sponsor, and XL, the Iceland-backed airline and West Ham United's shirt sponsor, which went bust
* It is bad news for the London 2012 Olympic Games as sponsors hold fire on spending until the credit crunch eases
(Source: Timesonline.co.uk)
