A brief comparative summary of the economic impact of sports

It’s another in a long line of sketchy analyses by yours truly, but at least one person found it kind of interesting.

Here’s the revenue generated by major professional sports in the US, taken from the Sporting News, in 2008:

  • National Football League – $6.7 billion
  • National Basketball League – $3.4 billion
  • Major League Baseball – $6.1 billion
  • National Hockey League – $2.3 billion
  • The grand total from these venerable enterprises: $18.5 billion.

    By comparison, the American Sportfishing Association estimates that recreation fishing generates over $45 billion per year in retail sales alone.

    If professional sports income grew by 10% over the last year – a highly doubtful scenario considering the state of the general economy – it would be banging around the $21 billion mark. If the indirect economic benefit of major league sports was, say, five times what the groups reported in revenue – also highly doubtful, since most of those types of estimates are made by governmental bodies vainly attempting to justify the massive public tax dollars used to bring teams to town – they’d hit the $125 billion mark.

    But then they would equal the sport fishing industry’s estimated impact on the economy.

    Right about now I would otherwise say “just saying.” But it’s a tiresome phrase. Instead I’ll ask…

    What am I missing?

    Comments

    The Professor says:

    ssshhh ….. how many more people do you want on the river not to mention empty coke cans, cnady wrappers etc

    Matt Dunn says:

    Interesting post MG. I wonder four things-

    (1) is that $45 billion correct? That is absolutely huge. Not only is it bigger than professional sports, it’s the same as Exxon Mobil profits and bigger than about 350 of the fortune 500 companies revenues.

    (2) OK, maybe it is correct, but if you were to pool every single firm in a given sector, how many would be bigger?

    (3) The sports numbers seem to just be the revenues of each team added up, e.g. NFL- http://www.forbes.com/lists/2008/30/sportsmoney_nfl08_NFL-Team-Valuations_Revenue.html

    I just added them up and they equal 6.9B. What exactly do those numbers take into account? Certainly the NFL has revenue of it’s own through licensing and why don’t apparel manufacturers, ball manufacturers, etc. get included? People other than NFL teams buy footballs and jerseys and sweatpants and trading cards. A lot more. Were they included in the sport fishing numbers? I bet they were. Surely if we included Starter’s and Addidas’ revenue or the part that is generated from sales in these four areas, it would bump things up a good bit. The bottom line here is that the market for the sports teams seems only to be the sports teams. But in reality the market for sports products is huge and a lot of this market is not covered by the teams’ individual revenues. Whereas there is nothing similar for sport fishing. There are no professionals in the same sense, at least enough of them to make a comparison meaningful. So the sport fishing numbers take the entire market.

    (4) it may be the case that sports are not great at making money, at least at the level of fortune 500 companies, but our perception of them is skewed by the fact that they are such a big part of our culture. Maybe if fishing was so much fun to sit around and watch on the weekends and every city had their own fishing team our perception of it would be more in line with the money it makes.

    @Prof – Me thinks getting outside could cure a lot of what ails this country, and I’d (cautiously) accept that tradeoff. Plus, the couch potato couldn’t make it in to some of the places we go (at least not in one piece).

    @Matt – Yeehaw…debate.

    1) Not sure about the $45 billion, but I’ve seen even bigger numbers tossed around. I’ve also heard talk from individual state folks about the revenue (and indirect) impact of sportsmans’ activities, and it always seems to run from the several hundred million mark up.

    2) There is certainly some leverage here, as sport fishing is pretty accessible to almost anyone – ASA quotes 60 million anglers nationwide – 20% of the populous. I guess you have to ask how many activities have that level of participation.

    3) My guess is individual team shares of licensing revenue are included, as is concession share at games. I believe adding the non-licensing share of team apparel and concession provider revenue, as well as advertising revenue etc. over at networks providing coverage is what would get you to that magic $125 billion mark. But I could certainly be wrong.

    4) Agreed! It’s that culture component that gives them so much pull, and I’m glad you brought it up. It’s what gives the sports teams so much political clout, and what makes it such an easy sell to the public. My point was if governments really looked under the hood, they might be more apt to pay attention to angler concerns about environmental issues, the need for improving access, etc. Anglers are but individuals, and the very nature of the sport projects solitary individualism. No high profile teams, with hoards of screaming fans.

    Why did Caesar create the games? To distract.