In an interview on the eve of the 5th World Conference of Ministers for Sport to be held in Berlin (Germany, 28-30 May 2013), Professor Jean-Loup Chappelet, internationally recognized for his work on the economics and governance of sport, discusses the economic impact of sport events. He stresses the importance of distributing the benefits of the biggest media sporting events to ensure the "public service mission" of sport, while recalling that the profits generated by these events are not shared with those who build facilities for such events.
UNESCO : While today’s sport is threatened by the increase in cases of fraud at international level, it seems to be difficult to talk about the business part in sports, where does the money come from and to what end is it used? The same can be said about its distribution. Should we consider sports like any other industry?
It depends on what sport you are referring to. Professional sports, that is to say the kind of sports we watch as a show are definitely a highly profitable industry with a significant revenue. It can definitely be considered as an industry like any other for as long as the established market’s rules don’t ruin what makes this kind of sports entertaining: the uncertainty of the result and the beauty of the game. Sports for all, that is to say the kind of sports we practice in daily life and that don’t call for media coverage, leads to economic activity as well, at least if we consider the equipment they require (such as shoes, clothing, fittings etc.), but the players and organizers are usually not interested. It is essential that the show business sport finances sports for all and that the elite encourages common people to participate in sport for its social and educational benefits. Therefore, sport holds a ‘public service mission’ that is delegated by the State to the local, national and international sport organizations which in turn essentially aim at fighting abuses in sport (such as doping, violence, corruption, cheating etc.) working closely with the States. The public and sport authorities need to protect a SAFE (Sustainable, Addiction-free, Fair & Ethical) sport.
How can the economic impact of sport practices and events be measured today?
For several years, there have been studies that measure the countries’ gross domestic product (GDP) accounted for by sport. In Europe, sport in the broad sense, represents 2 or 3 % of the GDP. A satellite account has been developed within the national European accounts to provide a better measure of the economic dimension of sport. The sport events’ benefits have been for a long time the subject of studies that focus on the economic impact, usually before the event and sometimes afterwards. These studies generally show significant economic impact expressed in millions of currency units and in thousands of jobs created. In fact, the bigger the investment made in an event the higher the figures and numbers are and as a result the greater the economic impact is. Cost-benefit analyses would be more useful to inform public authorities before they are to take a decision to support the organization of an event or not. These analyses provide information on whether the value of the total benefits of a given event (including immaterial benefits that can be monetized today) exceeds the overall estimated costs (including immaterial ones).
Would a more public way of managing sport investments and its economic impact be possible?
It is difficult to imagine such a situation. Actually, the major sport events call for significant investments from public authorities that basically make profit of these investments for many years. However, only private owners, which are usually national and international sport organizations, enjoy these events’ receipts. It is true that these organizations redistribute part of their earnings to the basic sport organizations that intend to support athletes. Nevertheless, these earnings are not shared with those who build the facilities necessary for the events. In order to obtain a more public way of managing, we either need the cities and regions to own recurring events that are locally organized or to have sport organizations possess their own facilities.
Interview by Cathy Bruno-Capvert
Jean-Loup Chappelet is Professor of Public Management at the Swiss Graduate School of Public Administration (IDHEAP), associated with the University of Lausanne. He lead the IDHEAP from 2003 to 2011. He is a specialist in sports organizations who has written several books and numerous scientific articles on the governance of the Olympic system and management of the Olympic Games. Board Member of the International Academy of Sports Science and Technology (AISTS) and of the Fondation Sport, Science et Société (FS3), he launched in 1995 the first course on sports management in Switzerland.