Sports Industry

At the highest level the sports industry generates billion of dollars of revenue around the world each year. Football is the most popular and most watched sport in the world today. Millions of people go to games every week and even more watch matches on television. In America the most popular sports are baseball, basketball and American football.

The sports industry generates most of its money in 4 ways. The first and most important of these is TV rights-the rights to show live matches and games on television. This generates so much money because TV companies can use it to sell subscriptions to their channels and sell advertising space between breaks. Secondly companies pay large amounts of money in sponsorship and to have their brand associated with a particular team. The third way is merchandise. There is a massive range of different goods available ranging from replica kits and baseball caps to mugs and dvds. Finally the money generated from crowds who go to watch the games earns large amounts of revenue.

Although the sports industry generates huge amounts of money some teams struggle financially. This is due to the large wages paid to top sportsmen and women. In some cases wages can account for up to 80% of a sports team turnover. The sports industry is also affected by the economic cycle. In times of recession revenue goes down as money spent on sports subscriptions and tickets is seen as a luxury good.