The Economic Importance of Sport in Wales - Sport Wales

Employment in SportTable 4 shows sport-related employment for the years1998 and 2004. Employment statistics in the report arecalculated by using sport related wages and averagesalaries for each sector of the sport economy. It shouldbe noted that, since the last report, the employmentfigures for 1998 have been revised downwards becauseof the availability of new information about thegambling sector which has cast doubt on assumptionsmade about the 1998 employment statistics.Sport employment increased from 19,400 in 1998 to23,200 in 2004 representing a 20 per cent rise. Thebiggest improvements are in education, sports facilitiesand the commercial non sport sector with growth ratesranging between 45 per cent and 25 per cent over theexamined period.Table 4: Sports-related Employment (thousands)1998 2004Commercial non sport sector 8.9 11.1Voluntary sport 2.0 2.0Sport retailing 3.0 3.4Spectator clubs 1.2 1.2Sports facilities 1.8 2.4Education 1.1 1.6Other 1.4 1.5Total 19.4 23.2Comparison with 1998Table 5 provides a comparison of the three mainindicators of the sports economy (Consumerexpenditure, Value added, and Employment) for theyears 1998 and 2004. On the basis of sportsparticipation, sports gambling and TV markets growth,the share of sports related consumer expenditure hasreached the 2.3% level. This is below the UK average of2.6%. However Wales outperforms the UK average interms of the share of sport related value added (1.8%)and employment (1.8%) in the economy.Table 5: Main Indicators (£million)1998 2004Consumer expenditure 539 707Percentage of Wales total 2.2% 2.3%Equivalent UK statistic 2.3% 2.6%Value added 531 704Percentage of Wales total 1.7% 1.8%Equivalent UK statistic 1.5% 1.6%Employment (thousands) 19.4 23.2Percentage of Wales total 1.6% 1.8%Equivalent UK statistic 1.4% 1.6%ConclusionsThe results of this survey emphasise the importance ofsport to the Welsh economy. Not only does sportgenerate a significant amount of consumer expenditure,value added and employment, the relative importanceof these factors in the Welsh economy is increasing. Itwill be interesting to track comparative statistics overthe next five years at a time when the profile of sport inWales will be increased by major events such as theRyder Cup in Newport, the England v Australia testmatch in Cardiff and the London Olympics.6 sportsupdate No.64 May 2008

The Economic Importance Of Sport In WalesFurther ReadingThe following references should be of interest to thosewho wish to explore this area further. They are arrangedin two sequences: those specifically relating to Wales,and those with a broader remit. Copies are available torefer to in the Sports Council for Wales InformationCentre.Wales References(2002) Raising the profile: major sporting events andWelsh regional development, Welsh EconomicReview, Spring 2002, 10-11Despite its inability to close the GDP gap to the rest ofthe UK, or to produce enough entrepreneurs or smallbusinesses, Wales does lead the UK in its ability toattract globally significant sporting events. The shortand long term economic impacts of such events aretherefore subjects of some importance.(2002) Welsh Economic Research Unit Conference,Welsh Economic Review, Autumn 2002, 5-14.In May 2002, the WERU held its 10th annual conferenceand the theme was 'Flexing Welsh Muscle: Sport andEconomic Development'. Following the conference,speakers were invited to provide a summary of theirpresentations which are published in this article. Includespapers on sport and economic regeneration, the UKmotor sport industry, the economic value to Wales ofhosting the Ryder Cup, and rugby in the community.Henley Centre for Forecasting and Sports Council forWales (1990) Sport and the Welsh economy: a studyby the Henley Centre, Cardiff: Sports Council for Wales.This study is the first attempt to quantify the economicinputs, outputs and flows resulting from the existenceof sport in the economy of Wales. The principal aimhas been to provide a snapshot of the role of sport inthe economy and thereby to raise general awareness ofthat role.Institute of Welsh Affairs and David, R (ed) (2007) Sportand economic regeneration: measuring andmaximising the benefits for Wales, Cardiff: Instituteof Welsh AffairsContains presentations from a Conference on Sport andEconomic Regeneration held by the Institute of WelshAffairs in late 2006. Includes papers on: the economicreturn to regions of new stadia and big events; achievingimpact through sport; getting benefits from theOlympics; the Ryder Cup and its importance to Wales.Segal Quince Wicksteed Limited, Wales Tourist Boardand System Three (2000) Rugby World Cup 1999:economic impact evaluation, summary reportProvides a summary of an evaluation of the tournamentcommissioned by the Wales Tourist Board. Theevaluation centred around a programme of researchwhich was undertaken before the event to establish abaseline and in October/November 1999 to gatherevent-related information.Snowdonia-Active (2004) The active economy: thevalue of adventurous outdoor activities to NorthWest WalesAims to establish the contribution of the adventuretourism industry to the local economy of the area withinthe Snowdonia National Park as well as the widereconomy of North West Wales.Sports Council for Wales (2000) The economic impactof sport in Wales: 1998, Cardiff: Sports Council forWalesThis is the fourth study to be undertaken looking at theeconomic impact of sport in Wales. It aims to provide asnapshot of the role and significance of sport in Wales.Sports Council for Wales (1995) The economic impactof sport in Wales, Cardiff: Sports Council for WalesThis is the second study to be undertaken looking at theeconomic impact of sport in Wales. It aims to provide asportsupdate No.64 May 2008 7

The Economic Importance Of Sport In Wales"snapshot" of the role and significance of sport in theWelsh economy, highlighting changes that have occurredbetween 1988 and 1994 and assessing the implicationsfor the future of the sporting industry in Wales.Sports Council for Wales (1990) Sport and the Welsheconomy, Cardiff: Sports Council for WalesSummarises the results of a study of sport and theWelsh economy which was the first attempt to quantifythe economy inputs, outputs and flows resulting fromthe existence of sport in Wales.Welsh Institute of Rural Studies and Midmore, Peter(2000) The economic value of walking in ruralWales, Aberystwyth: Welsh Institute of Rural AffairsThis study, which draws on research work in Wales andScotland, shows that 4,800 jobs and £132 million ofincome are generated by walking in Wales.General ReferencesCouncil of Europe and Jones, Huw (1989)The economic impact and importance of sport:a European study, Strasbourg: Council of EuropeLooks at the impact of economics on sport in Europe,sports contribution to national economies, and some ofthe implications for policy makers.Crompton, John L (1995) Economic impact analysis ofsports facilities and events: eleven sources ofmisapplication. Journal of Sport Management,January 1995, 14-35Many sports events and facilities are subsidised eitherdirectly or indirectly by investments from public sectorfunds and there has been an increased use of economicimpact analysis to support public subsidy. Many of theseanalyses report inaccurate results and this paper presentsand discusses 11 major contributors to the inaccuracy.Gratton, Chris, Dobson, Nigel and Shibli, Simon (2000)The economic importance of major sports events: acase-study of six events. Managing Leisure,January 2000, 17-28This paper reports the results of an economic impactassessment of six major sports events held in the UK in1997. The results indicate the wide variability ineconomic benefits as well as the difficulty sometimesencountered in predicting what these benefits will beprior to the staging of an event. An attempt is made todevelop a typology of major sports events in terms oftheir potential to generate significant economic impact.Gratton, Chris and Taylor, Peter (2000) Economics ofsport and recreation, London: E.& F.N. SponCovers a key part of sports management and sportsstudies courses, and gives particular emphasis to therole and importance of the commercial sector in sportincluding the economics of: the sports goods industry;sports sponsorship, major sports events, professionalteam sports; and the relationship between sport andbroadcasting.Gratton, Chris (ed) and Henry, Ian P (ed) (2001) Sportin the city: the role of sport in economic and socialregeneration, London: RoutledgeCities are increasingly using major sporting events andactivities to re-image themselves, promote urbandevelopment and fund economic growth andregeneration. This book looks at how sport has beenused in contemporary cities across the world, andevaluates policies, strategies and management. Key areasexamined are: sport and urban economic regeneration;sports events bidding; planning and organisation; urbansports tourism; sport and urban communitydevelopment; urban politics and sports policy.Henley Centre and Sports Council (1990)The economic impact of sport in the UnitedKingdom in 1990, London: Sports CouncilThe main aim of this study is to provide a "snapshot" ofthe role of sport in the economy and thereby to raisegreater awareness of that role. The overall structure ofthe study is provided by the system of national accounts.Henley Centre for Forecasting and Sports Council (1991)Consumer spending on sport-related goods andservices in the United Kingdom, London: SportsCouncilExamines consumer expenditure on sport-related goodsand services as a relatively self-contained segment ofthe sports industry in order to gain some sense of thegrowth of the industry.Henley Centre for Forecasting and Sports Council (1989)The economic impact and importance of sport intwo local areas: Bracknell and the Wirral, London:Sports CouncilThis study focused on the local economic impact ofsport, looking at the economic contribution of thesports sector to the local economy, particularly thecontribution to the local employment base.Kesenne, Stefan (1998) Cost benefit-analysis of sportevent, European Journal for Sport Management,Vol 5, No 2, 44-49The author discusses the most important conceptualerrors in cost-benefit analysis of sports events andpublic investments in sport. Overestimation of the netbenefit turns out to be the major problem.8 sportsupdate No.64 May 2008

The Economic Importance Of Sport In WalesSolberg, Harry Arne (2003) Major sporting events:assessing the value of volunteers' work, ManagingLeisure, Vol 8, No 1, January 2003, 17-27This article assesses the value of volunteers' work atsporting events, based on two different theoreticalapproaches; the Opportunity Cost Approach (OCA) andthe Market Price of Equivalency model (MPE). The OCAmethod assesses the value of the displacement of othergoods and services elsewhere in society. In addition, italso takes into account that people enjoy volunteering.The MPE model evaluates what it will cost to purchasethe equivalent services that volunteers provide atmarket prices. This article also presents an empiricalstudy from a major sporting event: the 1999 World IceHockey Championship.Stabler, Mike and Ravenscroft, Neil (1993) The economicevaluation of output in leisure services, Reading:Department of Economics, University of ReadingThe intention of this paper was to investigate an aspectof the economics of public leisure provision, namely theevaluation of non-financial service output. The authorsuse a case study to demonstrate to what extent thelocal authority attempts to measure output, and in whatform, as an indication of its effectiveness in achieving itsdesignated goals.UK Sport (1999) Major events: the economics,London: UK SportProvides an overview of the economic impact associatedwith the staging of major sporting events.UK Sport (2004) Measuring success 2: the economicimpact of major sports events, London: UK SportPresents an overview of the findings from 16 economicimpact studies of major sports events staged in the UKsince 1997.Wilson, Robert (2006) The economic impact of localsport events: significant, limited or otherwise? A casestudy of four swimming events, Managing Leisure,Vol 11, No 1, January 2006, 57-70;It is widely recognised that sports events can act as acatalyst for economic development and urbanregeneration. Much has been made of the potentialeconomic benefits of hosting major sports events, andresearch in the UK has in general focused on theeconomic impacts of sport events such as the 2000 FloraLondon Marathon, 2001 World Snooker Championshipsand the 2001 World Half Marathon. However, while allof these studies have focused on so called 'major' eventsthis study examines much smaller ones.sportsupdate No.64 May 2008 9

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The Economic Importance Of Sport In WalesAppendixAppendix 1 – Statistical SourcesSources of data included in the Model included:• Consumer Trends• Travel Trends• Family Spending• Regional Trends• Annual Business Inquiry• New Earnings Survey• Sport Council for Wales Annual Report• Regional Accounts• Leisure and Recreation Statistics• General Household Survey• National Travel Survey• Housing & Construction Statistics• National Accounts• BBC Annual Report and Accounts• UK Markets• HM Customs and Excise Report• Monthly Digest of Statistics• Financial Statement and Budget Report• Horserace and Betting Levy Board Report• Government’s Expenditure Plans• Survey of Football Clubs Accounts – Touche Ross• BSkyB Annual Report• Labour Trendssportsupdate No.64 May 2008 11