Economic Value of Sport Yorkshire & the Humber

Transcription

1 Economic Value of Sport Yorkshire & the Humber August 2010 Sport Industry Research Centre Sheffield Hallam University i

2 Contents Definitions Page iii Executive Summary iv Chapter 1: Introduction 1 1.1: Terms of Reference 1 1.2: Methodology 1 1.3: Regional Characteristics 3 1.4: Sport in the Region 3 Chapter 2: The Sport Economy in Yorkshire and the Humber 8 2.1: Summary of key indicators 8 2.2: Consumer Spending 9 2.3: Sport-related Output : Sport-related Employment : Summary of Income and Expenditure flows 12 Chapter 3: The Sport Economy in Context : Spending, Output and Employment : Importance of Sport in the Yorkshire and the Humber region : Sport and the Leisure Industries 24 Appendices: A1: Statistical Sources 28 A2: Model Output 29 A3: Sources and Methods 43 ii

3 Definitions 1. National Income Accounting The concepts of National Income Accounting were developed for macro-economic analysis in the 1930s and 1940s. The basic principle is that there is accounting equality between total output, total income and total expenditure. The most common definitions of total output in the economy as a whole are the Gross Domestic Product (GDP) and Gross Value Added (GVA). For example, assume that the total output in a factory producing football boots is 100m. This is equivalent to the income generated as wages (say 60m) as profits (say 10m) and as flow to the companies, selling inputs ( 30m) required in the production. In this example, GVA is the sum of wages and profits. Further, total income will also be identical to total expenditure because output that is not sold in the current financial year is treated as investment expenditure. 2. Gross Value Added (GVA) GVA is the difference between total output (based on wages and profits) and the cost of inputs used in the production process (raw materials and services). Alternatively it can be expressed as: GVA = GDP - taxes on products + subsidies on products. GVA shows the contribution of the sports sector to the economy as a whole. 3. Sport We follow the definition employed in the publication Sport Market Forecasts 1. Sport is divided into the following sectors: Sport clothing and footwear, Sport equipment, Health and fitness, other participant sports, Boats, Spectator sports, Sport gambling, Sport TV and video, Sport related publications and sport related travel. 4. Employment This is full time equivalent (FTE) jobs. In this case two half-time jobs are measured as one full time equivalent. 1 Sport Market Forecasts , Sport Industry Research Centre (SIRC), 2009 iii

4 Executive Summary This report is part of Sport England's ongoing commitment to build the evidence of the economic value of sport. The research has been carried out by The Sport Industry Research Centre (SIRC) as a follow up of the 2005 economic reports. The economic value of sport has been assessed across England as a whole and separately for each region. The 2008 economic recession has been a factor influencing the size of the sports sector nationally and within each region. This report focuses on the economic importance of sport to the Yorkshire region in 2008, providing comparisons with estimates from 2003, 2005 and the other English regions. The methodology employed in this report is based on national income accounting and the income and expenditure flows between sub-sectors of the economy. By using the latter we can derive a monetary value for the sport production (value added) which is consistent with the national statistics framework and crucially avoids the problem of double counting. In 2005 and 2008 consumers spent 1,726m and 1,535m on sport respectively. Consumer expenditure on sport as a percentage of total expenditure (2008): Yorkshire and the Humber: 2.2% England: 2.3% iv

5 Despite the recession, the commercial sport and public sectors increased their sportrelated output by 8% and 9% respectively over the period Sport related economic activity generated 1,425m and 1,520m in 2008and 2005 correspondingly. This is equivalent to 1.6% of total value added in the region (2008). 39,800 people are employed in sport related employment corresponding to 1.6% of total employment in the region (2008). Sport Employment in Yorkshire and the Humber, % 11% 71% Commercial sector Voluntary sector Public sector During the period , England's gross value added from sport increased by 22%. During the period, sport related GVA increased by 8% in terms of this methodology and 12% in terms of the ABI statistical definition of sport. This compares favourably with the corresponding growth in 'gambling' and 'motion picture and video activities', both decreasing because of the recession. The sport economy in the region is driven by sport-related investment aiming at urban regeneration. Large sport projects have the potential to make the region a sport participation and sport tourism hub of international significance. Sport gambling has been a strong factor for growth and capital investment in the region. v

6 1. Introduction 1.1 Terms of Reference This report has been prepared by the Sport Industry Research Centre (SIRC) at Sheffield Hallam University on behalf of Sport England. The purpose of the report is to provide an estimate of the economic importance of sport in the Yorkshire and the Humber region. It builds on similar research carried out by Cambridge Econometrics in and SIRC in 2003 and 2005 that measured the value of the sport economy in the nine English regions. Selected comparisons have been made with the 2003 and 2005 studies to illustrate the change in the importance of sport to the Yorkshire and the Humber region economy. This report informs of the direct economic contribution of sport to the regional economy. It also captures in percentage terms the effect of the 2008 recession. 1.2 Methodology The SIRC model of economic impact assessment, uses as its basic input, where possible, economic variables from official statistics. Hence, with the sole exception of the voluntary sector, there is no need for collection of primary data. National income accounting provides the framework for this model, which is consistent with the UK National Accounts. It allows for a division of the sports economy into the seven sectors below: Consumers, including the personal or household sector. Shows mainly sport related expenditure, e.g. spending on sports clothing and footwear. Commercial Sport including spectator sport clubs, sports good manufacturers and retailers. In this sector we would classify companies such as Nike, JJB and football clubs. We also include a section of the media where a sport product/ service is produced such as sport TV, sport publications etc. Commercial Non-Sport including suppliers for the production of sport-related goods and services. This sector includes all companies of the commercial sector that do not provide a sport product, but they assist through supply of inputs or revenue in its production. An example is a beer company sponsoring a football club. The advertising revenue received by the club, represents a flow from the commercial nonsport to the commercial sport sector. 1 Cambridge Econometrics: The Value of the Sports Economy in the Regions in

7 Voluntary including non-profit making sport organisations such as amateur clubs run by their participants. Professional football clubs are not included in this category even if they are managed on a non-profit basis. Local Government including income from local government sport facilities, sport related grants from the Central government and rates from the commercial and voluntary sector. The sector has expenses such as wages for labour (a flow towards consumers) and grants to the voluntary sector. Central Government including taxes, grants and wages on sport related activities. For example a person buying a ticket for a football match, records two flows: one towards the Government sector as VAT and another towards the Commercial sport sector for the remainder of the price. Outside the Area sector. This includes all transactions with economies outside the region. We record income and expenditure flows between the seven sectors above. As a result we can draw up a set of income and expenditure accounts for each sector. The 'double entry' accounting principle is applied, so every expenditure flow from sector A to sector B is also an income flow in the sector B accounts. The income and expenditure accounts are then used to derive estimates for the following economic impact indicators of the sport economy. Sport-related consumer expenditure Sport-related employment Sport-related value added Sport-related value added is the most comprehensive statistic of economic value as it corresponds to the gross value added (GVA) in the economy as a whole. It shows the contribution of the sport industry to the regional economy. We measure it as the sum of wages and profit surplus in the sector, adjusted for the inclusion of value contributed from National Lottery projects. Inflation adjustment has not been used for comparisons between the years 2005 and 2008, as the general inflation rate is very low and the intervening period too small to make an impact. The inflation rate also varies between regions and between sport sectors. The sport generated product (GVA) as a percentage of the total regional product is usually the most important statistic to consider. 2

8 1.3 Regional Characteristics Table 1.1 provides a snapshot of the economic and social background of the Yorkshire and Humber region. It includes statistics such as the regional population and Gross Value Added, which have been used to estimate the economic impact of sport in the region in Note that the consumer spending estimate used here is a SIRC estimate, consistent with the corresponding ONS statistic as reported in Consumer Trends (code: ABPB). On the whole, the Yorkshire and Humber economy is underperforming compared with the UK. For example, Gross Value Added per head in the region is 82% of the UK figure. The regional unemployment rate (6.4%) is greater than the UK level (6.0%). Finally, average gross weekly earnings in the Yorkshire and Humber region correspond to about 89% of the UK average. The gap between the region and the UK has widened during the period Sport in the Region Some of the key features of sport in Yorkshire and the Humber, in terms of the region's sporting infrastructure and representation, are illustrated in table 1.2 below. 3

9 Table 1.1 Yorkshire and the Humber - regional profile, 2008 Resident population '000s Males 2,568 Females 2,645 All 5,213 Percentage of non-white groups Region 9.4% Gross Value Added per head ( ) Region 17,400 England 21,183 Gross Value Added ( m) Region 90,704 England 1,089,799 Percentage of working age population Region 62.3% UK 62.1% Unemployment % rate on working age population (Jun-Aug 2008 / Seasonally Adj.) Region 6.4% UK 6.0% Ec. active % rate of working age people (Jun-Aug 2008 / Seasonally Adj.) Region 78.5% England 79.4% People in employment aged 16 to 59/64 '000s, (Jun-Aug 2008 / Seasonally Adj.) Region 2,365 England 23,631 Average weekly paid working hours Male Full Time, Region 41.1 Male Full Time, UK 40.7 Female Full Time, Region 37.6 Female Full Time, UK 37.6 All Full Time & Part time, Region 34.0 All Full Time & Part time, UK 33.9 Average gross weekly earnings ( ) Male Full Time, Region Male Full Time, UK Female Full Time, Region Female Full Time, UK All Full Time & Part time, Region All Full Time & Part time, UK Sources: ONS, Regional Trends, Labour Market Statistics, ASHE, Sport England, SIRC 4

10 Table 1.2 Sport Profile of the Yorkshire and Humber Region* Premiership football: Hull City Championship football: Barnsley Doncaster Rovers Scunthorpe United Sheffield Wednesday Sheffield United League 1 football: Huddersfield Town Leeds United League 2 football: Bradford City Grimsby Town Rotherham United Rugby Union Premiership: Leeds Carnegie Rugby Super League: Bradford Bulls Castleford Tigers Huddersfield Giants Hull FC Hull Kingston Rovers Leeds Rhinos Wakefield Trinity Wildcats Cricket: Yorkshire Test match cricket ground: Headingley (Leeds) Basketball: Sheffield Sharks Speedway: Scunthorpe Sheffield 5

11 Greyhound racing: Doncaster Kinsley Sheffield Horse racing: Beverley Catterick Bridge Doncaster Pontefract Ripon Thirsk Wetherby York Motor racing: Croft Ice Hockey Sheffield Steelers Hull Stingrays Other: International athletics stadium in Sheffield (Don Valley Stadium) International swimming venue in Sheffield (Ponds Forge) World Snooker Championship in Sheffield (Crucible Theatre) St. Leger Festival in Doncaster British Universities and Colleges Sport Championship in Sheffield and Leeds Sport science and sport medicine centres (Sheffield Hallam University and Sheffield University) * At the time of writing. 6

12 2. The Sport Economy in Yorkshire and the Humber 2.1 Summary of key indicators Table 2.1 summarises the most important sport-related indicators for Yorkshire and the Humber, namely consumer expenditure, gross value added and employment for the years 2000, 2003, 2005 and The table also draws comparisons with England as a whole. The estimate for total regional consumption expenditure is derived using Family Spending and Consumer Trend Statistics. It is therefore consistent with the European System of Accounts The table shows that the effect of the 2008 recession was to take us back to near the 2000 levels of sport economic activity. According to Table 2.1, over 1.5 billion was spent on sport-related goods and services in Yorkshire and the Humber in In the same year, consumer expenditure on sport accounted for 2.2% of their total expenditure in the region, marginally below the national average for England. Compared with 2005, sport-related consumption fell by 11% in This was the result of the 2008 recession. Table 2.1: Main Sport-Related Indicators for Yorkshire and the Humber Consumer expenditure on sport ( million) 1, , , ,535.2 percentage of Yorkshire and the Humber total national average (England) Gross Value Added by sport ( million) 950 1, , ,424.5 percentage of Yorkshire and the Humber total national average (England) Sport related employment (thousands) percentage of Yorkshire and the Humber total national average (England) Sport-related economic activity in 2008 adds more than 1.4 billion to the Yorkshire and Humber economy, representing a decline of 6% for the period Following the recession, the contribution to GVA by sport in the region has returned to the 2000 level of 1.6%. This is still above the national English level of 1.5%. 7

13 Sport-related employment in Yorkshire and the Humber increased from 39,200 in the year 2003 to 39,800 in As a percentage of total employment, it declined from 1.7% in 2003 to 1.6%. However compared to 2005, there was a decline in sport related employment of more than 15%. In the Yorkshire and the Humber region, the decline in consumer expenditure following the 2008 recession, brought about a greater reduction in employment, and hence wages, than output. 2.2 Consumer Spending Table 2.2 summarises the value of sport-related consumer spending in the region. The new estimate is consistent with the total reported in the ONS publication Consumer Trends. Table 2.2 shows that the total value of sport-related consumer spending was 1,535 million in 2008, representing a decline of 11% over the year Gambling represents the largest area of consumer spending on sport ( 304 million, 20%). This is somewhat aided by the presence of several racecourses across the region, notably in North Yorkshire; however the vast majority of horse race betting expenditure occurs off-course. Table 2.2: Sport-Related Consumer Spending in Yorkshire and the Humber m m m m Sport clothing and footwear Sports goods Participation subscriptions and fees Admissions to events Sport-related gambling 186* TV/video rental, cable and satellite subscriptions Other sport-related spending Total 1,156 1,308 1,726 1,535 8

14 Following the recession, sport related gambling declined by 31%, from 442 million in 2005 to 304 in After gambling, the major categories of expenditure are sport clothing and footwear ( 291 million, 19%) and participation subscriptions and fees ( 259 million, 17%). Both of them have declined following the recession. Admissions to events fell by 23%, from 62 million in 2005 to 48 million in The role of sport in creating output and employment in the commercial non-sport sector is illustrated by the sports-related spending on 'TV / video rental, cable and satellite subscriptions', accounting for 13% of the sport market. Other spending categories include publications, sport-related BBC licence fee, and sport travel. Sport-related TV is the only major spending category that has shown growth during the period. 2.3 Sport-related Output Estimates of sport-related output are based on value added by the sport sector. Value added is calculated as the sum of wages and profits generated in the sector. Table 2.3 summarises the value added by sport in Yorkshire and the Humber. According to the table, sport-related economic activity reached 1,425 million in 2008, representing an increase of 21% over the year 2003 and a decrease of 6% over the year Over half ( 773) of this economic activity is generated by the commercial non-sport sector. Table 2.3: Sport-Related Value Added in the Yorkshire and Humber m m m m Commercial sport of which: Spectator sports Retailing Commercial non-sport Voluntary sector Public sector Total 950 1,179 1,520 1,425 9

15 The next sector in size is commercial sport ( 310 million, 22%); almost 60% of the valued added in this sector is attributable to manufacturing and retailing. The latter includes sportrelated clothing and footwear, equipment and publications. A significant minority of sportrelated economic activity in the region can be attributable to the voluntary (12%) and public (12%) sectors. The 2008 recession did not imply reductions of output across all sectors of the sport economy. The Commercial sport and public sectors bucked the trend, increasing by 8% and 9% respectively over the period Within the commercial sport sector the driving force was retailing. The latter, over the period, increased by 10% reaching 137 million in value. 2.4 Sport-related Employment Table 2.4 provides estimates for sport-related employment in Yorkshire and the Humber. The employment estimates are derived from calculations based on wage payments and average salaries per sector. Sport and associated industries are estimated to employ 39,800 people in Yorkshire and the Humber, accounting for 1.6% of all employment in the region in This represents an increase of 2% since the year 2003, yet a significant decline since the boom of Table 2.4 indicates that in 2008, the largest sector of sport-related jobs (18,500, 46%) is supported by the commercial non-sport sector. This is followed by the commercial sport (25%), public (18%) and voluntary (11%) sectors respectively. It should be noted that employment in sport retailing increased by 14% during the period, bucking the negative recession trend. The 14% rise in employment is related to a 10% rise in Gross Value Added. It implies that in the first year of the recession in sport retailing, it was the profit margins that gave way, maintaining growth and increasing employment. 10

16 Table 2.4: Sport-Related Employment in Yorkshire and the Humber ('000) ('000) ('000) ('000) Commercial sport of which: Spectator sports Retailing Commercial non-sport Voluntary sector Public sector Total Summary of Income and Expenditure Flows Table 2.5 below summarises the income and expenditure flows for the seven sport-related sectors in Of these sectors, the commercial non-sport sector generates the largest income, 1,015 million. This is followed by the commercial sport sector ( 739 million) and consumer sector ( 692 million). Sport retailing accounts for the majority (60%) of the commercial sector income, generated from the sale of sport equipment, clothing and footwear, books, magazines, newspapers and DVDs. On the expenditure side, by far the most important category is the consumer sector accounting for expenditure over 1.5 billion. The commercial non-sport and commercial sport also incur significant expenditures, 965 million and 661 million respectively. More than the half of the expenditure within the commercial sport sector relates to current factor spending, such as wages, predominantly in the retailing sub-sector. 11

17 Table 2.5 Sport-Related Income and Expenditure Flows, 2008 Income Expenditure m m Consumer ,535.2 Commercial sport of which: Spectator sports * Participation sports * Retailing * Voluntary Commercial non-sport 1, Central government Local government Outside the area * Current factor expenditure (wages, other inputs) 12

18 3. The Sport Economy in Context 3.1 Spending, Output and Employment Tables 3.1 to 3.9 compare the nine English regions in terms of sport-related consumer spending, value added and employment for the years 2003, 2005 and Tables 3.1 to 3.3 refer to consumer spending, Tables 3.4 to 3.6 refer to value added, while the remaining tables present the picture of sport related employment. From Table 3.3 it can be seen that the Yorkshire and Humber region ranks seventh amongst the English regions in terms of 'absolute' sport-related consumer spending. In 2008, spending per capita in the region was 295. The proportion of total consumer expenditure made on sport (out of total consumer expenditure) in the region ranks sixth amongst the English regions at 2.2%, marginally below the English average A similar trend can be observed in Table 3.6. The sport-related output in the Yorkshire and Humber region ranks seventh across England, both in absolute terms ( 1,425 million) and as a percentage of total regional output (1.6%). The latter is above the average for England as a whole (1.5%). Table 3.9 shows that the output trends are reflected in employment. The sport-related employment in the Yorkshire and Humber region ranks seventh amongst the English regions, both in absolute terms (39,800) and in percentage contribution to total regional employment (1.6%). The latter is marginally below the English average (1.8%). This represents a reversal of the economic structure in the pre-recession years. 3.2 Importance of Sport in the Yorkshire and the Humber region The sport economy in the Yorkshire and Humber region was affected by the 2008 recession. In 2005, the percentage of sport-related consumer spending out of total spending was the highest in England (2.9%). This has now declined to 2.2%. It shows that economic fortunes weigh heavily on sport within the region, and a quick recovery should be expected when the economy starts growing. Sport gambling forms a very important component of the sport 13

19 budget following the abolition of gaming tax. This is the case throughout England and the UK. The region is very rich in sport infrastructure. Regional sport is built around stadiums such as Headingley for rugby and cricket and Elland Road. Sheffield in particular has invested in sport to promote urban regeneration. This has impacted upon sport-related employment in the wider region, which in proportionate terms is among the highest in the country. The Yorkshire and Humber region enjoys a special advantage in terms of sports development and participation. IceSheffield, the ice-skating venue which opened in 2003, attracts visitors from South Yorkshire and North Midlands. The cost of the project was 15.6 million, largely paid from lottery funding. It supports the Skate UK programme, developed by the National Ice-Skating Association, aimed at increasing participation among the public regardless of age, gender and disability. England s oldest horse race (since 1519), is run each year at Kiplingcotes. Building on this tradition there are nine established racecourses in the county. This is an important economic factor, as capital spending on racecourses is second only to football. Yorkshire and the Humber enjoy one of the strongest traditions in horseracing and sport gambling. Rotherham Metropolitan Borough council together with the developer Oak-Holdings are developing a 300 million entertainment centre, called YES! According to the submitted plans, the 320-acre leisure complex would be the largest indoor leisure and tourism destination in Europe. It would have extensive sport facilities including golf, extreme sport centre and spa. This project is estimated to generate 2,700 jobs in the area. 14

20 Table 3.1: Summary of sport-related consumer spending in the English Regions in 2003 East North North South South West Yorkshire East Midlands London East West East West Midlands & Humber England ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) Sport clothing and footwear ( m) Sports goods ( m) Participation subscriptions and fees ( m) Admissions to events ( m) Sport-related gambling ( m) Other sport-related spending ( m) Total expenditure on sport ( m) Per capita sport spending ( ) Proportion (%) of total consumer expenditure 2.3% 2.5% 2.5% 3.0% 2.6% 2.4% 2.4% 2.4% 2.4% 2.5% 15

21 Table 3.2: Summary of sport-related consumer spending in the English Regions in 2005 East North North South South West Yorkshire East Midlands London East West East West Midlands & Humber England ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) Sport clothing and footwear ( m) ,258.3 Sports goods ( m) ,193.5 Participation subscriptions and fees ( m) ,468.7 Admissions to events ( m) Sport-related gambling ( m) ,070.5 Other sport-related spending ( m) ,889.6 Total expenditure on sport ( m) 1, , , , , , , , ,580.1 Per capita sport spending ( ) Proportion (%) of total consumer expenditure 2.6% 2.7% 2.3% 2.9% 2.8% 2.5% 2.4% 2.4% 2.9% 2.6% Table 3.3: Summary of sport-related consumer spending in the English Regions in

22 East North North South South West Yorkshire East Midlands London East West East West Midlands & Humber England ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) Sport clothing and footwear ( m) ,537.9 Sports goods ( m) ,115.5 Participation subscriptions and fees ( m) ,174.5 Admissions to events ( m) Sport-related gambling ( m) ,100.1 Other sport-related spending ( m) ,867.7 Total expenditure on sport ( m) 2, , , , , , , , ,383.6 Per capita sport spending ( ) Proportion (%) of total consumer expenditure 2.6% 2.4% 2.1% 2.6% 2.2% 1.9% 2.3% 2.9% 2.2% 2.3% 17

23 Table 3.4: Summary of sport-related output in the English Regions in 2003 East North South South West Yorkshire East Midlands London North East West East West Midlands & Humber England ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) Commercial sport ,360.4 of which: Spectator sports Participation sports Retailing ,183.9 Manufacturing TV and Radio Commercial non-sport , , , ,237.8 Voluntary sector ,871.2 Public sector ,180.0 Total sport-related economic activity 1, , , , , , , , ,649.1 Sport GVA as % of total GVA 1.7% 1.8% 1.4% 2.1% 1.8% 1.6% 1.6% 1.7% 1.7% 1.6% 18

24 Table 3.5: Summary of sport-related output in the English Regions in 2005 East North South South West Yorkshire East Midlands London North East West East West Midlands & Humber England ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) Commercial sport ,923.6 of which: Spectator sports Participation sports Retailing ,315.0 Manufacturing TV and Radio Commercial non-sport , , , ,886.7 Voluntary sector ,312.1 Public sector ,340.8 Total sport-related economic activity 1, , , , , , , , ,470.9 Sport GVA as % of total GVA 1.8% 1.9% 1.3% 2.0% 2.0% 1.6% 1.6% 1.7% 1.9% 1.7% 19

25 Table 3.6: Summary of sport-related output in the English Regions in 2008 East North South South West Yorkshire East Midlands London North East West East West Midlands & Humber England ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) ( m) Commercial sport ,327.0 of which: Spectator sports Participation sports Retailing ,468.0 Manufacturing TV and Radio Commercial non-sport 1, , , , , ,635.6 Voluntary sector ,109.9 Public sector ,595.7 Total sport-related economic activity 2, , , , , , ,668.1 Sport GVA as % of total GVA 2.0% 1.7% 1.0% 2.0% 1.7% 1.4% 1.6% 2.0% 1.6% 1.5% 20

26 Table 3.7: Summary of sport-related employment in the English Regions in 2003 East North South South West Yorkshire East Midlands London North East West East West Midlands & Humber England ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) Commercial sport of which: Spectator sports Participation sports Retailers Manufacturing TV and Radio Commercial non-sport Voluntary sport Public sector Total jobs in sport Proportion (%) of total employment in sport 1.8% 1.9% 1.5% 2.1% 1.7% 1.7% 1.6% 1.8% 1.7% 1.7% 21

27 Table 3.8: Summary of sport-related employment in the English Regions in 2005 East North South South West Yorkshire East Midlands London North East West East West Midlands & Humber England ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) Commercial sport of which: Spectator sports Participation sports Retailers Manufacturing TV and Radio Commercial non-sport Voluntary sport Public sector Total jobs in sport Proportion (%) of total employment in sport 2.1% 1.9% 1.4% 2.2% 1.9% 1.7% 1.6% 1.8% 2.0% 1.8% 22

28 Table 3.9: Summary of sport-related employment in the English Regions in 2008 East North South South West Yorkshire East Midlands London North East West East West Midlands & Humber England ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000) Commercial sport of which: Spectator sports Participation sports Retailers Manufacturing TV and Radio Commercial non-sport Voluntary sport Public sector Total jobs in sport Proportion (%) of total employment in sport 2.2% 1.8% 1.4% 2.1% 1.9% 1.6% 1.7% 2.2% 1.6% 1.8% 23

29 3.3 Sport and the leisure industries Figure 4.1 below provides a comparison between the Gross Value Added produced by Sport and the Gross Value Added produced by other Leisure related Industries in England. The statistics are taken directly from the Annual Business Inquiry (ABI). They are based on UK figures and have been adjusted by a factor of 0.85 to bring them down to an English level. Sport is represented in the diagram in two ways: Firstly, as Gross Value Added derived from SIRC for the benefit of this report, and secondly as the sum of the sport related categories identified by ABI. This is often called the statistical definition of sport. It includes the following categories: sporting activities (mainly operation of sport arenas and stadiums), physical well being activities, manufacture and retail of sport goods. The ABI derived sport GVA equals 5.9 billion in 2008, equivalent to 36% of the total sport GVA estimated at 16.7 billion. Sport (using the ABI definition) has greater economic importance than the sum of 'Motion picture & video activities', 'Radio and TV activities', and 'Gambling and betting'. Further, the sport sector (using the SIRC model estimation) is approximately equivalent to the sum of 'Hotels' and 'Publishing' sectors. Figure 4.2 illustrates the GVA growth rates of the selected leisure sectors over the period We consider this short period in order to focus more on the impact of the recession. The sector 'Hotels' has the largest growth over the examined period. This is partly because of the reversal of a very low growth pattern that accompanied the aforementioned sector during the first half of the decade. This is followed by Sport, as defined statistically by ABI, at 12% and Publishing at 10%. Sport, as defined by SIRC in this report, during the period grew by 8%. The remaining considered categories: Video activities, Radio and TV activities, and Gambling all declined considerably over the examined period. Gambling and betting activities lost more than 50% of its Gross Value Added over the examined period Hence, despite the decline of the sport economy as a percentage of the whole economy, the sport economy did not suffer the full effect of the recession as shown in the cases of Motion pictures and video activities or Gambling. Under both definitions considered, Sport increased considerably, driven by investment directed towards the London Olympics and a long-term Sport England policy to increase sport participation. Had these policies not been in place, the negative effect on the sport sector would have been considerable. When the economy declines, the sectors that suffer before all are leisure related. Finally, the resistance of the sport sector to the recession effect reflects a greater importance of sport participation in the living standards experienced 24

30 in the UK. A great proportion of the population consider sports participation as being more a basic need than a luxury. Figure 4.1: GVA England, 2008, m Gambling and betting Motion picture and video activities Radio and TV activities Sport -statistical definition (ABI) Hotels Publishing SPORT (SIRC) Sources: Annual Business Inquiry, SIRC 30% Figure 4.2: GVA England % change % 21% 10% 8% 10% 12% 0% -10% -20% Gambling and betting Radio and TV activities Video activities etc SPORT (SIRC) Publishing Sport -statistical definition (ABI) Hotels -30% -40% -35% -31% -50% -52% -60% Sources: Annual Business Inquiry, SIRC 25

31 APPENDICES 26

32 LIST OF TABLES A1: Statistical Sources A2: Model Output Consumer expenditure on sport related goods and services, 2008 Commercial sport income, 2008 Commercial sport expenditure, 2008 Voluntary sector income, 2008 Voluntary sector expenditure 2008 Commercial non sport income 2008 Commercial non sport expenditure 2008 Central Government income, 2008 Central Government expenditure, 2008 Local Government income, 2008 Local Government expenditure, 2008 Outside the area income, 2008 Outside the area expenditure, 2008 Value added by sport related economic activity, 2008 Employment, 2008 Expenditure flows matrix, 2008 A3 Sources and Methods 27

33 A1: Statistical Sources Sources of data used in the model include the following publications: Consumer Trends Housing and Construction Statistics Travel Trends UK National Accounts Family Spending BBC Annual Report and Accounts Regional Trends PRODCOM Annual Industry Reports 'Focus on...' reports HM Customs and Excise Report Annual Business Inquiry Monthly Digest of Statistics ASHE Financial Statement and Budget Report Sport England Annual Report Horserace and Betting Levy Board Report Regional Accounts Government s Expenditure Plans Leisure and Recreation Statistics General Household Survey National Travel Survey Deloitte: Annual Review of Football Finance BSkyB Annual Report Labour Trends 28

34 A2: Model Output Consumer Expenditure on Sport Related Goods & Services, 2008 million Admissions 47.9 Sports goods 81.0 Bicycles 3.0 Boats Participants sports subscriptions & fees Clothing sales Footwear sales Repairs and laundry 1.6 Travel 67.3 Books and magazines 14.1 Newspapers 27.1 Video: purchase and rental 2.0 BBC licence 31.5 TV and video rental, cable & satellite subscriptions Internet subscriptions 0.7 Skiing holidays 80.0 Public schools 8.3 Gambling: Football pools 4.6 Horse Racing Raffles and gaming 28.4 Total 1,

35 Commercial Sport Income, 2008 Spectator Clubs: million Admissions 47.4 Sponsorship & advertising 16.5 Corporate entertainment 10.7 Horserace Betting Levy 7.8 Participation clubs: Subscriptions & fees 47.8 Retailers (net of Vat): Equipment Clothing and footwear Books, newspapers and magazines & videos 42.8 Exports and manufacturers' sales of clothing, footwear & equipment 94.0 TV and radio: BBC 31.5 Commercial 28.8 Exports 2.3 Internet subscriptions 0.6 Lottery awards 1.8 Lottery partnerships 0.7 Total Income

36 Commercial Sport Expenditure, 2008 Current factor expenditure million Spectator clubs: Wages 54.0 Other inputs 27.4 Participation: Wages 23.9 Other inputs 21.5 Retailers: Wages 78.1 Other inputs Manufactures: Wages 10.0 Other inputs 35.5 TV and radio: Wages 30.2 Other inputs 16.6 Total Factor Expenditure Total wages Total other inputs Total factor surplus Total value added Current transfers Corporation tax 16.1 Rates 9.3 Capital expenditure Investment 32.5 Total Expenditure Leaving Sector

37 Voluntary Sector Income, 2008 million Factor income (monetary) Players' subscriptions and match fees Equipment 1.0 Sponsorship and advertising 11.2 Raffles and gaming machines 28.4 Bar receipts Subtotal (factor income) Other monetary income Grants 18.0 Foundation for Sport and Arts 1.5 Employers' subsidies 15.8 Interest 6.2 Lottery awards via Sport England 7.4 Lottery partnerships 6.6 Total Monetary Income (excluding bar receipts)

38 Voluntary Sector Expenditure, 2008 million Factor expenditure Wages 95.0 Ground hire and rents 12.9 Equipment 1.0 Other 66.5 (Bar purchases) Subtotal (factor expenditure) Rates 8.1 Interest 3.0 Investment 36.4 Total Monetary Expenditure (excluding bar purchases)

39 Commercial Non-Sport Income, 2008 million Receipts net of tax from consumer spending: Travel 24.2 Gambling Skiing 36.3 Public schools 6.9 TV rental, cable & satellite subscriptions Sales of current inputs to: Central government 8.7 Local government 43.5 Commercial sport Voluntary sector 61.4 Interest from voluntary sector 3.0 Sales of capital inputs to: Local government 69.7 Commercial sport 20.1 Voluntary 30.1 Promotion expenditure for sponsorship (intra-sectoral flow) 38.7 Total income 1,

40 Commercial Non-Sport Expenditure, 2008 million Producers of inputs to sport: wages imports (factor surplus) (value added) Corporation tax 39.5 Rates 23.2 Purchases of inputs from sport: Sponsorship and advertising 45.8 ITV and radio advertising 28.8 Corporate entertainment at sports events 10.7 Employees' sports subsidies 7.2 Horserace Betting Levy 7.8 Interest payments to voluntary sector 6.2 Promotion expenditure for sponsorship: (to elsewhere in CNS sector) 38.7 Lottery awards via Sport England 21.2 Lottery partnerships 25.1 Total expenditure leaving sector

41 Central Government Income, 2008 million Taxes: on expenditure on incomes generated in: commercial sport 76.4 voluntary sector 27.9 commercial non-sport local government 46.6 Total income Lottery awards 3.2 Lottery partnerships 2.0 Transfer Payments Central Government Expenditure, 2008 million Grants via Sport England 12.3 Grant support for local government expenditure on: sport (net spending) 57.0 education 59.0 Foundation for Sport and Arts 2.0 Factor Expenditure Sport England: wages and other inputs 8.6 Prison service, MOD, royal parks: wages and other inputs 3.5 Total

42 Local Government Income, 2008 million Local authority sports facilities: fees and charges 46.2 sales of equipment 24.9 ground hire 6.5 Grants from central government: to fund net expenditure on sport 57.0 sport education 59.0 via Sport England 1.8 via FSA 0.5 Rates: voluntary sector 8.1 commercial sport 9.3 commercial non-sport 23.2 Payments for policing 1.3 Lottery awards 8.8 Lottery partnerships 15.9 Total income

43 Local Government Expenditure, 2008 million Current expenditure Direct gross expenditure: Wages 71.3 Other current expenditure 60.7 Education: Wages 73.2 Research 0.5 Local transport and policing: Wages and other inputs 14.3 Grants to voluntary clubs 7.6 Capital expenditure Investment 84.4 Total expenditure

44 Outside the Area Income, 2008 million Sports, clothing, footwear and equipment 76.2 Import content of skiing 29.7 TV imports 4.1 Prize income 11.3 Import content of UK production of: Sport related goods and services 15.6 Commercial non-sport sector output Total income Outside the Area Expenditure, 2008 million Sports, clothing, footwear and equipment 85.6 Admissions to sports events 9.6 TV exports 2.3 Prize income 11.3 Total expenditure

45 Value Added by Sport Related Economic Activity, 2008 Commercial sport: million Index Wages Surplus Lottery projects 1.0 Total Voluntary sector: Wages 95.0 Surplus 65.9 Lottery projects 5.7 Total Commercial non-sport: Wages Surplus Total Central Government: Wages 4.7 Lottery projects 2.1 Total Local Government: Wages (education) 73.2 Wages (sports facilities) 71.3 Wages (transport and policing) 14.3 Lottery projects 10.0 Total Total Value Added 1,

46 Employment, 2008 Employment ('000s) Sector Commercial Sport: Spectator clubs 2.9 Participation clubs 1.3 Retailers 4.0 Manufacturing (exports) 0.5 TV and Radio 0.9 Subtotal 9.5 Voluntary sport 4.5 Commercial non-sport 18.5 Central Government: Administration 0.2 Subtotal 0.2 Local Government: Sports facilities 3.8 Education 2.6 Transport/police 0.5 Subtotal 6.9 Total

47 The Expenditure Flows Matrix, 2008 ( m) Flows to: Flows from: CON CS VOL CNS CG LG OV Consumer sector Commercial sport Voluntary sector Commercial non-sport Central government Local government Overseas

48 A3: Sources and Methods This section attempts to explain how the estimates are derived. Many are generated through the flows in the model. The flows among the sectors in the SIRC model are based on a double entry principle between income and expenditure. Data sources mostly relate to the expenditure side, especially in the case of consumers. The Overseas sector is treated as residual in the flow system. No data exist to adequately describe the Voluntary sector; for this reason we use relationships that arise from previous studies and surveys to relate the Voluntary sector to the sport economy. The estimation of the remaining five sectors is explained below: Consumer expenditure Many items of sport related consumer expenditure are located in the Family Expenditure Survey (FES) at the UK level. Only broader categories of spending exist for the Regions. The latter are used to extract the relative statistics from the UK figures in a proportionate manner. Admissions: They are estimated from FES. Data exist for 'Spectator sports - admission charges' for the UK as a whole and for 'Sports admissions and subscriptions' for the regions. Our estimate comes from the UK figure, using the regional proportions. Sports goods: Expenditure is estimated from FES 'Sports and camping equipment' and annual reports of major sports companies. Bicycles: The basis of the estimate comes from Consumer Trends. This is filtered regionally according to FES and the proportion of sport related bicycle journeys form the National Travel Survey (NTS). Boats: The estimate is derived from a SIRC model for the sector based on statistics from the British Marine Federation. Participant sports subscriptions and fees: Expenditure is estimated using the FES categories: 'participant sports excluding subscriptions' and 'subscriptions to sports and social clubs'. 43

49 Clothing and footwear sales: The estimate is based on a SIRC model, annual reports from sports companies and statistics from Consumer Trends and FES. Sport related travel: This is derived from a SIRC model based on NTS statistics. Books, magazines and newspapers: Statistics are based on FES and Consumer Trends. Video and DVDs purchase and rental: Based on statistics from FES and the British Video Association. BBC licence: Expenditure is derived from the sport related content of the BBC licence. It is based on data from the BBC annual report, a SIRC model and the number of households. TV rental, cable and satellite subscriptions: The basic estimate is derived from FES. Its sport related estimate is filtered by using BSkyB and BBC statistics. Sport related gambling: The basis of the estimates is the UK figure which is derived from official HM Customs and Excise data. A model by SIRC is used to ensure that the value of the overall gambling sector corresponds to the Consumer Trends statistic. Subsequently the regional element is derived by using FES and the number of households. Commercial sport income Spectator club admissions: This is a flow of income coming from the domestic consumer sector and the overseas visitors to the region. Data from FES and HM Customs and Excise have been used. Income from Tourists is estimated from Travel Trends and the Digest of Tourist Statistics. Sponsorship: Most of this income comes from the Commercial Non Sport sector. Various sources are used from the SIRC archive. We also assume that the sponsorship market is associated with the size of the spectator sports industry. 44