Sport and business: a winning combination
Business Secretary Sajid Javid celebrates the success of the UK’s sports industry, but reminds the sector that it’s not like any other business.
The last time I gave a speech about sport, I was still Secretary of State at DCMS.
And during my 12 months in charge of sports policy, England’s men’s football and cricket teams both crashed out of their respective World Cups in the first round.
Now I know the Prime Minister’s a big rugby fan.
So I think he reshuffled me to BIS as a precaution ahead of THAT world cup…
But look, I’m not taking the blame for that one!
It’s all down to John Whittingdale!
Of course, I’m happy to take the credit for England’s women winning the Rugby World Cup while I was at DCMS.
And our women cricketers won the Ashes, too…
When I worked in banking I used to pop out on a Saturday and head over to a local bar.
And I’d sit with dozens of other people, all of whom were absolutely rapt by the Premier League game being shown on the big screen.
Nothing unusual there.
The kind of thing that happens up and down the country every weekend.
Except this wasn’t in Bromsgrove, or London.
It was Singapore.
And the crowd wasn’t just fellow expats.
The place was always packed with locals all filled with passion and commitment and genuine love for their team.
Often a team from a country and city they’d never visited and would never visit.
It’s a scene you see repeated around the world.
On my travels I’ve found that the Premier League is like the international language of taxi drivers!
I’ve met office workers in China wearing Liverpool shirts.
Waiters in Tanzania who’ll talk at length about whether Tottenham will ever crack the top four…
Manchester United are so popular in Malaysia that in 2011 Prime Minister Najib Razak invited 10,000 people to watch the Champions League Final with him.
And that was despite the game kicking off at 2:45am on a Sunday morning!
The Premier League is one of Britain’s most recognised and most popular brands.
And it’s also one of our biggest and most successful businesses both at home and abroad.
In 2013 to 2014 the league generated £3.4 billion in GVA, supported over 100,000 jobs and contributed £2.4 billion in taxes. Taxes that pay for our schools, our hospitals, for the police.
The number of foreign tourists attending a game reached 800,000 last year.
And they spent an average of £200 more than other tourists while they were here.
And its popularity just keeps on growing.
Twenty-three years ago, Sky piggy-backed on the emerging Premier League to build its customer base.
Today, competition for Premier League TV rights has been the driving force in the emergence of BT as a serious broadcaster.
The Premier League is broadcast to 730 million homes in 185 countries.
And it earns more from overseas TV rights than the whole of BBC Worldwide – £722 million in 2013 to 2014.
So the Beatles might not have been bigger than Jesus.
But England’s top flight is definitely bigger than Dr Who!
But for all its success there’s a lot more to British sport than the Premier League alone.
Because every year, sport contributes tens of billions of pounds to the British economy.
Sport-related consumer spending is worth in the region of £30 billion a year.
When the Tour de France visited the UK last year, almost 5 million people turned out to watch, myself included!
The race added more than £100 million to Yorkshire’s economy, with a boost to tourism set to be felt for years to come.
Motorsports Valley is home to 3,500 companies employing 40,000 highly skilled people.
Ninety per cent of those businesses export, and together they generate £9 billion in revenues.
The 2013 NFL International Series added as much as £60 million to London’s economy in just 2 weekends.
The series has been such a success that it now sells out 3 games every autumn.
There are plans to increase it to 4 games in the near future, with high hopes of a franchise moving here before long.
The 2014 Commonwealth Games gave a £100 million boost to Glasgow.
Twelve months later the World Gymnastics Championships arrived in the city, drawing visitors from around the world.
And while the Rugby World Cup was not exactly a great success for England on the pitch, things looked much rosier off it.
Almost 2.5 million people filed through the turnstiles, with another 120 million watching on TV around the world.
It’s thought the event added almost a billion pounds to Britain’s GDP.
Early reports say there was a 9% rise in beer sales – presumably down to England fans drowning their sorrows!
Then there’s the big daddy of them all, the 2012 London Olympic and Paralympic Games.
Winning, planning and hosting the Games created almost a million job years of employment.
People visiting London 2012 events spent almost £2.5 billion.
The Games’ net impact on the UK’s tourist industry was in the region of £600 million.
And, from bid to legacy, from 2004 to 2020, the economic impact is estimated to be as high as £41 billion of GVA.
For a pair of 2-week events, the figures are almost unimaginably huge.
However, here’s a challenge for you.
This afternoon, walk outside onto Victoria Street, stop a random passer-by and ask them what they liked best about London 2012
I’m willing to bet that you won’t find a single person whose highlight of the Games was the GVA numbers.
Nobody will reminisce about where they were on the night that job years of employment passed the 800,000 mark.
Britain’s memories are of a fantastic summer of sport.
Of a sometimes cynical, self-doubting nation brought together with renewed confidence and a shared passion.
We remember Mo Farah’s elation.
Chris Hoy’s tears.
Nicola Adams’ infectious, irrepressible smile.
We remember a time when we could be heroes…
…just for one day.
Because sport is big business, certainly.
But it’s not only business.
And we forget that at our peril.
Sport occupies a unique place in Britain’s history and culture.
We invented or codified most of the world’s most popular pastimes, from boxing to bungee jumping.
Despite recent wobbles in various men’s world cups, we continue to punch well above our weight on the global stage.
Up and down the country, sports clubs are the beating heart of their communities.
Counties, towns and villages define themselves through their football, rugby and cricket teams.
The mood of entire cities can fluctuate in line with what happens on a Saturday afternoon.
Amateur clubs, organised by dedicated volunteers, bring people together in numbers that no government programme can match.
Cyclists, runners and swimmers who know they will never reach the top turn out again and again simply through the love of their sport.
There is literally nothing else like it.
And business underpins it all.
It allows us to invest in continued success at the highest level, and develop the talent of the future at the grassroots.
But someone who puts business before sport knows the price of everything and the value of nothing.
At Wembley last night we saw the unique power sport has to bring people together in the face of tragedy.
That’s something no other business can match.
Last month, when England lost to Australia in the rugby, the country didn’t mourn because of the impact on GDP growth.
We mourned because of the crushing disappointment, because dreams that had been built up over a decade were shattered in 2 devastating defeats.
In recent years, too many football teams have gone to the wall not because of poor performance on the pitch, but because of poor performance in the boardroom.
It’s a tragedy when any local business has to close its doors.
But when a sports team locks its doors, the community loses something that’s more than economic.
It loses its centre, its source of civic pride.
This isn’t just a British problem.
Whether it’s the Russian doping scandal in athletics, Lance Armstrong’s legacy in cycling, or the disgraceful scenes unfolding at FIFA, the pursuit of victory and profit at all costs leaves a bitter taste in the mouth.
As a government we’re trying to promote and support grassroots sport, to get more people active and healthy.
And that’s much harder when business and money is allowed to trample on tradition, leaving people disillusioned and disconnected.
I know that, for most of the people in this room, I’m preaching to the choir.
You got into this business because you love sport, not because you love money.
You’re good enough at what you do to recognise that putting business before sport risks destroying the very product you’ve been so successful at selling to the world.
But the risk we face is similar to that I raised in a speech about capitalism earlier this week.
Capitalism has done wonderful things for the world, but recent challenges have left people unhappy and seeking alternatives.
Business has done wonderful things for sport, but that too has left people feeling disenfranchised.
And that’s a real problem, because sporting success and a thriving sports industry have a symbiotic relationship.
They feed off each other.
You can’t have one without the other.
We must all do a better job of communicating the benefits of business to the fans who make British sport what it is.
Because for all the success the UK sports industry has achieved over the past 25 years, the potential for the future is greater still.
Sport is changing.
The kind of sport we watch is changing.
The way we consume it and participate in it is changing too.
And the private sector has a massive role to play in this.
Just look at participation.
In the past, ‘participating in sport’ meant joining your pub’s Sunday League team or signing up with your local running club.
Plenty of people still do this, and it should absolutely be encouraged.
My children go to taekwondo every weekend and I wouldn’t change it for the world.
But signing up and playing the same sport week-in, week-out is no longer the only path to follow.
People now participate in sport in the way they consume television or music, picking and choosing from a wide range of options.
And that often means breaking out of traditional, formal models and embracing an alternative offered by the private sector.
For years the FA concentrated its grassroots efforts on the traditional 11-a-side Sunday morning parks game.
But Goals Soccer Centres managed to kick off a whole new footballing culture by meeting an untapped demand for competitive, after-work 5-a-side football.
Meanwhile, ParkRun has created a global phenomenon by organising fun, free inclusive 5Ks without the red tape and regulation that comes with an event sanctioned by a governing body.
The way we watch sport is changing too.
When I was a kid, I had the choice between listening to the latest England batting collapse on Test Match Special or watching it unfold on Ceefax.
Today, technology has revolutionised the way we enjoy sport.
There’s streaming coverage, text commentary, over-by-over liveblogs.
Vines, Periscopes and so much more.
At this year’s World Twenty20 Qualifier, the International Cricket Council used digital channels to reach millions of fans in hundreds of countries, including in non-traditional markets such as the USA.
The most tweeted-about event in history is the 2014 World Cup.
Eight of the top 10 tweeted about moments of 2014 in the UK were sport-related.
It’s now possible for millions of people worldwide to debate a dodgy offside decision in real time.
I’ve even heard stories about Bromsgrove Sporting fans gathering in pubs to follow away games on Twitter.
A hi-tech version of my Ceefax adventures from years gone by!
And the sports we watch are changing too.
The big 3 of football, cricket and rugby continue to dominate.
But others are starting to make their mark.
Not so very long ago the idea of London hosting the World Track Cycling Championships in a 6,000-seat velodrome was fanciful enough.
But doing so and selling out every session months in advance?
That was in the realm of fantasy.
Yet that’s exactly what’s happened.
The 2012 Paralympics were the most successful in history.
Athletes used to competing in front of a handful of spectators found themselves being watched by tens of thousands.
And women’s sport is coming to the fore.
45,000 people packed into Wembley to watch England’s Lionesses take on Germany ahead of this summer’s World Cup.
The women’s tournament has become so successful that FIFA is considering whether to split the commercial rights for the men’s and women’s world cups.
As I’ve already said, our women’s rugby team are the world champions – showing the men how to do it.
And between now and 2019 the UK will be hosting the women’s world cups in cricket, hockey and netball.
New sports, new technologies, new audiences, new ways of participating.
It all adds up to a future filled with new opportunities for business – but only if you put sport first.
The UK sports industry is a fantastically successful international business, a real world leader.
Like all world-leading British businesses, it’s a sector the government is doing everything it can to support.
We’re cutting corporation tax, protecting your intellectual property rights and fighting for a digital single market.
And I’m in talks with my former department about how we can best work you to tackle the challenges you face and make the most of the opportunities on offer.
It’s an approach we’ve already taken with many other business sectors.
But of course, sport is not like any other business.
It’s something much bigger.
And if you remember that…
If you put the needs of the fans and athletes ahead of the demands of your bottom line…
If you put hopes and dreams ahead of pounds and pence…
Then the possibilities for your business are unlimited.
And the UK sports industry will stay on the top step of the podium for many years to come.