Climate change and individuals’ physical inactivity could reduce the size of the global sports industry by $1.6trillion (£1.2tn) by 2050, according to a report published by the World Economic Forum (WEF) on Thursday.
Based on conversations with 125 organisations and a literature review of more than 130 sources, the “Sports for People and Planet” report is billed as the first attempt to properly estimate the size of the sector and predict its growth.
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A joint venture with management consultancy Oliver Wyman, the WEF study paints a generally optimistic picture, with total worldwide revenues from sports-related businesses estimated to rise from $2.3trillion last year to $3.7tn in 2030, and then more than double by 2050 to hit $8.8tn. But it also warns that the industry’s full potential will not be realised if only one in five young people meet recommended daily guidelines for physical activity, as is currently the case, or if the various environmental risks that threaten the sector are not addressed.
“Analysis of 2030 revenue projections indicates that the greatest exposure to physical inactivity and environmental risks lies in sports tourism, sporting goods and participatory sports — sectors that rely most heavily on active populations and stable environmental conditions,” it says.
Citing data from the World Health Organisation, the report explains that inactivity is getting worse, with one in three adults projected to be defined as ‘inactive’ by 2030, an increase from one in four in 2010. If this trend continues, there will be 800million fewer active individuals worldwide than hoped for, “shrinking the foundational consumer base that underpins participation, sports tourism, merchandise sales and long-term fan engagement”.
The threat is clear for big sports-related brands, such as Adidas and Nike, but a lack of active people will impact everyone from fitness instructors to golf-course owners, not to mention the increased strain on national healthcare budgets.
The report is equally concerned about climate change, as it points out that sport is not only highly vulnerable to risks linked to “accelerating environmental degradation” but is also a “significant contributor to these pressures”.
As global soccer’s governing body FIFA discovered at last summer’s Club World Cup in the United States, elite sport needs stable weather patterns. Extreme heat, flooding and pollution also have obvious detrimental impacts on grassroots sport. A shortage of clean water also threatens to disrupt supply chains and harm communities. This is already an acute issue in Asia, where most of the world’s sporting equipment and clothing are made.
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Sport, the report says, should use its big events to encourage innovation and influence consumer behaviour, as well as becoming more sustainable by cutting waste, reducing its carbon footprint and lengthening the lifespan of sporting equipment.
Several examples of these initiatives are given in the report — Adidas’ use of recycled polyester, French retailer Decathlon expanding its repair, rental and resale offers, Formula E acting as a “real-world laboratory” for electric vehicles — but it also flags up some more problematic practices. For example, most professional football clubs release two or three new kits each season, much of which eventually ends up in landfill, while there appears to be little sign of elite sport limiting its use of air travel.
On a more positive note, WEF and Oliver Wyman say the global sports industry already contributes more than two per cent of gross domestic product in most Western economies, and supports one in 25 jobs. They believe the industry can grow at an even faster rate (10 per cent) in the coming decades than it is currently (seven per cent). The key drivers will be sports tourism, continued interest from institutional investors, women’s sport going mainstream and emerging economies leaning into the sector’s potential.
With a Winter Olympics, an expanded FIFA Men’s World Cup, track-and-field’s Commonwealth Games and the Rugby League World Cup on the calendar this year, there will be no shortage of sports tourists in 2026, with increasing numbers of fans interested in “play-and-watch” travel packages, especially in sports such as cycling and golf, the report notes.
The recent sale of basketball’s Los Angeles Lakers at a landmark $10billion (£7.4bn) valuation, the rising value of women’s teams and the influx of private equity into European football suggest sport has already become as much of an “asset class” as bonds and shares, while India, Morocco and Rwanda are among the countries following the sports-investment strategies of the Gulf states to grow their economies.
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However, the authors are convinced this progress will stall if the industry’s various stakeholders and national politicians fail to use the planet’s resources more sparingly, build cities without sufficient spaces for sport or invest without clear plans for positive impacts.
U.S President Donald Trump, left, next to FIFA counterpart Gianni Infantino in Davos in 2020 (Jim Watson/AFP via Getty Images)
Industry leaders and government ministers have been invited to a discussion about the way forward at WEF’s gathering in Davos, Switzerland, next week, with their session scheduled for the Thursday.
U.S. President Donald Trump is due to attend for the first time since 2020, during the first of his two terms in office. His big speech is expected on Wednesday, when he will be joined in the Swiss ski resort by a high-powered delegation of government officials and FIFA president Gianni Infantino, who told Trump in Davos six years ago that the United States “is on the verge of becoming the soccer power in the world”.