Is it all a passing fad or is it sustainable? Will Asia, for so long a sporting 'backwater', finally begin to actually make up for lost time and close the gap on the rest of the world in terms of attracting spending to the sector?
These are some of the areas covered in the latest 550-page Global entertainment & media outlook 2004-8, issued by PricewaterhouseCoopers.
The report, which covers 14 different sectors across the industry, outlined a bullish outlook for the next five years with the global industry, growing at a compound annual growth rate (CAGR) of 6.3 per cent, driven by Asia-Pacific, where a CAGR of 9.8 per cent is expected
In sport, while the trend is similar, ie. Asia is projected to be the fastest growing region at a CAGR of 7.1 per cent compared with the global average of 6.6 per cent, it is noticeable that compared with areas such as video games, where growth of 23 per cent is forecast, the outcome is perhaps a bit disappointing given the low base that we are starting from.
In dollar terms, the sports market in Asia is looking at growing from US$11.2 billion in 2003 to US$15.8 billion in 2008. Analysing this further:
- Gate revenues will rise to US$4.5 billion at a rate of 4.6 per cent per annum;
- TV rights will rise to US$3.3 billion or seven per cent CAGR;
- Sponsorships, merchandising and other revenue will grow at 8.6 per cent per annum to US$5.3 billion.
The forecast period of course includes the 2008 Olympics in Beijing, where we are expecting the region to grow at 9.2 per cent off the back of TV rights and sponsorships.
Given that boost, the remainder of the period is still rather disappointing, particularly given the overall growth rates that the region is anticipating.
I believe one reason for that is we are not seeing the enhanced interest in sport reflected in gate revenues. For example, it was hoped that the success of the 2002 World Cup would spark interest in soccer in the host countries, because people would have firsthand exposure to the world's best players.
However, there did not seem to be much of a carry-over into 2003.
There was only a modest increase in attendance at J League matches and no surge in attendances in South Korea.
Even in China, soccer attendance dropped in 2003 - perhaps the fall-out of increasing violence at matches.
Even more striking was the low attendance at the recent opening game of the 2004 Asian Cup in Beijing, which together with the appalling behaviour of the fans, prompted the head of the AFC to be quoted as saying that Beijing is unworthy of the Olympics.
Does that mean that Asians are still only 'fair weather' sports fans who are reluctant to put 'bums on seats' and therefore to enjoy the true atmosphere of a sporting event?
Or is it because there are still relatively few home-grown stars?
I believe that until the cash from sponsorship starts going back to the sports associations and schools, the much-hyped sports growth in Asia will fail to achieve true sustainability.
Given this, maybe advertisers and sponsors should be on guard.