Sport Sector Strategy for England’s Northwest 2010-2020
NORTHWEST REGION: SPORT SECTOR STRATEGY
Section
Page
OVERVIEW
i
1. Purpose of the Strategy
1
2. Policy and general context
4
2.1
International, European and national policies and strategies
4
2.2
Regional policies and strategies
5
2.3
Links to cross-cutting themes
7
2.4
Best practice sector / cluster development
8
3. Market Analysis
10
3.1
Overview
10
3.2
Scale of sector globally, nationally, in the Northwest and sub-regionally
10
3.3
Key sub-sectors/niches
16
i
Major sports venues and professional clubs
16
ii
Outdoor Adventure sports
19
iii
Advanced Flexible Materials (AFM) for sport
23
iv
Specialist businesses supplying the sports sector
24
3.4
Historic trends
25
3.5
Sport Sector PESTEL analysis
27
3.6
Overall sector SWOT analysis
33
3.7
Future trends and projections
37
3.8
Impact of doing nothing
41
4. Strategic Framework and action plan 4.1
Strategic aims
42
4.2
Strategic themes and cross-cutting principles
43
4.3
Key performance measures
43
4.4
Action Plan (see Appendix 1)
43
5
Implementation
44
5.1
How are we currently organised to deliver?
44
5.2
How will we organise ourselves to deliver?
45
5.3
Key delivery bodies and accountabilities
45
5.4
Governance and control mechanisms
46
Appendices I
Sport Sector Strategy Action Plan
2
Data notes and glossary
3
SIRC/Sport England Study
4 Business support activities 5
42
Data accuracy
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
OVERVIEW Although not identified as a priority sector in the current Regional Economic Strategy (RES), the sport sector is vitally important to the Northwest. Reference is made in the RES to sport in relation to a broad range of key economic development issues: workforce development, sector growth, health and wellbeing, productivity, marketing, visitor economy and major events. Sport, therefore, is considered to have a significant and far-reaching impact on the prosperity of the region’s economy. Whilst there is a strategy at a national level to encourage increased participation in sport, primarily for health benefits, there is no equivalent strategy which focuses on developing sport as a business sector. The multi-faceted nature of sport makes this a difficult task. However, this strategy aims to provide a framework for the development of the sector in the Northwest region over the next ten years, maximising its economic growth, and taking into consideration the broad range of agendas to which sport is related. Sport makes a unique contribution and is hugely important to the region’s image and profile. The Northwest is home to international brands such as Manchester United and Liverpool FC. The region has an excellent sporting infrastructure, strong cluster of professional sport clubs and a celebrated world-class outdoor environment. Its enviable reputation for hosting major sporting events, including the Grand National and the Open Golf Championship, has been built upon the successful delivery of the 2002 Commonwealth Games in Manchester. The region is also home to a significant number of head offices (e.g. Adidas, DW Sports and Fitness, JD sports, Total Fitness, The Football League, and British Cycling). The sport sector in the Northwest is a vital component of the sector in England. The sector in the Northwest performs above the national average against a number of key indicators, such as number of sport businesses, employees and percentage of regional turnover generated. The sector comprises 8,350 businesses, employs 97,565 people and generates a turnover of £6.5 billion. 91% of all businesses in the sector are SMEs and micro-businesses. They only provide 22% of jobs and 23% of the turnover, however, suggesting that a small number of large businesses generate the wealth for the sector. This is linked to the number of head offices based in the Northwest and low productivity amongst SMEs. Recent research undertaken for the Regional Intelligence Unit (2000) confirms that the GVA of ‘sport’ in the Northwest was £1.26 billion and rose to £1.9 billion by 2006. GVA per fulltime equivalent employee rose from £20,700 per annum to £28,300 per annum, representing a growth of 36.7% – which was higher than the national average (34.0%). In addition, the sport sector is a key market for other industry sectors such as Digital & Creative Industries, Financial & Professional Services, Food & Drink, Manufacturing and the Visitor Economy, generating significant secondary spend in and for the region’s economy. Sport will play a significant role in MediaCityUK as BBC Sport and Radio Five Live are relocated from London to the Northwest in 2010. Increasing reference is being made to the ‘golden decade of sport’ which the UK will be experiencing from 2010 following its success in attracting a significant number of world championships and major sport events over the next ten years. Events attracted include, London 2012 Olympic Games & Paralympic Games, Rugby League World Cup – 2013, Commonwealth Games 2014, Glasgow, Rugby Union World Cup – 2015, World Cup (football) bid – 2018 and World Cup Cricket – 2019. It is recognised that these events and other major sport events that are held in the UK and within the Northwest will put sport under the spotlight for the next decade as well as creating considerable businesses opportunities for Northwest companies.
Final Report – March 2010
Knight, Kavanagh and Page
i
NORTHWEST REGION: SPORT SECTOR STRATEGY
Sport is vital to creating a region that is an attractive place for people to live, work, invest and visit. It also plays a valuable role in both urban and rural regeneration and in the creation of sustainable communities. For example, Sport City, a key legacy from the 2002 Commonwealth Games, created 6,300 full-time jobs, generated £22 million in turnover for local businesses and attracted £570 million of investment in East Manchester. Sport also has a unique role to play in tackling wider socio-economic agendas such as social inclusion, crime reduction and worklessness by using the power of its brand to communicate with, and motivate, disaffected people and communities.
Vision The vision for the Northwest sport sector is: A cluster of forward-looking businesses, focused on the delivery of leading edge products and services to businesses, individuals and communities. As well as supporting economic growth, the sector will promote social inclusion, community and physical regeneration, and improved health amongst the population whilst developing the Northwest as the premier UK region for sport.
The key aims and strategic priorities for the region are:
Retaining and supporting the growth of new and existing sport businesses Increasing innovative activity in the sector to improve product development and service delivery Promoting the coordination of activity to maximise investment into the region; and Maximising the economic, social and health benefits of sport to individuals and communities across the Northwest
Delivery against, and achievement of, these aims is structured around a series of specific themes and objectives and an action plan. A brief outline is provided below, while greater detail is provided at the end of the report and in the detailed action plan in Appendix 1. Strategic theme 1: Networking and support a. b.
To provide sport businesses with access to the right support to increase their competitiveness and productivity. To support sport businesses to export.
Strategic theme 2: Innovation a.
To improve the sport sector’s ability to adopt new products and processes and innovate to increase productivity.
Strategic theme 3: Place-making, image and profile a.
To promote the Northwest as a world-class location for sport businesses in order to attract further investment.
b.
To attract and develop sport events of national and international standing.
c.
To raise the profile of the region as a destination of choice for outdoor adventure businesses and sport tourism.
Final Report – March 2010
Knight, Kavanagh and Page
ii
NORTHWEST REGION: SPORT SECTOR STRATEGY
Strategic theme 4: Skills a.
To develop the skills base of the existing and future workforce to meet the needs of the sector.
Strategic theme 5: Infrastructure a.
To develop the right infrastructure to support the growth of the sport sector in the Northwest. To encourage the development of the outdoor adventure offer in the Northwest, including improvements to the infrastructure to meet the future needs of consumers.
b.
Strategic theme 6: Health, community and regeneration a. b.
To maximise the contribution of sport to health, community and regeneration agendas. To increase levels of participation in sport in the Northwest, especially amongst underrepresented groups, linked to maximising business opportunities
Strategic theme 7: Strategic influencing a.
To ensure maximum leverage of investment into the region to support the development of the sport sector.
Cross-cutting principles The three cross-cutting principles for the strategy are:
Sustainability – ensure that the development and growth of the sport sector in the Northwest is economically, socially and environmentally sustainable in the long term.
Connectivity – ensure that all parties including consumers and businesses in the sport sector make the best use of ICT and digital technologies to maximise growth in the sector.
Accessibility – ensure that the development and growth of the sport sector is inclusive to all businesses, individuals and communities.
Implementation and delivery The strategy will be delivered by the NWDA. A small, strategically focused Sport Sector Advisory Group will be established to oversee implementation. Its membership, led by the NWDA, will be sought from invited stakeholders and sport business representatives. The Group will co-opt individuals with specific skills for time-limited projects where appropriate. In addition, a Sport Sector Operational Group will also be established, led by NWDA, to coordinate and review the delivery of an annual work programme. This group will include representatives from organisations including Business Link Northwest, UKTI, SRPs, SkillsActive and National Skills Academy (NSA).
Final Report – March 2010
Knight, Kavanagh and Page
iii
NORTHWEST REGION: SPORT SECTOR STRATEGY
1.
PURPOSE OF THE STRATEGY
The purpose of this strategy is to provide a framework for the sustainable development of the sport sector in the Northwest. A quantitative analysis of the sector which details its economic impact on the region provides a backdrop to the strategy. The strategy proposes appropriate mechanisms for public sector intervention and outlines key actions that, if implemented, will have a positive impact upon the sector’s growth over the next ten years. The sport sector is unique in its contribution to the economy of the Northwest. It is different from the other sectors prioritised in the RES due to the extent of its indirect as well as its direct socio-economic impact on the region. Sport as a business sector generates far more than GVA and employment for the region, as illustrated in Figure 1. It also has a direct impact on communities, in terms of social inclusion and community regeneration, and the health and wellbeing of individuals as far as participation is concerned. It is also an important market for other sectors such as Digital & Creative Industries, Food & Drink, Manufacturing, Financial & Professional Services and the Visitor Economy. Figure 1: Impact of the Sport Sector Strategic impact
Increase productivity
International trade
Outcomes
Inward investment
Grow the workforce
3rd sector
Social inclusion
Improved Health
Physical regeneration
Employment
Community regeneration
Government policy to increase participation
Government policy to tackle obesity
Tourism Development
Supply chain Opportunities Image of the region Enterprise (inc. social)
Sport Sector
Drivers
Consumer demand
Technological advancements
Major events e.g. 2012
New outdoor sports
Final Report – March 2010
Knight, Kavanagh and Page
1
NORTHWEST REGION: SPORT SECTOR STRATEGY
Definition There is currently no universal definition of the sport sector. Instead, a number of different definitions have been generated by bodies such as Sport England, sportscotland, SkillsActive and the Council of Europe to reflect their respective roles in its development. For the purposes of this strategy, the following definition has been developed, in consultation with key partners and stakeholders: Businesses involved both directly and indirectly in the provision, delivery and servicing of sport, casual and organised, through participation and spectating, which contribute to physical and mental health and wellbeing, whether this is for communities or individuals. Methodology The methodology applied to develop the strategy included: Definition of the sector – core and supporting activities Quantitative analysis of the scale and distribution of the sector throughout the region
using standard industrial classification (SIC) data as detailed in Table 1 Qualitative interviews with over 60 key representatives from across the sector. Consultation workshops with public sector stakeholders and businesses from across the
sector Consultation on the draft report and action plan to consultees prior to production.
Appendix 2 provides further information on the data used as part of the methodology. Links to other studies Running parallel to and informing the development of, this strategy, work has been undertaken on several other key studies:
Outdoor Adventure – production of a strategy for the outdoor adventure sector in the Northwest, including consultation with public and private sector stakeholders. Advanced Flexible Materials – commissioning of a mapping study to review sport’s contribution to the AFM sector in the Northwest linked to the global sport industry. Major Sport Venues and Professional Sport Clubs – completion of in-depth consultation and production of a report into the key findings, with a representative sample from this sub-sector.
Table 1: Standard Industrial Classifications used to define the sports sector The sports sector – Standard Industrial Classification codes 3542 : Manufacture of bicycles 9234 : Other entertainment activities not elsewhere classified 3512 : Building repairing of pleasure boats, etc 3640 : Manufacture of sports goods 5521 : Youth hostels and mountain refuges 5248 : Other retail sale: specialised stores 7140 : Renting: personal/household goods not elsewhere classified 9304 : Physical wellbeing activities 9261 : Operation of sports arenas and stadiums 9262 : Other sporting activities
Final Report – March 2010
Knight, Kavanagh and Page
2
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 2 provides a visual illustration of the sector. It illustrates those businesses located at the core of the sector and highlights the inter-relationships between the core and businesses in other sectors such as Construction, Financial & Professional services and the Digital & Creative sectors. These both draw business from, and are fundamental to, the growth of the sport sector. Figure 2: Defining the sports sector – a detailed overview
Copyright: NWDA/Knight, KavanaghandPage
Final Report – March 2010
Knight, Kavanagh and Page
3
NORTHWEST REGION: SPORT SECTOR STRATEGY
2.
POLICY AND GENERAL CONTEXT
2.1 International, European and national policies and strategies International Internationally, sport is a growing marketplace of ever-increasing political and economic significance. Sport, and in particular major sport events, is frequently used as a catalyst to position (or reposition) cities and regions on the global stage. Major events such as IPL cricket, Formula One motor racing, the Ryder Cup, the cycling, tennis and golf circuits, Beijing 2008, London 2012 and many others are not just platforms for sport but have major international political, economic and social profiles. European The General Meeting of the EU Sports Directors1 (February 2008) re-confirmed Member State priorities for implementing the ‘Pierre de Coubertin’ Action Plan, emphasising the role of sport in the following areas:
Societal: health-enhancing physical activity, support for volunteering and cooperation to tackle doping, violence and corruption. Economic: its economic importance and the sustainable public and private financing of grassroots sport in Europe.
It also mentioned the notion of the ‘specific nature of sport’, referred to in Article 149 EC as amended by the Lisbon Treaty2 and based on the Nice Declaration of 1999: the Community must, in its action under the various Treaty provisions, take account of the social, educational and cultural functions inherent in sport and making it special, in order that the code of ethics and the solidarity essential to the preservation of its social role may be respected and nurtured. This Strategy is consistent with the Lisbon Treaty, which aims to make the EU ‘the most dynamic, competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010’. National The Department of Culture, Media and Sport (DCMS) report Playing to Win: A New Era for Sport (2008) outlines the government’s vision to create a world-leading sporting nation by 2012. It confirms the roles of UK Sport, Sport England and the Youth Sport Trust in delivering investment in sport, while others such as the Department of Health (DoH) will lead on physical activity. The strategy confirmed the importance of creating a legacy from the London 2012 Olympic and Paralympic Games and increasing physical activity throughout the country through the stated ambition ‘to get two million more people more active by 2012’. It confirms the following priorities:
1 2
PE and Sport Strategy for Young People (PESSYP) – investing at least £783 million over the next three years to create a world-leading system for PE and sport. UK Coaching Framework – Sport England, UK Sport and the Youth Sport Trust will work with Sports Coach UK to create a world-leading coaching system by 2016.
Brdo pri Kranju, Slovenia, 4-5 February 2008. The Lisbon Treaty was set out by the European Council in March 2000.
Final Report – March 2010
Knight, Kavanagh and Page
4
NORTHWEST REGION: SPORT SECTOR STRATEGY
UK Sport – from 2006-2013, over £600 million will be invested in 24 Olympic sports and all 20 Paralympic sports with the aim of achieving 4th place in the medal table for the UK at the 2012 Olympic Games, and 2nd place in the 2012 Paralympic Games – with a further aim to move towards 1st place.
The role of Sport England (SE) has recently been reviewed to improve efficiency, clarify roles and respond to London 2012. SE’s new strategy aims to get more people playing and enjoying sport and to help those with talent get to the very top. The overarching aim is to create a world-leading community sport system of sport clubs, coaches, volunteers and facilities, delivering by 2012/13:
1 million people doing more sport (including priority groups) – including a regional target of 132,5143 A 25% reduction in the number of 16-year-olds who drop out of five key sports4 Improved talent development systems in at least 25 sports A measurable increase in people’s satisfaction with their experience of sport A major contribution to the delivery of the five-hour sports offer for young people.
In February 2009 the Department of Health (DoH) published Be Active, Be Healthy, their new framework for the development of physical activity for the period up to 2013. It sets out new ideas, in particular for local authorities and primary care trusts (PCTs) to determine and respond to the needs of their communities in increasing the number of people taking part in regular physical activity. However, whilst these policies exist at national level, there is no national policy context for the development of sport as a business sector. Strategies published by central Government and Sport England are, however, still important for the sector and the associated investment and programmes will stimulate the market, as a result of driving up participation in sport. 2.2 Regional policies and strategies Sport is not identified as a priority business sector in the current Regional Economic Strategy (RES 2006). However, the RES does highlight sport’s contribution to growing the workforce, wellbeing, increasing productivity, marketing the region and attracting visitors to the Northwest through major events. It makes specific reference to the need to develop the business of sport. Specific RES Actions include: 46
To develop innovative approaches, including intermediate labour market activities, to engage and motivate people in work/training 59 To promote access to sport and physical activity to improve health, employee fitness and increase productivity. 98 To secure sports, business and cultural events and conferences for the region to host in line with the Major Events Strategy. 99 To develop supply chain, business and marketing opportunities linked to major events, including London 2012. 100 To develop plans to exploit the predicted business opportunities in the growth of sport. Several other regional strategies recognise the contribution of sport to the economic development of the Northwest: 3
Target based on an apportioned share of the 1 million people, using the ONS 2006 based sub-national population projections. 4 Sport England has yet to determine which the five primary sports are – the reduction of 25% will relate to the current proportion of 16-year-olds dropping out of sport to set a target. The objective will be to reduce this target by 25% – thus if, for example, 40% currently drop out of sport at 16 the target would be to lower this to 30% by 2012/13. The total number of 16-year-olds in the Northwest in 2012 will be 85,310.
Final Report – March 2010
Knight, Kavanagh and Page
5
NORTHWEST REGION: SPORT SECTOR STRATEGY
A Strategy for Major Events in England’s Northwest (March 2004) The Northwest has been successful in hosting major national and international events, such as the Grand National and the Open Golf Championship, which both improve the image of the region and generate economic activity. Over the last two years, events supported by the NWDA have resulted in 1.2 million visitors, 180,000 bed nights and a £40 million contribution to regional economy. This strategy builds upon the successful Commonwealth Games in 2002 that demonstrated the capability of the Northwest to host one-off major events. An assessment of the long-term direct effects of the Commonwealth Games highlighted the creation of 6,300 full-time jobs and a £22 million increase in turnover reported by local businesses. Major sport events are a strong feature of this strategy, building upon the sporting strengths of the region. Strategy for Tourism in England’s Northwest 2003-2010 Sport is a significant contributor in the region’s tourism strategy. This brings together the five sub-regional tourist boards to drive up the quality and range of facilities and attractions in the Northwest. Sport fits perfectly with its key objective ‘to market the region to an increasingly broad range of potential visitors’. This is built upon the recognition that sport has become an integral part of holidays, whether it takes the form of attendance at a particular event or participation in a particular sporting activity. A number of sport tourism initiatives have been developed, including Year of Sport 2008 (Marketing Manchester) and Year of Adventure 2008 (Cumbria Tourism); building upon the strengths of sub-regions, to attract increased numbers of visitors. Manufacturing Strategy & Action Plan for the Northwest (2008) The region recently produced a Regional Manufacturing Strategy. . Given the evidence of the growth in demand for sport equipment and clothing, further work may be required to fully determine the impact of this growth in stimulating new business opportunities in the manufacturing sector in the Northwest. Northwest Enterprise Strategy The Northwest Enterprise Strategy (2008) provides a framework for encouraging enterprise by both encouraging new business start-ups and developing an ‘enterprise culture’ to increase productivity in the region. This will be achieved through maximising the competitiveness of existing businesses and supporting a growing supply of entrepreneurs. The strategy also recognises the significant role enterprise has to play in improving communities. The strategy does not make specific reference to sport, although it is recognised that sport can play a significant role in promoting enterprise activities, by using the profile and power of its brand. Examples of such activities include the engagement of Burnley, Blackburn Rovers and Accrington Stanley football clubs, using sport to promote a stronger enterprise culture through the Local Enterprise Growth Initiative (LEGI) project and the piloting, at Manchester City FC, of a new BERR (now BIS) and the Premier League enterprise initiative. Study into Advanced Flexible Materials (AFM) in the Sport Sector in the Northwest NWTexNet has commissioned a strategic mapping study of the AFM sector in the Northwest with the aim of producing a 15-year vision designed to optimise the sector’s potential and that of associated strategies and action plans for NWDA, NWTexNet and other support agencies. Within the overall cluster study, the interface between the vibrant Northwest sports sector and the AFM cluster was identified as an area that requires closer attention.
Final Report – March 2010
Knight, Kavanagh and Page
6
NORTHWEST REGION: SPORT SECTOR STRATEGY
In order to feed into this strategy an interim report was produced looking specifically at the sports applications of AFM in the Northwest. This focuses on the AFM/Sports interface in the Northwest by looking first at the use of AFM for the global sports industry and then at the sports clothing, footwear and equipment supply chain in the Northwest. NWTexNet is currently reviewing the conclusions linked to the implementation of its vision for the sector. Northwest Strategic Facility Evidence Base Sport England (Northwest) has produced a report into the evidence for investment in major facility and infrastructure projects. The report recognised that sport facilities are important in expanding and sustaining the sport sector and in increasing participation. The report will be a reference point for future strategic facility needs, and the evidence base is there to help organisations make their case. It also supports the delivery of Sport England’s National Strategy. The intention is to refresh this evidence base bi-annually through the National Governing Body planning process, changing priorities of Regional Agencies and Local Government, and taking into account any further opportunities arising through the private, HE/FE and third sectors.
2.3
Link to cross-cutting themes
Internationalisation The global significance of the sport sector is increasing, especially in terms of the growth in major events and the use of sport as a key driver to regenerate and reposition cities and regions. The greatest opportunities for the sport sector in the Northwest will be to continue using the region’s global sport brands in international marketing campaigns and to capitalise on the specialist businesses that could supply goods and services to major sport events. Skills The sector will need to address a number of critical skill and workforce development issues in the future if it is to be able to respond to the predicted growth in the sector. Specific needs will be different for the prioritised sub-sectors and involve a combination of raising skill levels, attracting and growing the workforce to respond to the increased demand for coaches, and improving leadership across the sector. The development of the National Skills Academy (NSA) for the sport sector will play an important part in future provision. The location of the National Hub for the Outdoors in the Northwest is a significant opportunity for the Northwest to ensure that it levers maximum benefit from the NSA. Equality & diversity Government policy to increase participation in sport and tackle health inequalities focuses particularly on under-represented groups. Increasing the participation of such groups will also contribute to the creation of new business opportunities and present niche opportunities for diverse businesses to respond to market trends. The sport sector is in a unique position to help tackle the socio-economic issues that affect the future economic prosperity of all communities and of the region as a whole, as prioritised in the RES. This may not have a direct impact on increasing GVA but will still support delivery of RES outcomes. Climate change Rising to the Challenge – The Northwest Climate Change Action Plan (2007-2009) aims to reduce carbon dioxide emissions by influencing the attitude and behaviours of all interest groups. It aims to reduce energy demand and to promote low carbon technologies whilst ensuring that mechanisms are put in place to adapt to future climate change. Final Report – March 2010
Knight, Kavanagh and Page
7
NORTHWEST REGION: SPORT SECTOR STRATEGY
The sport sector is slowly responding to this agenda. There are examples of professional sport clubs reducing their use of resources such as energy and water, and increasing the recycling of waste. The new British Standard for Sustainable Event Management and London 2012 will raise the profile of this agenda further, creating opportunities for sport businesses, particularly those specialist businesses that supply the sector.
2.4
Best practice sector / cluster development
Various case studies outlining the development of sport as a business are shown below. Gold Coast Sports Business Taskforce The Gold Coast Sports Business Taskforce is an industry-based body that undertakes promotion, marketing and networking to attract sports business to Gold Coast City, Australia. The collective vision is for the City to be a premier sports destination and world-class supplier of sport goods and services. Task Force Members aim to:
Share in the vision and commit to the goals, actions and marketing plans. Apply knowledge and skills to drive achievement of its action and marketing plans. Work co-operatively to achieve goals/actions outlined in action and marketing plans. Promote the Sports Business Task Force. Liaise regularly with the industry development officer for sport.
Australian International Sporting Events Secretariat The Australian International Sporting Events Secretariat (AISES) partnership, established by the Victorian and New South Wales Governments, promotes the combined business expertise arising from the Melbourne Commonwealth Games and the Sydney Olympic Games to future games organising committees such as those involved in the Delhi 2010 Commonwealth Games, the Guangzhou 2010 Asian Games, Sochi 2014 and London 2012. Its role is to assist event organisers around the world by providing coordinated access to Australian event experts and companies that have developed a strong reputation in the global sporting events market. It presents their capabilities as world-class, proven, innovative and adaptable to the circumstances of each location. It also builds upon the global recognition of Melbourne and Sydney as sporting hubs that regularly hold successful world events such the Formula 1 Grand Prix and the Australian Tennis Open. Loughborough Innovation Centre Loughborough is generally recognised as one of the UK’s premier universities for sports development, research and teaching. In conjunction with UK Sport and Sport England, it has built a package of high-performance sport facilities as part of the English Institute of Sport to supplement its already extensive resources. Generic support facilities (such as acclimatisation, accommodation, conditioning suites, sport massage, physiotherapy, sport medicine rooms and sport science laboratories) have been upgraded and expanded. It has a close association with various national governing bodies of sport (NGBs), 22 of which now have headquarters in the East Midlands. In addition, an £8 million ‘Loughborough Sports Park’ has been developed adjacent to the University to grow the sports ‘cluster’ and to accommodate various NGBs. It also has a close association with various research and development projects and related commercial organisations, thus combining athlete development and commercial product development.
Final Report – March 2010
Knight, Kavanagh and Page
8
NORTHWEST REGION: SPORT SECTOR STRATEGY
SportsPulse SportsPulse is a public-private partnership, part-funded by the European Union's Regional Development Fund (ERDF) Objective 1, tasked with developing the sports business sector of South Yorkshire. Partners include: Sheffield Hallam University's Sports Engineering Research Group, ANSYS, Montgomery Leisure Services, Sheffield International Venues and HD Sports. It seeks to build upon the location of major sports facilities, universities with a relatively strong track record in sport, Sheffield City Council and local businesses. Its overall aim is to stimulate the development of an economic cluster of sports-related businesses in South Yorkshire by:
Facilitating a ‘hothouse’ forum for new ideas to thrive. Introducing new technologies to the sports and leisure industry. Enabling new product commercialisation. Creating new businesses and jobs for the sector. Generating innovative sports solutions. ‘Pushing the boundaries’ of science and technology in sport.
SportsPulse actively promotes its activities and has sought to bridge the gap between research into athlete conditioning, product development and the interactive games environment as a route to showcasing its sports science and engineering expertise on an international stage. At an exhibition in Beijing in the lead-up to the 2008 Olympics, it combined a large, highly interactive and informative exhibition with a high-profile lecture tour. The exhibition is reported to have attracted more than 70,000 visitors, while an estimated 10 million people saw it on television. The online version reportedly received more than 3 million visitors – all over a six-week period. Applying the key learning points to the Northwest The Northwest has an enviable profile and reputation in sport linked to its world-class sport facilities, the hosting of international sport events and a growing cluster of businesses with a proven track record of supplying sport events and infrastructure projects. The potential development of a sporting hub is closely linked to the clustering of venues and activities at Sportcity, the National Squash Centre, the National Velodrome, the Manchester Aquatics Centre, the Region’s representation in Premiership football, Super League rugby league, Premiership rugby union, international and county cricket and England’s Golf Coast. This extensive range of facilities is supplemented by a first-class range of support businesses and high quality academic provision. The potential is illustrated by the growing recognition of the World Academy of Sport (WAS) as a world-leading centre for the education of sport and major event organisers. In addition, the potential is strengthened by Manchester Metropolitan University’s sports research plus the presence of key specialist financial and professional service businesses such as Brabners Chaffe Street, Addleshaws, and Halliwells, high-profile UK consultancy practices with specific sports divisions (Deloitte and Drivers Jonas Sport Unit) and specialist sports consultancies (Knight, Kavanagh & Page and Strategic Leisure). Further opportunities exist to develop stronger links between the delivery of sport and the implementation of new technologies to support sector growth. The development of strong linkages between businesses and universities through technology-related partnerships is critical to achieving success.
Final Report – March 2010
Knight, Kavanagh and Page
9
NORTHWEST REGION: SPORT SECTOR STRATEGY
3.
MARKET ANALYSIS
3.1
Overview
The following section provides a comprehensive analysis of the sector: its structure, role, competitive attributes and contribution to the economy of the Northwest.
3.2
Scale of sector globally, nationally, in the Northwest and sub-regionally
Globally, varying analyses exist for the value of the global sports market depending on the definition used. For example, PricewaterhouseCoopers (2008) focused on live sporting events, gate revenues, media and associated merchandising. It envisaged 37% growth to $141 billion over five years, thus defining the 2007 market value to be around $103 billion. Global Industry Analysts focused on sports and fitness clothing; they envisage continued growth to $126.8 billion by 2010 due to changing lifestyles and a blurring of the lines between fitness clothing and casual wear. 5
Nationally, at enterprise level, the sport sector comprises
67,900 businesses; employs 635,745 people and; generates a turnover of £44.25 billion.
Regionally, the sport sector comprises:
8,350 businesses; employs 97,565 people and; generates a turnover of £6.5 billion.
The sport sector is dominated by SMEs and micro-businesses; they account for 91% of all businesses in the sector. However, they only provide 22% of the sector’s jobs and 23% of the sector’s turnover. When compared across the whole economy, the Northwest sport sector has a higher than average number of SMEs (87% across the whole economy) which sustain a larger number of employees (17% across the whole economy). However, they deliver less than average turnover (19%). This suggests that a small number of large businesses generate the wealth for the sector, linked to the number of head offices based in the Northwest and low productivity amongst SMEs. Recent research undertaken for the Regional Intelligence Unit has sought to map the GVA contributions of NWDA priority sectors to the overall economy of the Northwest. At the same time, the research assessed the contribution of sport as a cross-cutting sector to the regional economy, as well as employment trends and productivity trends. In 2000, the GVA of 'sport' within the Northwest was £1.26 billion and rose to £1.9 billion by 2006. This 50.5% rise was marginally smaller than the national rise of 54.0% while growth in employment was also marginally less. However, a key indicator was the growth in sport productivity in the Northwest. The research suggested that GVA per full-time equivalent employee rose from £20,700 to £28,300 per annum. This represented a growth of 36.7% over the period and was higher than the productivity growth nationally (34.0%).
5
Enterprise data (see Appendix 2 for details).
Final Report – March 2010
Knight, Kavanagh and Page
10
NORTHWEST REGION: SPORT SECTOR STRATEGY
A study conducted by Sport England and the Sport Industry Research Centre (SIRC) (2008) assessed the economic value of sport across England via an approach 6 linked to consumer behaviour; while different to the NWDA methodology,7 it confirms that the Northwest has a strong presence in terms of consumer spend on sport. Further details are provided in Appendix 3.
4.2% of Northwest companies are sports-based, compared to 3.9% for England. 3.7% of employees work in sports-based companies, compared to 2.7% for England. 3.0% of turnover is generated by sports companies, compared to 1.3% for England.
The sport sector in the Northwest generally performs above the national average, confirming that the region plays a significant role in England’s sports sector. The Northwest contains 13.4% of the country’s total population and 13.3% of England’s working-age population and it scores around or above this level on a series of key measures:
15.3% of England’s sports employees are in the region. 14.7% of England’s business turnover for the sector is from the Northwest. 12.3% of England’s sport sector companies are in the Northwest. 11.6% of the national GVA8 for the sport sector is in the Northwest.
Sport Infrastructure – Regional Picture A recent report by Sport England – Northwest9 presents an evidence base for the sporting infrastructure in the Northwest. It found that 345 of the region’s sports halls were built before 1975 and a further 125 have been built since that year. Provision in Greater Manchester is higher than the NW regional average and the national level whereas Lancashire and Merseyside have slightly lower levels of provision than the regional average. No local authority area in the region exhibits levels of unmet demand to justify new sports hall provision now or by 2018, but enhancement of existing sports facility provision, along side rationalisation and replacement as appropriate, is the key requirement across the region. Priority areas for investment (up to 2018), if new facilities are to be provided, include:
Cumbria – Eden and South Lakeland Cheshire and Warrington – Warrington Greater Manchester – Manchester, Salford Lancashire – Burnley, Lancaster
With the exception of Cheshire and Warrington and Greater Manchester, according to Sport England’s analysis the NW region does not have sufficient unmet/unsatisfied demand to justify additional swimming pool provision. However, investment in existing stock to improve quality, or rationalisation to improve quality is a priority. Priority location areas for such investment would be:
Cheshire and Warrington – Warrington Cumbria – Copeland and Eden Greater Manchester – Manchester and Wigan Lancashire – Lancaster and Preston Merseyside – Sefton
6
The basic principle is one of equality between total output, total income and total expenditure. The NWDA study is closely aligned to employment and business numbers and reflects the approach adopted by the agency for all sector assessments. 8 See glossary in Appendix 2 for GVA data issues. 9 Northwest Strategic Facilities Evidence Base (2008). 7
Final Report – March 2010
Knight, Kavanagh and Page
11
NORTHWEST REGION: SPORT SECTOR STRATEGY
Sub-regional variations There are marked sub-regional variations in the characteristics of the sport sector (Figure 3). Cheshire contains 1,385 sports businesses, which provide 21,180 jobs and generate an annual turnover of £1.7 billion. This represents 4.3% of Cheshire’s businesses, 5.0% of its employees and 3.9% of its business turnover. The sector is characterised locally by successful businesses that provide a relatively high level of employment and have seen high growth rates over recent years. Cheshire has a considerable proportion of the region’s equestrian businesses. Cumbria contains 860 sports businesses, providing 4,965 jobs and generating turnover of £0.4 billion. This represents 4.2% of Cumbria’s businesses, 3.5% of its employees and 3.9% of business turnover. The sport sector in Cumbria is characterised by relatively small businesses that make a significant contribution to the sub-regional economy. Recent years have seen above average growth in business numbers and turnover but a smaller increase in employee numbers; pointing towards a large number of successful but small businesses. Outdoor adventure is particularly important in Cumbria. While it is home to 10% of Northwest sports businesses across the sector it is the base for 27% of the region’s outdoor sports businesses despite the fact that only 6.7% of the region’s working age population reside in the county. This, however, masks the number of jobs involved as many companies, particularly in sport are relatively small. Greater Manchester - As might be expected, Greater Manchester is the region’s ‘dominant force’ in the sport sector. It is home to 2,775 (33% of) the region’s sports businesses and 38% of the region’s working-age population. These businesses employ 43,330 people (44% of sport sector employees in the region), and generate £2.6 billion in turnover (40%). The sector represents 3.9% of Greater Manchester businesses, 4.2% of employees and 3.1% of turnover. It performs well for number of employees and turnover. It has a slightly smaller number of businesses than might be expected but is, nonetheless, the ‘hub’ of the region, especially in relation to the concentration of major sport venues and professional sport clubs. It has also continued to grow over recent years, albeit at a slower rate than other parts of the Northwest such as Cheshire. Greater Merseyside (including Halton) contains 1,310 sports businesses. They provide 8,755 jobs and generate an annual turnover of £0.6 billion. This represents 4.3% of Greater Merseyside’s businesses, 1.8% of its employees and 1.5% of its business turnover. The sector is characterised locally by comparatively few/small businesses, relatively low turnover and, compared to the other areas, less strong performance over recent years, despite the number of professional sport clubs located in the sub-region. Lancashire contains 2,020 sports businesses; they provide 19,335 jobs and generate an annual turnover of £1.2 billion. This represents 4.4% of Lancashire’s businesses, 3.8% of its employees and 3.0% of its business turnover. The sport sector in Lancashire is slightly above the regional average for numbers of businesses and employees. Lancashire also has the largest proportion (and number) of outdoor sport businesses within the region (32%), including nine of the 13 businesses in the sector with a turnover of £1 million or more. In recent years it has seen comparatively high growth rates in terms of businesses and employees, but the increase in turnover, while high, has been below the regional sector average.
Final Report – March 2010
Knight, Kavanagh and Page
12
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 3: Sports businesses in the NW – All sports and outdoor sports10 Regional share - All sports and Outdoor sports 40.0%
38.1%
35.0%
33% 32%
30.0% 27% 24%
25.0% 21.6%
21%
20.9%
20.0% 17%
15.0%
16% 13%
12.7% 10%
10.0% 7%
6.7%
5.0%
0.0% Cheshire
Cumbria
Working age population
Greater Manchester
Greater Merseyside
All sports
Lancashire
Outdoor sports
The sports sector at local authority level, head offices and SMEs The Northwest authorities with the highest number of sport businesses are South Lakeland, Sefton, Liverpool, Wirral, Wigan, Bolton, Trafford, Manchester, Stockport and Macclesfield. However, Wirral, Bolton, South Lakeland and Sefton are at the bottom of the second quartile in terms of employee numbers. The highest recorded number of employees is in Wigan and Bury, with 7,771 and 15,070 employees respectively. This is due to the ‘head office effect’, as the two authorities are the national headquarters for JJB and JD sports respectively. It is also influenced by key differences between Enterprise and Unit level data. Enterprise data is based on the location of company management premises (as a result, all direct employees are associated with this location). Unit-level data, meanwhile, reflects employment according to an individual’s actual place of employment. The geography of employment11 at a local authority level varies significantly dependent on whichever definition is adopted. In Figure 4 the height of the bar indicates the number of employees based on Enterprise data and thus includes the head office effect, whereas the line shows the actual workplace of employees. The difference between the two reflects a measure of net-relocation between the two datasets – both of which are valid. This is particularly apparent for Chorley, Macclesfield, Crewe & Nantwich, Bury and Wigan all of which contain sports sector ‘head offices’.
10 11
Source: NWDA Outdoor sports study (Tribal consulting). See appendices for detailed sector reports from both Enterprise and Unit standpoints
Final Report – March 2010
Knight, Kavanagh and Page
13
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 4: Employees at local authority level by Unit and Enterprise level Sport - Employees Enterprise -v- Units (2006)
JJB
16,000 14,000 12,000 10,000 8,000
Businesses:
8,350 (Enterpriselevel) 11,025 (Unit level)
Employees/jobs:
97,565 (Enterpriselevel) 79,450 (Unit level)
Turnover:
£6.5bn (Enterpriselevel)
JD
Total Fitness
6,000 4,000
Bury
Wigan
Crewe and Nantwich
Chorley
Macclesfield
Manchester
Preston
Liverpool
Warrington
Trafford
Congleton
Oldham
Stockport
Sefton
Blackburn with Darwen
South Lakeland
Wirral
Enterprise
Bolton
Carlisle
West Lancashire
Chester
Tameside
Fylde
Lancaster
Salford
Blackpool
St. Helens
Burnley
Rochdale
Wyre
Vale Royal
Ribble Valley
South Ribble
Halton
Allerdale
Hyndburn
Rossendale
Eden
Pendle
Copeland
Barrow-in-Furness
Knowsley
0
Ellesmere Port and Neston
2,000
Units
As might be expected, the region’s biggest sports employers are often to be found in the larger cities and, in several instances, are the main professional sports clubs and leisure trusts. The 30 businesses shown in Figure 5 overleaf each employ between 200 and 1,000 people. The Northwest is home to head offices for a number of sport sector companies, such as Adidas, New Balance, JJB Sports, JD Sports, Total Fitness, British Cycling, British Mountaineering, England Squash, The Football League and the Professional Footballers Association. It is, of course, particularly desirable for a region to contain head offices as they tend to influence wide-ranging economic factors and reflect a more resilient economic base locally.
Final Report – March 2010
Knight, Kavanagh and Page
14
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 5: Northwest sport businesses with between 200 and 1,000 employees
Bassenthwaite Sailing Club
Blackburn Rovers FC Rossendale Leisure Trust JD Sports Manchester United Ltd
Hassra Sports Pavilion Preston College Sports Centre
SMG (UK) Ltd Manchester City Football Club PLC Belle Vue Greyhound Stadium Tameside Sports Trust Davies Sports Trafford Community Leisure Trust Stockport Sports Trust Adidas (UK) Ltd Umbro International Ltd Total Fitness
Bolton Wanderers Football & Athletic Company Ltd JJB Sports PLC Whelco Holdings Ltd Everton Football Club Liverpool Football Club American Golf Discount Centre Ltd Thompson Properties Ltd DC Leisure
Pulse Fitness Crewe Alexandra FC
Carden Park Golf Club
Final Report – March 2010
Knight, Kavanagh and Page
15
NORTHWEST REGION: SPORT SECTOR STRATEGY
3.3
Key sub-sectors/niches
The sport sector comprises a broad range of diverse businesses which do not fit neatly into a cohesive sector/cluster. This presents complex challenges in supporting its future growth effectively. There are, however, a number of clearly identifiable sub-sectors that exhibit growth potential linked to the overall development of the region’s economy and which it is proposed will be the focus of support through this strategy. These are: i
Major sport venues and professional sport clubs Outdoor Adventure Advanced flexible materials (AFM) Specialist businesses that supply the sport sector. Major sports venues and professional clubs
Major sport venues and professional sport clubs are fundamentally important to the sporting landscape, economy and image of the region. They are significant to place-making in the locations in which they are based by contributing to the image and profile of the area and in attracting visitors. The Northwest has a significant number of large-scale internationally renowned sport venues that are both sizeable businesses and significant employers. They are also capable of hosting major sport events which bring visitors to, and more importantly generate considerable economic value for, the region. Sport activities alone attract more than 150,000 people to Northwest venues every week, all of whom also spend on, for example, food, drink, transport and accommodation in addition to the sporting commodity they purchase. The value of such economic activity is clearly highlighted by studies such as that commissioned to assess the economic impact of the Grand National and there is no doubting the value of professional sport clubs and events in economic and social terms. Major sport venues and professional sport clubs play an important role in the local communities in which they are located, contributing to wider socio-economic agendas. In 2006, the Northwest Regional Development Agency (NWDA) commissioned David Taylor Partnership (DTP) to map the activity of the 38 professional sport clubs in the Northwest and identify both the challenges and the future opportunities facing them. This study recognised the wealth of good practice across the region, linked to their contribution to wider socioeconomic agendas. Sportcity, located in East Manchester, was developed for the 2002 Commonwealth Games and presently comprises the largest concentration of sporting venues in Europe. The site includes the 48,000-seat City of Manchester Stadium (home to Manchester City FC), National Squash Centre, the 6,500-seat Manchester Regional Arena, the English Institute of Sport, Manchester Velodrome and the Tennis Centre. Sportscity’s world-class sports and events venues now provide facilities for elite and professional athletes as well as catering for a strong community programme. It hosts over 400 events and receives over 4,500,000 visits each year. The future development of the Sportcity site is being planned, with recent confirmation of funding for a £19m indoor BMX Centre. Major sport venues and professional sport clubs are spread throughout the region (see Figures 5 and 6). The distribution, particularly for professional sport clubs, tends to reflect population density and is particularly heavy around the major conurbations of Greater Manchester and Merseyside.
Final Report – March 2010
Knight, Kavanagh and Page
16
NORTHWEST REGION: SPORT SECTOR STRATEGY
The following key statistics reinforce the scale of the contribution made by professional sport:
Active Engagement: The Role of Professional Sport Clubs in Community Regeneration (2006) – collectively, the 38 professional sport clubs in the Northwest generate a turnover of £511 million, operating profit of £63.3 million and employ 2885 people (figures provided by Deloitte). Rugby League (2006) – contributed £54 million to the regional economy, supported 840 jobs in the Northwest and generated an additional £1.4 million via the 2006 ‘engage’ (Mutual Assurance) Super League Grand Final at Old Trafford. Premiership football (2006) – resulted in a turnover for Northwest Premiership clubs of £542 million, generated pre-tax profits of £27 million, led to attendance (Premiership games only) of 4.9 million and saw expenditure on stadia and facilities of £42 million.
The Northwest cannot be matched by any other region, particularly in relation to professional football clubs. In the 2009-10 the Northwest will account for 40% of all Premier League clubs, following the promotion of Burnley FC. Home attendance for league (Premiership, Coca Cola League and Championship) matches accounts for almost one-quarter of the national total and is 15% above that of its nearest regional rival. In 2007/08, the total home attendance for Northwest Premiership football clubs was 5 million, which is significantly higher than the attendance figures for the 2006 World Cup (3.3m) and the 2004 Olympics (3.8m). Table 2: Football – Home league attendance figures 2007/08 Clubs Number
12
Performance
Attendance (league games)
%
Number
%
Number
%
Northwest
20
21.7%
975
22.8%
6,695,804
22.4%
London
14
15.2%
774
18.1%
5,836,068
19.5%
West Midlands
12
13.0%
626
14.6%
4,367,560
14.6%
Yorkshire and Humber
11
12.0%
466
10.9%
3,425,857
11.5%
North East
7
7.6%
329
7.7%
2,717,947
9.1%
East
7
7.6%
288
6.7%
1,852,334
6.2%
East Midlands
8
8.7%
202
4.7%
1,639,157
5.5%
South West
6
6.5%
311
7.3%
1,436,122
4.8%
South East
4
4.3%
197
4.6%
1,212,254
4.1%
Wales
3
3.3%
110
2.6%
728,915
2.4%
All
92
100.0%
4278
100.0%
29,912,018
100.0%
The estimated value of investment in proposed stadium developments could easily exceed £1 billion over the coming decade and have an impact across a wide range of sectors and local communities. Figures quoted with reference to the cost of these proposals, in national and regional media during 2008 included Liverpool FC £400-700 million, Everton FC £130 million and Salford Reds £130 million, while other proposed stadia include Lancashire CCC and St Helens RLFC. The wider impact of stadium development is such that the expansion of Lancashire County Cricket Ground to a capacity of 25,000 will, for example, create additional employment opportunities and the first two phases of the scheme could generate around £8.5 million p.a. of additional GVA within the regional economy, as well as providing a range of other benefits to the community, including the development of an Academy sponsored by LCCC. 12
Performance score based on final league position for 2007/08 season; 92 points for winning the Premiership down to one for the club at the foot of League 2.
Final Report – March 2010
Knight, Kavanagh and Page
17
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 6: Major sport venues and professional sport clubs
Final Report – March 2010
Knight, Kavanagh and Page
18
NORTHWEST REGION: SPORT SECTOR STRATEGY
The operation of major sport venues and professional sport clubs requires the procurement of a wide range of goods and services, as part of a supply chain that involves suppliers from other business sectors. This includes, for example, catering, security, media, print, legal, financial services, clothing, food and transport suppliers. The supply chain of Warrington Wolves Rugby League Club was assessed as part of Deloitte’s 2007 Economic Impact Assessment of Rugby League in England’s Northwest. This study revealed that just under £2.75 million was spent on non-salary goods in 11 areas, as defined in Figure 7. Expenditure was incurred with 62 key suppliers; 40 (65%) based in the region and 23 (39%) in Warrington itself. Around £2 million (72%) of Club expenditure involved Northwest suppliers and a further £0.47m (27%) other UK suppliers, making an overall UK total of 99%. These figures are consistent with the Club’s policy of using local suppliers. The study concluded that opportunities existed to initiate joint purchasing arrangements between clubs in areas such as player supplements, medical supplies, security resources, equipment, vehicle leasing and ticketing to achieve both efficiency savings and to increase the profile of Northwest suppliers. Figure 7: Warrington Wolves – supply chain
Stadium
Cleaning
Utilities
Warrington Wolves
Catering Merchandise & kit
Print & stationery
Professional services
Security
Travel
Medical
£300K +
Miscellaneous
£200K -299K £50K - 199K
ii
Outdoor Adventure sports
Outdoor adventure is central to the quality of life and attractiveness of the Northwest as a place to live, work and visit. Research consistently confirms the Northwest as one of the most celebrated natural environments in England, from its dramatic coastlines through to breathtaking hills and mountains. The region has features and destinations that are worldclass, and its natural environment supports a wide range of businesses that offer goods and services linked to the ‘outdoors’. The outdoor adventure sector sits at the core of this offer and utilises land, water and the air to enable participants to practise their chosen pursuit. Outdoor adventure directly and indirectly supports a diverse range of businesses providing a rich and growing source of employment and wealth creation, especially in relation to the visitor economy and rural communities. Businesses and jobs supported have developed and evolved over generations and continue to be a rich source of tourism, visitor spend and economic growth. Final Report – March 2010
Knight, Kavanagh and Page
19
NORTHWEST REGION: SPORT SECTOR STRATEGY
The NWDA strategy for the Outdoor Adventure involved a:
Comprehensive sector mapping study (completed July 2007). Comprehensive consultation programme with over 100 businesses and organisations involved in the Northwest outdoor adventure sector. Series of highly focused sector events to debate priorities, issues and sector growth opportunities.
There is no universally accepted definition of the outdoor adventure sector. SkillsActive has developed a definition that has been agreed by an outdoor employer forum which includes outdoor education, outdoor recreation, development training, exploration & expeditions and outdoor sport development. This definition was used for the analysis of the sub-sector undertaken as part of the mapping study. Whilst lacking recognition of retail, manufacturing and tourism businesses linked to outdoor adventure and holidays, the definition provides a useful mechanism for sector analysis. Participation in most outdoor adventure sports is growing. Participation drives wealth creation and is also a driver in the development of the region’s visitor economy (day visits and staying visits). Some outdoor sports have become tourism sub-sectors in their own right (e.g. cycling, equestrian). Analysis of the outdoor adventure sector has identified various key characteristics:
It is a small sub-sector (comprising 484 businesses) both in terms of the overall number of businesses that occupy it and their scale. 91% of companies employ less than 15 staff and can thus be referred to as ‘micro businesses’. Nationally, 84% of outdoor adventure businesses are micro-businesses, suggesting a higher than average predominance of such companies in the Northwest. However even here, the tendency is towards particularly small businesses: the majority employ less than five people.
The sub-sector has a high level of self-employment (16%) due to the predominance of sole traders, partnerships and freelance practitioners. This is higher than the UK figure of 13%. The sector also has a significantly higher proportion of part-time workers: 41% compared to 22% across the UK. The importance of seasonality in this sub-sector must also be recognised; as must the impact this has on additional jobs.
Of the 414 businesses that provided this detail, 93% have a turnover of less than £250,000. All companies which exceed this turnover figure are holiday organisations. It employs a higher proportion of young people (aged 16-24 years) than the workforce across England as a whole. These are concentrated in the 18-plus age group (the legal minimum age for working with corporate clients). Ofsted regulations for working with children, and mini-bus driving licence requirements, discourage the employment of people under 18 years.
The most dominant segment is ‘other sporting activities’, which encompasses nearly 45% of all companies analysed. This includes sporting activities, events (e.g. cycle tour operators), clubs, marinas, riding academies, stables, hunting and the rental of sporting equipment. This is followed by ‘other recreational activities not classified elsewhere’ (24%) which includes recreational venues (e.g. parks and fishing facilities) and recreational transport facilities (e.g. boat hire). The remaining companies, 12%, are in adult and other education.
Final Report – March 2010
Knight, Kavanagh and Page
20
NORTHWEST REGION: SPORT SECTOR STRATEGY
Table 3: Outdoor Adventure businesses Sector Breakdown Manufacture of other agricultural and forestry machinery
Number Businesses 0
of
% of Businesses -
Youth Hostels and mountain refuges
15
3%
Other provision of lodgings not elsewhere classified
66
14%
Renting of water transport equipment
0
-
Adult and other education not elsewhere classified
56
12%
Other sporting activities
214
44%
Other recreational activities not elsewhere classified
117
24%
Outdoor Sector
484
100%
Source: Location Prospect, 2007, analysed by Tribal Consulting
Geographically, 32% of all outdoor adventure businesses are located in Lancashire, 27% in Cumbria, 21% in Cheshire, 13% in Merseyside and 7% in Greater Manchester. The figures below illustrate the geographical distribution of outdoor adventure businesses in Lancashire and Cumbria. Additional sub-regional variations exists for number of employees and turnover, as highlighted below:
In Cheshire, 4% of all businesses in the outdoor adventure sector have less than 15 employees; this figure is 4% in Cumbria, 1% in Greater Manchester, 6% in Lancashire and 3% in Merseyside. In Cheshire, 10% fall within this bracket, with 14% in Cumbria, 4% in Greater Manchester, 17% in Lancashire and 5% in Merseyside.
Figures 8 & 9: Northwest Outdoor Adventure Sector – Lancashire and Cumbria
From a forecast standpoint, output growth is predicted to outstrip that for employment. The highest rate of growth is predicted for Greater Manchester. Hence, whilst productivity in the sector may rise in the future, employment may not grow accordingly. This trend reflects the fact that the industry will continue to be dominated by small businesses with low numbers of employees. Outdoor sport clubs are an intrinsic part of the outdoor adventure sector and play a critical role that is directly relevant to the sector’s economic impact by creating demand, creating social capital and broadening participation in outdoor sports. In the Northwest, there are over 400 sporting clubs in a range of outdoor activities e.g. canoeing, mountain biking and mountaineering, as illustrated in Figure 10. The figure shows that most of the clubs are in urban locations – illustrating the urban centricity of demand.
Final Report – March 2010
Knight, Kavanagh and Page
21
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 10: Northwest Outdoor Adventure Clubs
Final Report – March 2010
Knight, Kavanagh and Page
22
NORTHWEST REGION: SPORT SECTOR STRATEGY
iii
Advanced flexible materials (AFM) for sport
The global market for sports clothing, footwear and equipment is very substantial. Industry estimates put the market at around £56.5 billion (wholesale).13 Nike has around 15% of the global market and Adidas 13%. Both key players and many of the next ‘tiers’ of brands are forming global alliances to manufacture and distribute their products. Major brands are also tying in key customers through sponsorship. The region’s 400 AFM companies employ 18,350 people and have a turnover of £2.1 billion. One-third of the industry is involved in the supply of sportswear products while 10 major retail groups and a substantial number of independent sportswear retailers are associated with AFMs. NW sports, clothing, footwear and equipment businesses comprise five main sub-groups:
Yarns and fabrics: there is a strong sub-sector of companies in coated fabrics, some activity in fabrics for first-layer garments, companies producing textiles for athletic footwear, composites for sports applications and two small producers of artificial turf. Niche sporting goods suppliers: there are a few small companies supplying high-end niches using AFM – which may have growth potential in export markets. Northwest-based brands: a number of globally recognised brands have product development, design and brand marketing activity in the region. International brands: these are not considered to be potential development partners for the AFM sector because they do not design and develop products in the region. Sports retailers.
HEIs in the region involved with the sector include Manchester Metropolitan University (MMU) and Bolton University. However, despite the MMU clothing department having an ongoing developmental relationship with Puma, Germany on soccer shirts, it is not thought to be working with any AFM or clothing companies in the Northwest. Bolton is well-known for its work in textiles (in particular its AFM expertise). There is thought to be significant potential for garments for personal protection which may be of interest to the sport as well as the protective clothing sectors. The combination of growth in the global market and increased competition in the AFM subsector is likely to create a climate of greater risks and rewards. This may, in turn, impact on smaller companies and export opportunities, primarily those in emerging markets. Such pressures may be harder for small companies to address individually. There is also a low rate of innovation and adoption of new technologies in AFM in the Northwest and few identified examples of joint development in the region. Against this backdrop, it is the role of NWTexNet (www.nwtexnet.co.uk) to draw companies, universities and other relevant agencies together for the AFM sub-sector. NWTexNet shares information, has a quarterly industry panel and is developing an overarching business strategy for AFM within the region. Its main priorities, directly relevant to the sport sector include:
13
increasing the (AFM) skills base within the region – key actions include the Advanced Skills for Advanced Materials programme (ASAM); supporting new product development; in part through its association with the HEI sector through, for example, Manchester University’s School of Materials; and balanced sourcing – retention of high-value elements, such as IT and technology, within the region but outsourcing (offshore) components with low margins. NWTexnet commissioned report by David Rigby Associates.
Final Report – March 2010
Knight, Kavanagh and Page
23
NORTHWEST REGION: SPORT SECTOR STRATEGY
AFM is pushing forward in three specific areas of technical development: Electro-spinning, Plasma and 3D-structures. The area most directly relevant to the sport sector in the North west is Plasma. Plasma advances will impact on development applications related to finishes and coatings for textiles, thereby introducing new and increasingly efficient processes that can lead to a step change in Northwest innovation. This has the potential, for example, to radically advance performance sportswear through improved water-resistant materials. Similarly, an advance in the 3D nature of fabrics lies at the heart of the recent dominance of performance swimming by swimmers using Speedo’s Fastskin and LZR swimsuits. These suits are designed to break down turbulence and flow around the swimmer. While unrelated to the Northwest, this nonetheless represents an example of technology, materials and athlete coming together to set more than 40 world records over the past 12-18 months. Consequently, it is possible to envisage similar advances through the application of Plasma and 3D structures if applied in Northwest businesses over coming years. iv
Specialist businesses supplying the sport sector
Sport provides a consumer and events-based marketplace for a wide range of companies from building, construction, venue consultancy, architecture and design to security, ticketing, hospitality, financial, professional services, clothing and equipment. They also include marketing, promotion, merchandising, ICT, website design and events management. While many specialist suppliers are associated with major events and professional sport clubs, as shown below, others produce equipment and clothing for areas such as outdoor sports, climbing and camping equipment and general sport development activities. Northwest residents and those travelling to the region, particularly for tourism in areas such as Cumbria and England’s Golf Coast, provide ready and substantial markets. Major sport events generate overnight stays, leading to significant secondary spend with accommodation providers, restaurants, retail outlets and transport providers. They also offer a suitable business environment for companies to network and promote goods and services to new national and international markets. Events can be frequent, regular or occasional as illustrated below:
Occasional, e.g. The Commonwealth Games (2002) provided 20,000 job opportunities (6,300 FTE); generated £2.7 million in additional value for every £1 million of public investment; attracted £2 billion spend from tourism; and catalysed £570 million investment in East Manchester. Regular, e.g. The Grand National (2007) had an overall economic impact on the region of £10.4 million; attracted around 125,000 day and 50,000 staying visitors and more than 600 million television viewers, from 140 countries around the world; plus increased tourism in Manchester, Blackpool and Chester as well as Merseyside. Frequent, e.g. Rugby League (2006) contributed £54 million to the regional economy; supported 840 jobs in the Northwest and generated a further £1.4 million via the Super League Grand Final at Old Trafford. Frequent, e.g. Premiership football (2006) resulted in turnover for Northwest Premiership clubs in 2006 of £542 million; this produced pre-tax profits of £27 million and expenditure on related stadia and facilities was £42 million.
Northwest companies have a proven track record of supplying products and services to major events including the Commonwealth Games (2002), FIFA World Cup (2006/2010), ICC Cricket World Cup (West Indies 2007), FINA Swimming World Championships (2008), Athens (2004), the Olympic and Paralympic Games: Beijing (2008), London (2012) and the Ryder Cup.
Final Report – March 2010
Knight, Kavanagh and Page
24
NORTHWEST REGION: SPORT SECTOR STRATEGY
It is predicted that London 2012 will generate 75,000 opportunities with a value of £6 billion. The majority of opportunities for small and medium-sized enterprises (SMEs) will come further down the supply chains of the Tier 1 contractors. The economic impact of the Games is vast and combines both direct and indirect opportunity. The 2000 Sydney Olympic and Paralympic Games led to businesses in New South Wales winning the equivalent of £400 million worth of Olympic contracts. In addition 55,000 people received employment-related training and by 2001 Sydney had made over £2 billion from Games-related tourism. Whilst national and international events create business opportunities, this is becoming an increasingly competitive market. As an example, many contracts for the Beijing Olympics incorporated clauses associated with knowledge transfer, to ensure local capabilities are developed. However, as reported earlier, the global major sport events market is expected to grow significantly. Future events for which NW businesses need to be geared up include the 2010 Commonwealth Games – Delhi, 2010 FIFA World Cup – South Africa, 2010 Olympic Winter Games – Vancouver and 2014 Olympic Winter Games – Sochi. London 2012 is also expected to be a significant driver in attracting an increasing number of major sport events to the UK in the lead up to, and following, the Games. The 2014 Commonwealth Games has already been secured for Glasgow.
3.4
Historic trends
This section outlines the historic trends experienced by the sport sector over the last ten years. Nationally The SIRC study conducted by Sport England highlights the significant growth of the sport sector over the last decade. This study predicted a 124% increase in sport-related GVA14 from £3.36 billion in 1985 to £15.47 billion in 2005 (this compares to overall growth in the economy of 67%). The results of this study are illustrated in Table 4. Table 4: Predicted growth in ‘real’ consumer spending on sport (SIRC/Sport England 2007) Consumer spending on sport
2006 2007 2008 Volume of spending % change
Sports clothing and footwear Sport equipment Boats Sport-related publications Sport goods
5.7 7.5 2.2 -3.3 4.9
5.8 7.8 2.7 -1.6 5.3
5.9 7.9 2.8 -1.5 5.4
Health and fitness Participant sports Spectator sport Sport gambling Sport TV and video Sport-related travel Other sport expenditure Sport Services All sport
3.4 1.8 -1.2 -20.6 0.5 -0.7 -0.8 -4.9 -1.2
4.7 1.5 0.4 -1.3 1.8 1.7 1.7 1.4 3.0
4.8 1.5 0.7 -1.6 2.1 1.8 1.7 1.5 3.1
14
Gross Value Added is defined as the sum of wages and profits generated in a sector.
Final Report – March 2010
Knight, Kavanagh and Page
25
NORTHWEST REGION: SPORT SECTOR STRATEGY
These results are underpinned by the assumption that the sports goods sector is a key driver for the sport sector, which is intrinsically linked to stimulation of the market as a result of more people participating in sport. This study confirmed that the bulk of income within sport is generated by the:
Commercial non-sport sector (£1.49 billion): including suppliers for the production of sport-related goods and services. Commercial sport sector (£1.27 billion): including spectator sports clubs, sports goods manufacturers and retailers. Consumer sector (£1.07 billion): including the personal or household sector.
Regionally between 1998 and 2006, the Northwest sport sector experienced the following growth:
9.9% increase in the number of sports companies – compared to an average fall across other Northwest sectors of – 8.6% and a national increase of 10.3% for the sports sector. 63.6% increase in the number of sports employees – compared to an average rise across other Northwest sectors of +0.5% and a national increase of 39.7% for the sports sector. 64.7% increase in turnover15 – compared to a national increase of 41.0%.
It is likely that the above trend, at both the regional and sub-regional level, has been influenced by the location of a large number of head offices for sport businesses in the Northwest, as illustrated in Figure 4. Figure 11: Northwest sports sector: sub-regional change 1998-2006 180% 155%
160% 140% 120% 100% 100%
91% 79%
76%
80%
65%
64%
59%
60%
47%
40% 20%
16%
20%
17%
10%
10% 4%
10%
0%
0% B u s in e s s e s
Jo b s
N o r th W e s t
15
Tu rn o v e r (£ b n ) -10%
-20% C h e s h ir e
C u m b r ia
G r e a te r M a n c h e s te r
G r e a te r M e r s e y s id e
L a n c a s h ir e
Adjusted to a 1998 base to account for the effects of inflation.
Final Report – March 2010
Knight, Kavanagh and Page
26
NORTHWEST REGION: SPORT SECTOR STRATEGY
Sub-regionally – as might be anticipated there were marked variations across the Northwest over the same period ranging from a fall of 10% in sports-related employment in Merseyside to an increase of 100% in Cheshire.
3.5
Cheshire – the number of sports businesses increased by16%, sports employment doubled and the value of sports-related turnover rose by 155%. Cumbria – the number of sports businesses increased by 20%, employment rose by 10% and the value of sports-related turnover went up by 79%. Greater Manchester – the number of sports businesses increased by 4% and the number of people employed by 76%. The value of sports-related turnover rose by 47%. Greater Merseyside (including Halton) – the number of sports businesses remained relatively stable, sports employment fell by 10% and the value of sports-related turnover went up by 10%. Lancashire – the number of sorts businesses increased by 17%, sports employment rose by 91% and the value of sports-related turnover went up by 59%.
Sport Sector PESTEL analysis
The key political, economic, social, technological, environmental and legal factors expected to impact on the development of the sport sector are shown in Figure 12, while selected examples taken from each of the sections are outlined in greater detail below. Political Physical and social regeneration Sport is considered to be a major and proven contributor to physical and social regeneration as illustrated by the Local Enterprise Growth Initiative (LEGI). This has involved Blackburn, Burnley and Accrington Stanley football clubs contributing to activities to tackle economic issues and raise the culture of enterprise within their local communities using the power of their brand. For example, the LEGI initiative’s economic targets (shown below) have clear social outcomes via the creation of new employment opportunities:
1,273 business start-ups (including self-employed). Five enterprise havens to assist new businesses to start and grow. 50 new construction businesses. 100 established firms being supported in their attempts to win construction contracts.
Voluntary sector Sport is a key area in which volunteers and the third sector will become central to the delivery of new and improved services. The Quirk report, Making Assets Work (2007), will lead to more public sector buildings and facilities (including sports facilities) being placed in the hands of the ‘third’ sector; thereby increasing the significance of trusts and social enterprises. The Department for Communities and Local Government recently provided £400,000 to monitor 20 pilot schemes while a £30 million Community Assets Fund has been established to support new community owners. Many such enterprises will need business support and will be leading the drive to secure funding for investment and new social, regeneration and learning/skills based programmes in key communities.
Final Report – March 2010
Knight, Kavanagh and Page
27
NORTHWEST REGION: SPORT SECTOR STRATEGY
Major events London 2012 is acting as a catalyst for attracting an increase number of major sport events to the UK in the lead-up to and after London 2012, including the 2014 Commonwealth Games. UK Sport is responsible for attracting major sport events to the UK. UK Sport is expected to invest £20 million in UK-hosted events between 2006 and 2012, and have identified 28 World Championships and 27 European Championships that they will consider bidding for and staging over the next few years. During 2008, UK Sport supported 17 events, including six World Championships. London 2012 and other major events will generate significant business opportunities for companies that supply goods and services to such events. A number of national and regional initiatives are being delivered to help support businesses to access the business opportunities being created from London 2012. Economic Levels of personal disposable income Until 2008, economic trends had pointed towards increased levels of personal disposable income and had been expected to provide the platform for new business opportunities, particularly around opportunities linked to health, sport and self-image. It was anticipated that the combined high profile of elite athletes and sportsmen; new sports and sport formats; sport-based fashion; interactive media and new/improved facilities, stadia and attractions would provide the key to such business opportunities. However, it was recognised that:
Expectations would be high and tolerance margins tight; products or services not living up to the standards set would not survive. The natural expansion of a business sector due to higher activity levels would lead to greater competition and mergers. Consequently, despite numeric growth this could also hide reduced profitability. For example, a rise in the number of health and fitness clubs between 2002 and 2007 accompanied by a 46% increase in membership numbers also saw a reduction in fees per capita of more than 25%.
The above picture will need monitoring in view of the current economic conditions.16 While sport (in its widest sense), attracts spend it is clearly not an essential commodity in the manner of food, drink, shelter and clothing. Consequently it is vulnerable to economic downturn and/or a reduction in confidence. Ironically, it is also possible that the current downturn will play a role in ensuring that infrastructure improvements do take place as the Government maintains investment programmes to help support recovery. New markets Sport is a dynamic and, in many areas, fast-moving sector. If the trends of the past few years are maintained, new markets will continue to emerge. A recent example is the mix of health, fitness, obesity, low youth participation and tackling sedentary behaviour that has led to the targeting of children and teenagers. The number of young gym users trebled between 2004 and 2006. Two main companies in this sector, Shokk (which now has sites in 15 countries) and ZigZagUK, are located in the Northwest. Innovative measures to bring the outdoors indoors via snow and surf centres will create other commercial opportunities extending, for example, to skateboarding, climbing, simulated parascending and ten pin bowling, many linked to cinemas; restaurants, clubs, bars and retail outlets. 16
PricewaterhouseCoopers LLP (PwC), has, for example, predicted that the economic effects of the 2009 Super Bowl (2009) will be adversely impacted, relative to previous years, as a result of a scaling back of household and corporate spending – there will be fewer visitors and media, a shorter average length-of-stay per visitor, and less spending in hospitality and related industries throughout the Tampa Bay area.
Final Report – March 2010
Knight, Kavanagh and Page
28
NORTHWEST REGION: SPORT SECTOR STRATEGY
Social Demographic change It is vital that the sport sector responds to demographic change that affects its market. This is complex and multi-layered; for example, projected falls in the number of 15-24-year-olds may lead to reduced spend on sport and sports fashion wear but could be offset, to an extent, by greater health awareness amongst the elderly. There is also an increasing tendency for ‘middle age groups’ to extend the participation phase of their lives and an increase in the proportion of A, B and C1 groups which are statistically more likely to participate and encourage participation by their children. Trend for sport being integrated into activity holidays Participation in sport is increasingly being built into activity holidays as more people begin to adopt healthier and more active lifestyles. As the market for domestic activity holidays, continues to grow, so does the market for activity holidays which specialise in sport. Activity holidays have traditionally been undertaken by males from the AB social class, but it is suggested that in the future the appeal will be broadened across the market. Future opportunities exist to revitalise the tired package market, particularly via sports-orientated allinclusive products. Health and obesity Health and obesity will continue to be major factors in the landscape of participation, with both positive and negative impacts. Health improvement policies and programmes including ‘Be Active Be Healthy’ and the Change4Life campaign aimed primarily at increasing levels of activity among young people will both underpin greater health sector investment in sport and physical activity. It is also a primary vehicle for tackling inactivity which is estimated to be responsible for 34% of deaths due to cardiovascular disease, 16% from colon cancer, 15% from diabetes and 11% from breast cancer. A positive focus on food/diet products and proactive health interventions such as GP referral, ‘exercise recommendation’, organised walking and cycling programmes will be countered to a degree, in commercial terms, by changes in sponsorship. Products associated (however loosely) with obesity, binge drinking and anti-social behaviour will become progressively less marketable thus impacting on the present commercial base of certain sports causing them to seek new avenues for such support. Time pressures Continued pressures on available time will drive formats and equipment that enable people to take exercise and achieve greater gain via shorter games or sessions. There will be a growing market for extreme sports and a somewhat sanitised version in the form of ‘safe danger’. Sponsorship and endorsement will continue at high levels for the most successful sportsmen/women and clubs as there is a wish to be associated with success; however, less successful clubs will have to review their financial strategies and wage structures. Product development strategies will need to range from constant redesign driven by fashion to high quality, durability and cost for elite products. Technological Sport is strongly influenced by and is itself a key driver of technological change. New technology is frequently first developed to help elite sportsmen/women to improve their performance, prior to filtering down to products on the high street. Technological advances involving sport and video games have resulted in a convergence of game consoles and sport participation, with more recent advances focusing on the development of training devices. Final Report – March 2010
Knight, Kavanagh and Page
29
NORTHWEST REGION: SPORT SECTOR STRATEGY
One example is the way it is planned, presented and marketed via the ever-increasing number of television channels, digital and time shift television; the internet will continue to change as will its influence as a point of sale. Advances in computer gaming and interactive technology will see console games move to physical interaction and less sedentary formats. Digital analysis of performance and simulators/suites will enable elite athletes to ‘feel’ the perfect strike, shot or stroke, thus not only analysing but also coaching performance.. The development of partnerships between UK Sport, Loughborough University’s Gatsby Innovators Award, BAE Systems and the introduction of the Garage Innovators Award will all generate new technologies that may initially be targeted at elite athletes. Over time, these new products will become affordable high street products. Environmental Ageing sports facility stock/investment in sports facilities There is growing commitment to find new ways to invest in sustainable sport facilities, using improved planning tools to evaluate quality, quantity and shortfalls. There is recognition, as described in the Audit Commission report Public Sports and Recreation Services: Making them fit for the future (2006) that key weaknesses exist in the public sector’s capacity to develop new facilities which contribute to the delivery of increased participation in sport and physical activity. Weaknesses identified include:
Ageing buildings that fail to meet changing needs and customer expectations. Poor strategic planning of local sport and recreation services with scant assessment of current private and public leisure provision, community needs and future demand. Weak performance management, few strategic partnerships and limited joint planning between councils (sport and recreation), health and education services, the private sector and external partners, including the voluntary sector. Council failure to realise significant cost savings and efficiency opportunities. Lack of internal capacity to assess options in a robust manner, leading to missing significant cost savings and efficiency opportunities.
Positive responses to these issues will create a mix of opportunities in the form of jobs in construction, new facilities and the spin-off activities and social benefits that the development, replacement and refurbishment of facilities can engender. Environmental awareness Sport, in common with all other sectors, is affected by the upward trend of environmental awareness. BREEAM17 design standards will be adopted for a generation of new stadia, which themselves will catalyse physical and social regeneration. Companies that provide rapid access to current legislation, clear advice on appropriate interpretation and that stay ahead of the game in relation to such legislation will have a distinct advantage. The introduction of BS 8901(2007), a new British Standard for Sustainable Event Management provides guidelines for planning and managing sustainable events of all sizes and types ranging from the Olympic Games to music shows.
17
Building Research Establishment Environmental Assessment Method.
Final Report – March 2010
Knight, Kavanagh and Page
30
NORTHWEST REGION: SPORT SECTOR STRATEGY
Legislative Government policy The sport sector will be boosted by national strategy aims and related initiatives to increase participation by 1% per annum. This, alongside those policies and programmes directed at greater social inclusion, youth disturbance and crime reduction will increase demand for facilities, programmes, and sports clothing and equipment, as well as leading to a healthier population both physically and socially. Figure 12: Key political, economic, social, technological, environmental and legislative drivers Political New policies to increase
participation in sport Sport’s growing contribution to
physical & social regeneration Increasing profile and
Legislative Government policies to
increase participation in sport, reduce smoking and improve diet and lifestyle Grants linked to outcomes & regeneration Quirk Report and similar enablers Legislative obligations (i.e. health & safety, child protection)
Environmental
contribution of the third sector/ voluntary sector Increasing impact of major sport events including London 2012 Local Development Frameworks
Economic Growth in job and wealth
creation from sector growth Projected increases in
Sport Sector
personal disposable income to 2012 Downturn in economy (2008) Evolution of new markets Increase in UK-based holidays including activity
Aging sport facilities and
Social
challenges to investment in new sport facilities Continued environmental awareness, including BREEAM design standards and BS8901 for Sustainable Event Management New stadia & initiatives catalyse regeneration
Demographic change Trend: sport to be integrated
into activity holidays Increase in government
Technological Technological changes including
digital and time shift television Continued growth of internet as
point of sale and social networking Interactive technology e.g. games consoles, GPS, interactive websites Convergence of technologies and platforms Development of new format for sports & consumer experience
Final Report – March 2010
Knight, Kavanagh and Page
policies to tackle growing obesity and health inequalities Growing awareness of business awareness from increased profile of health, wellbeing & self-image Pressure on available time
31
NORTHWEST REGION: SPORT SECTOR STRATEGY
Outdoor Adventure – PESTEL The Political, Economic, Social, Technological, Environment, and Legislation (PESTEL) drivers that will impact the outdoor sector in the Northwest are illustrated in Figure 13. Figure 13: Outdoor Adventure Sector PESTEL diagram
Political
Legislative
Changing legislative framework for outdoor businesses, including growing health and safety and licensing obligations Capacity of SMEs to respond to legislative frameworks Increased taxation and regulatory burden affecting small businesses
National Marine Bill and national coastal trail, increasing costal access Outdoor adventure: less environmental impact Coordination of :infrastructure improvement Changes: planning policy on environment sustainable practices Environment culture & community participation
Technological
Investment in online marketing, booking and product sales Advances in outdoor clothing & equipment e.g. GPS, satellite navigation, mobile phone functionality Increase in interactive websites & social networks e.g. MyPeakExperience Use of new media e.g. podcasts, webcams Development of new outdoor adventure sports & experiences
Knight, Kavanagh and Page
communities Low skill base to respond to sector growth Requirements for technical qualifications Economic downturn Changes: disposable income & increased consumer spending More UK-based holiday including outdoor activity
Social
Final Report – March 2010
Outdoor Adventure sub- sector
Environmental
NSA for the Outdoors in Cumbria Contribution to the sustainability & climate change agenda National Park Destination Management Plans Local Development Frameworks New policy to encourage greater participation (e.g. Education outside Economic the Classroom Manifesto) Growth in job & wealth Contribution to health creation, especially in rural improvement agenda
Growing agendas in health and wellbeing Greater participation in the outdoors, especially for those more deprived/diversity Increase in domestic activity holidays, including outdoor activities Population changes i.e. ageing population New ‘outdoor’ sport trends e.g. kite racing Demand for higher quality goods and services
32
NORTHWEST REGION: SPORT SECTOR STRATEGY
3.6
Overall Sport Sector SWOT analysis
The Northwest sport sector has significant strengths and opportunities that must be exploited while at the same time resolving its weaknesses. The SWOT hierarchy is such that threats that must be tackled often have their origins in weaknesses that have not been addressed early enough or even opportunities that have not been exploited. In the next section, an overall SWOT for the sport sector is presented, followed by separate analyses for the four main sub-sectors:
Major sport venues and professional sport clubs Outdoor Adventure Advanced Flexible Materials (AFM) for sport Specialist businesses that supply the sport sector.
OVERALL SPORT SECTOR SWOT Strengths
Weaknesses
Excellent sporting infrastructure (especially major sport venues and professional sport clubs). International experience in hosting and organising major sport events. World-class outdoor environment – iconic Lake District. Strong HE sector especially in sports science & AFM. Location of the World Academy of Sport in the region providing world-leading educational programmes for the sport and major event industries. Establishment of the National Skills Academy (NSA) in the region (outdoors and sport & fitness). Large pool of specialist businesses; proven track record supplying major sport events and infrastructure projects. AFM brand leaders located in the region.
Perception of the sector as one of low productivity. Limited B2B networking & collaboration. Low levels of knowledge transfer between Northwest businesses and HEIs. Limited exploitation of new technologies. Workforce development and skills. availability. Minimal take-up of business support programmes by sport businesses. Historic reliance on grant aid to support business development activities.
Opportunities
Threats
Significant growth potential of sector: underpinned by participation increases, changing demographics and new markets and products. Sport as a marketplace for other sectors. Continued growth of government initiatives promoting after school activities (i.e. BSF). Implementation of new UK Coaching Framework. Uniqueness of sports contribution to other economic development agendas. Increased expertise in sports media/broadcasting at Media City; relocation of BBC Sport & Radio Five Live. Growth and relevance of new technological advances in the sport sector. Significant growth in stadium developments and new major sports facilities planned across the region. Significant secondary spend generated as a result of activities in the sport sector (i.e. retail, hospitality) Increased profile & role for the third sector and social enterprise within the sport sector. Making better (full) use of region’s HEI-based AFM expertise for work in/with the sport sector.
Final Report – March 2010
Knight, Kavanagh and Page
Lack of a national policy direction for the economic and business development of the sports sector. Stabilisation & slowdown of the UK economy. Sector responsiveness to rising consumer expectations (quality driven). Lack of robust evidence base and intelligence on trends within the sector. London 2012 diverting attention (and national expenditure) away from the region. Changing priorities for public sector expenditure – greater focus on statutory responsibilities. Physical condition of existing sports facility stock and generally ageing infrastructure leading to local authorities and leisure trusts being unable to respond to changing social and sporting needs.
33
NORTHWEST REGION: SPORT SECTOR STRATEGY
SWOT analysis: Major sport venues and professional sport clubs MAJOR SPORT VENUES AND PROFESSIONAL SPORT CLUBS: SWOT Strengths
Weaknesses
Strong infrastructure of major sport venues and professional clubs. Strong football presence; Premier League and Championship clubs. Impressive reputation for hosting major sport events. Ability of professional sport clubs to deliver community programmes contribution to wider socio-economic agendas. Importance of history and heritage.
Under-developed cluster; limited coordination, B2B networking and collaborative work. Public perceptions of clubs in relation to community engagement. Under-representation in rugby union. High dependence upon (discretionary) leisure spend among smaller professional clubs. Limited understanding of, and success obtaining, public and private sector funding Lack of ‘middle-sized’ venues. Minimal B2B networking and collaboration. Sector diversity; small and difficulty coming up with common solutions.
Opportunities
Threats
Innovative funding models (LEGI and stadium developments in partnership with supermarket chains. Acceptance of the need, and willingness, to network and collaborate in the future. Willingness to work more closely with the public sector and to take a long-term view. Broad, cross-sector recognition of economic value of major events. RDA involvement in and facilitation of improved knowledge transfer and best practice. Potential growth of key sports (e.g. basketball). Growth potential in Far East –particularly football.
Negative perception of London 2012 and the detraction from the profile of the NW. Reliance on casual/low-skill labour. Decline in public sector spending and capacity to invest. Slowdown in the UK economy.
SWOT analysis: Outdoor Adventure sub-sector OUTDOOR ADVENTURE SUB-SECTOR SWOT Strengths
Weaknesses
Lake District National Park is iconic and of world-class status in certain areas and sports. Large resident regional population; good representation of relevant social class groups who drive demand. Good concentration of outdoor activities to suit consumer needs. Easily accessible and has good transport links. Diverse nature/landscape. Good range of accommodation for different consumers and different budgets. Largest concentration of professional outdoor, experienced staff. Greatest concentration of outdoor education and training providers in the UK. Large catchment population within 2 hours’ drive.
Final Report – March 2010
Limited capacity, range and quality infrastructure to meet different consumer requirements. Limited innovative approaches to attracting visitors to NW compared to Scotland/ Wales. Lack of integration between strategic planning (e.g. Local Development Framework) processes and industry growth opportunities. Transferable skills of people working in the whole leisure/tourism industry are limited. Lack of organisation and support for the outdoor sector across the region. No coordinated approach to marketing the NW for outdoor adventure. Difficulty engaging with providers/employers via traditional marketing and media forms. Number of lifestyle businesses in the sector. Lack of local opportunity in NW to gain technical qualifications, particularly Level 3 and above.
Knight, Kavanagh and Page
34
NORTHWEST REGION: SPORT SECTOR STRATEGY
Opportunities
Threats
National Skills Academy – Outdoors and Hospitality in the Northwest to improve workforce and skills development. Developing proposals for Ad Cap2 in Cumbria. Joined up marketing venture for the Northwest. New policy context such as ‘Education outside the Classroom’ Manifesto and Every Child Matters Agenda. Growing environmental, sustainability and climate change agendas. Growth of UK residents holidaying at home due to current economic slowdown. A change in the planning system, i.e. the development of the LDFs. Development of corporate sponsorship to grow activities. Growth of participation in outdoor adventure, including previously under-represented groups such as disabled and BME individuals. Improve the quality standards of goods and services. Development of urban outdoor experiences and connectivity between centres of urban population and outdoor destinations. Strength of outdoor adventure activities that can be catered for across the Northwest.
Perceived restrictive use of the National Park. Restrictions from land owners and planners. Lack of funding for infrastructure projects. Competition from other areas e.g. Wales and Scotland. Changes in the National Curriculum for outdoor education. Accidents and negative media coverage. Increased regulations, licensing of all providers, growing legal requirements, cost of public liability insurance and red tape. External threats e.g. foot and mouth. Limited use of new technologies to drive up quality and meet consumer expectations.
SWOT analysis: AFM sector AFM SUB-SECTOR SWOT Strengths
Weaknesses
Coated fabrics. Some Northwest- based global brands with design and development in the region. Some well established exporters. Clothing and sports technology at MMU. Sport science department: Liverpool John Moores. AFM development at Bolton University and University of Manchester. ‘Outdoors’ focus through brands, local natural environments, adventure tourism initiative, independent outdoor retailers. ‘Football’ focus via presence of major clubs and brands, Liverpool University Football Industry Group, UCLan International Football Institute.
Many SMEs unable or unwilling to ‘think big’. No supply chain cluster and no significant trading network. Few links between NW companies and academic institutions. Overall, no cluster mentality. Many smaller brands not recognised outside UK. Manufacturing sector slow to recognise need for sourcing strategies. Many ‘low-tech’ middle market producers. Relatively low rate of new business formation (mature market sector).
Opportunities
Threats
Overseas, emerging markets. Product innovation. Brand marketing. Joint product development. Smart textiles. Wearable electronics. Coating and printing technology developments.
Final Report – March 2010
Increasing price pressure in mature UK market from imported components and finished products. Sponsorship ties major customers into big brands’ supply chain.
Knight, Kavanagh and Page
35
NORTHWEST REGION: SPORT SECTOR STRATEGY
SWOT analysis: specialist businesses supplying the sports sector SPECIALIST BUSINESSES SUPPLYING THE SPORT SECTOR Strengths
Weaknesses
Large pool of specialist businesses with a proven track record of supplying major sport events and infrastructure projects. Particular regional strengths in: Sport law and negotiation of sport rights/commercial agreement Building large-scale sport infrastructure projects Provision of security services (operational and educational) Sport/leisure consultancy. International experience in hosting and organising major sport events. Location of World Academy of Sport in the NW providing world-leading educational programmes for the sport and major event industries.
Limited B2B networking & partnership approaches by companies. Lack of coordination of those companies with expertise in supplying major sport events. Information gap on regional suppliers. Lack of coherent marketing plan to promote the region’s strengths in this cluster. Lack of transparency of the contracts and the procurement process for major sport events. Perception of suppliers interested in London 2012 that location in the NW will be a disadvantage. Limited knowledge and skills of the buying culture of major sport events, technical delivery requirements, project management and financial capacity required. Diversity of requirements (both scope and scale) makes it difficult for the sector to be coherent or to be addressed as a coherent whole.
Opportunities
Threats
Significant growth in the global sport events market increasing business opportunities. Emerging strength in the digital and creative services businesses. Frequency of international delegations visiting Northwest, and in particular Manchester to learn lessons from 2002 Commonwealth Games. Sport as a growing marketplace for other sectors. Proactive local supply chain initiative to promote and develop regional suppliers. CompeteFor – improving the transparency and availability of London 2012 contracts. Generation of new business as profile of security is raised by major event organisers. Growing expertise in sport media/broadcasting, linked to development of MediaCity. Upskilling required to supply major sports events can strengthen companies in other areas of their business.
Final Report – March 2010
Significant competition and barriers to entry for suppliers to major sport events. Relationship based market for the supply of goods and services for large events, and the Olympic & Paralympic Games in particular, is characterised by constraints on competition and significant barriers to access. High specialist requirements and levels of risk aversion by event organisers resulting in contracts being awarded to contractors with significant experience of similar events. Distinctive requirements of the operating environment of major sport events. Growing interest and activities across the UK in the organisation of major sport events. High cost of developing relationships and bids for major events. Increasing emphasis on local suppliers disadvantages NW companies in the context of events outside the region.
Knight, Kavanagh and Page
36
NORTHWEST REGION: SPORT SECTOR STRATEGY
3.7
Future trends and projections
Future trends18 for the sport sector remain positive, even given the current economic climate due to key drivers such as London 2012 and government policy to increase participation. Sports participation is the most important long-term driver that will stimulate growth in the market, consequently if Government targets are realised the market will increase significantly. The next section provides detail on the following trends and projections, including:
18
Over-65s will rise continuously for the next 25 years to a point 55% above its current level (in numbers) by 2031.
120.0
106.5 104.9 104.3 100.0 98.6
0-14
15-24
25-44
45-64
2030
2028
2026
80.0 2024
45-64-year-olds will climb to a peak of 109% of current figure before falling back to 104% by 2031.
140.0
2022
25-44-year-olds will be stable up to 2018 before rising to c. 105% of the current figure in 2031.
155.2
2020
15-24-year-olds will remain stable up to 2011 and then decline by 12% to 2021 before rising to around 99% of its current figure in 2031.
160.0
2018
Slight decline in the number of 0-14-year-olds to 2011 and then a rise by around 6% throughout the period up to 2031.
2016
North West Projected population (2006 -2031)
2014
Sport companies must plan for predicted population change over the next 25 years. This will influence market size for their products and services. These include:
Figure 14: Projected population 2006-2031 Indexed rates relative to a base of 100 in 2006 (Source 0NS, 2006)
2012
Demographic Changes
2010
2008
Demographic change Projections for business growth Increased Activity Holidays with a sport focus Increased commercial activity New technologies and innovation London 2012 and the ‘Beijing effect’.
2006
65+
Sources: Mintel and ONS.
Final Report – March 2010
Knight, Kavanagh and Page
37
NORTHWEST REGION: SPORT SECTOR STRATEGY
Projections for business growth The sport sector has grown considerably over the last decade. Predicted longer-term trends in personal disposable income and a strong and increasing societal emphasis on healthier lifestyles will provide further stimulus for growth. A rolling three-year average based on data from 1998 to 2006 indicates: Figure 15: Sports employee numbers 1998-2020
Continued growth in the number of Northwest sports companies from 8,350 in 2006 to 9,526 by 2020, a level of 14.1% over this period and a 31.0% increase in employee numbers. At subregional level, it should be noted, however, that while growth in Cheshire has been most significant this is from a substantially lower numeric base than, for example, Greater Manchester.
Projected change in the number of sports employees (1998 - 2020) - Based on a rolling three year average 130000 120000 110000 100000 90000 80000 70000 60000 50000 1998
Continued growth in employee numbers from 97,565 in 2006 to 127,859 by 2020, a level of 31.0% over this period.
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Figure 16: Sports company numbers 1998-2020 Projected change in the number of sports companies (1998 - 2020) - Based on a rolling three year average
However, as the sector matures, companies may merge or undertake acquisitions which could result in an overall reduction in company numbers, whilst stabilising numbers of employees. It is likely that new companies will continue to be created due to the low barriers to entry.
10000 9500 9000 8500 8000 7500 7000 6500 6000 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Table 5 illustrates the projected employment growth for the outdoor sport sub-sector. Table 5: Projected growth of the outdoor sports sector Northwest Total employment Employees PT FT Self-employed Output (£)
1996
2006
2016
2,098 1,718 761 957 381 28,572
2,665 2,276 1,086 1,189 387 44,164
2,695 2,336 1,210 1,125 360 49,862
Average annual growth 19962006 (%) 2.4 2.9 3.6 2.2 0.2 4.5
Average annual growth 2006-2016 (%) 0.1 0.3 1.1 -0.6 -0.7 1.2
Source: Skills Active, Experian Business Strategies Limited © Copyright 2007
Final Report – March 2010
Knight, Kavanagh and Page
38
NORTHWEST REGION: SPORT SECTOR STRATEGY
Output growth is forecast to outstrip employment growth. So, whilst productivity in the outdoor adventure sector may rise in the future, employment may not, reflecting the predominance of small businesses in the sector. Greater Manchester is forecast to witness the strongest level of growth, which is attributable to growth in its economy as a whole. Figure 17 provides a detailed outline of output forecast across the five sub-regional areas. Figure 17: Output forecasts across the five sub-regional areas, 1995-2016
Increase in activity holidays with a sport focus During the last decade, there has been an increase in the domestic activity holiday market, which now accounts for about 10% of the overall domestic market value i.e. £1 billion. Penetration rates of the adult population who have taken an activity break rose sharply from 35% in 1999 to 43% in 2007 – an estimated 4.3 million adults, or 9% of the population. Mintel estimates that with an estimated 10.2 million activity breaks in 2007 the sector has experienced growth of 17% since 2003 and comfortably out-performed the overall travel market: it is forecast to continue above the average for the economy until at least 2014 and this rate of growth will outstrip that for employment (IPS National Statistic Mintel 2007). Increased commercial activity Forecasts produced in early 200819 suggested that the global sports market associated with gate revenues and events merchandising will be worth $141 billion by 2012. It was predicted that spending on large sporting events, such as the Olympic and Paralympic Games and the World Cup, would boost revenue in the world market by 37% over the five years from 2008 to 2012. Annual revenue growth was thought likely to track the years in which major events are to be hosted and it was anticipated that in 2008, 2010 and 2012 growth would be at 11% p.a., virtually stabilising in the ‘interval years’ without major events (which catalyse economic activity) at 0.4% or less in 2009 and 2011.
19
Source: PricewaterhouseCoopers – the sports market (see Appendix 2 for details, mid-2008 prices).
Final Report – March 2010
Knight, Kavanagh and Page
39
NORTHWEST REGION: SPORT SECTOR STRATEGY
Europe, Middle East and Africa, Latin America and the Asia Pacific region were all expected to see annual growth rates of between 6.5 and 7.1% (2008-2012). In the US and Canadian markets, rates were predicted at 6.1% and 5.7% respectively. By 2012 the US market is expected to reach $69.1 billion; compared with an aggregate figure of $46.9 billion in Europe, Middle East and Africa. Revenues in Asia Pacific, Latin America and Canada were expected to reach $19.4 billion, $3.9 billion and 1.3 billion respectively. It is projected that the sport market in England will be worth £24.2 billion by the end of 2011.20 It is also predicted that between 2006 and 2011, the sports market (overall) will grow by 18% in volume (exceeding expected growth of 14% in wider consumer demand). Predicted real term growth, over this period, is as follows:
Sports equipment Sports clothing and footwear Health and fitness Sport TV and DVDs
+ 47% + 34% + 29% + 16%
Leisure boats Participant sports Spectator sport
+ 17% + 9% + 7%
Sport-related publications and gambling are expected to decline over the same period of time. Technology and innovation The sport sector will continue to respond to social changes and rising consumer expectations. This will include the technological advances linked to new products and improvements to the consumer experience, covering areas such as:
New products to meet changing consumer needs e.g. GPS and advanced satellite navigation for outdoor adventure activities New sports e.g. kite surfing New format to sport competitions (e.g. Twenty20 cricket) New events to meet new markets (e.g. Great North Swim, Urbanathlon) Improvements to the spectator experience (e.g. Super League, World Netball Series) New attractions (e.g. indoor ski slopes, youth gyms) Technological advances to increase the level of participation experience through interactive games consoles (e.g. the WII console).
The next 20 years will see significant facility developments both to address the ageing stock of public sector owned sport facilities and to meet the predicted growth of the sector. The rising expectations of consumers will drive the demand for higher standards, greater choice and an improved experience that mixes sport participation with non-sport activities, retail, entertainment and hospitality. One challenge yet to be comprehensively addressed is the time pressure faced by consumers and the opportunity to stimulate sports participation in workplace-based markets. London 2012 – the Olympic effect The impact of major events in stimulating the sports market is illustrated by a recent article in The Independent which highlights the ‘Beijing effect’ from the 2008 Olympics. Retailers, for example, reported:
20
Increased sales of 135% for swimsuits and goggles, 130% for horse riding related products and 155% for sports nutrition products, including supplements and isotonic drinks (Tesco).
Source: Sport England report 2008 produced by the Sport Industry Research Centre.
Final Report – March 2010
Knight, Kavanagh and Page
40
NORTHWEST REGION: SPORT SECTOR STRATEGY
3.8
A gradual increase in sales of Boardman bikes over the past year (Halfords). It is to start selling a replica of the bike used by gold medal winner Nicole Cooke. A 75% increase in mobile access to the internet (Dixons). The store is also, reportedly, ‘excited about the prospects for 2012 because of the location, feel good factor and viewing times that it predicts will lead to an uplift in television sales’. Comet has made similar comments on anticipated HDTV sales. A healthy boost for DW Sports and Fitness and Sports Direct across many of their own and third party brands such as Nike, Adidas, Reebok and Umbro, Fila, Everlast, Lonsdale, Dunlop, Slazenger and Karrimor at the London games. One of the key factors influencing the scale of shirt sales in particular will be the possible break with tradition in putting out a Great Britain football team.
The impact of doing nothing
The Northwest sport sector has, as demonstrated, experienced healthy growth over the last decade which is predicted to continue. The region has a once in a lifetime opportunity to develop cohesiveness in the sector to ensure it maximises the growth opportunities that will be generated by London 2012 and government policies to increase participation. The impact will be felt by sport and other priority business sectors such as the Digital & creative industries, Food & drink, Manufacturing and Financial & professional services. The significance of sport as a marketplace for other sectors will mean that any growth in sport will lead to growth in other sectors. If left to its own devices, the sport sector would be expected to continue to grow in response to market forces. As indicted in the SWOT, the sector is highly fragmented which leads to some coordination and information failures that may limit future growth and economic impact to the region. This strategy proposes a series of interventions that addresses the main barriers to growth: fragmentation of the sector, limited B2B networking and limited use of new technologies and knowledge transfer. Public sector interventions should be targeted to help companies stay abreast of emerging trends in the market, introduce new technologies, access new business opportunities and develop their skills and capabilities to respond to the market opportunities. Greatest impact will be accrued where the region builds upon its distinctive characteristics to champion and pilot new approaches to sector development to ensure that it continues to excel in sport. This approach will apply across economic development agendas including business development (including skills, innovation), place-making, and visitor economy (including major events). Specific factors apply to the outdoor adventure sector. The Northwest outdoor adventure sector is competing not only with international outdoor destinations but with regions and nations closer to home, including Scotland and Wales. Many of these are actively promoting and investing in outdoor sports, particularly in those that appeal to a wide consumer market including families, couples, participants in extreme sports and outdoor enthusiasts, as well as the international market. There is a need to further develop the infrastructure necessary to support the growth of the outdoor adventure sector so that it achieves the full potential economic benefit. It is particularly important to ensure that the region does not miss out on opportunities presented by the predicted growth of the sub-sector, and to minimise the adverse impact on the NW of proactive strategies developed by Scotland and Wales.
Final Report – March 2010
Knight, Kavanagh and Page
41
NORTHWEST REGION: SPORT SECTOR STRATEGY
4.
STRATEGIC FRAMEWORK AND ACTION PLAN
The vision for the sports sector in the Northwest is of: A cluster of forward-looking businesses, focused on the delivery of leading edge products and services to businesses, individuals and communities. As well as supporting economic growth, the sector will promote social inclusion, community and physical regeneration, and improved health amongst the population whilst developing the Northwest as the premier UK region for sport. 4.1
Strategic aims
Realising this vision requires activity to focus upon achieving the following strategic aims:
4.2
Retaining and supporting the growth of new and existing sport businesses Increasing innovative activity to improve product development and service delivery Coordination of activity to ensure maximum leverage of investment into the region Maximising the economic, social and health benefits of sport to individuals and communities across the Northwest. Strategic themes and cross-cutting principles
Strategic theme 1: Networking and support a. To provide sport businesses with access to the right support to increase their competitiveness and productivity. b. To support sports businesses to export. Strategic theme 2: Innovation a. To improve the sport sector’s ability to adopt new products/processes and innovate to increase productivity. Strategic theme 3: Place-making, image and profile a. To promote the Northwest as a world-class location for sport businesses to attract further investment. b. To attract and develop sport events of national and international standing. c. To raise the profile of the region as a destination of choice for outdoor adventure sport businesses and sport tourism. Strategic theme 4: Skills a. To develop the skills base of the existing and future workforce to meet the needs of the sector Strategic theme 5: Infrastructure a. To develop the right infrastructure to support the growth of the sport sector in the Northwest. b. To encourage the development of the outdoor sport offer in the Northwest, including improvements to the infrastructure to meet the future needs of consumers. Strategic theme 6: Health, community and regeneration a. To maximise the contribution of sport on health, community and regeneration agendas. b. To increase levels of participation in sport in the Northwest, especially amongst underrepresented groups, linked to maximising business opportunities.
Final Report – March 2010
Knight, Kavanagh and Page
42
NORTHWEST REGION: SPORT SECTOR STRATEGY
Strategic theme 7: Strategic influencing a. To ensure maximum leverage of investment into the region to support development of the sport sector. Cross-cutting principles The three cross-cutting principles for the strategy are:
4.3
Sustainability – ensure that the development and growth of the sport sector in the Northwest is economically, socially and environmentally sustainable in the long term.
Connectivity – ensure that all parties including consumers and businesses in the sport sector make the best use of ICT and digital technologies to maximise growth in the sector.
Accessibility – ensure that the development and growth of the sport sector is inclusive to all businesses, individuals and communities. Key performance measures
The measures against which strategic actions will be assessed include:
4.4
GVA per head and total GVA for the sport sector The number of business start-ups and their survival rates Business density Number of businesses assisted through Business Link Increased skills levels Business Link Northwest customer satisfaction results Action plan (see Appendix 1)
The action plan (Appendix 1) outlines approximately 50 specific tasks the delivery of which will meet the 20 objectives which underpin the strategy’s seven key aims and thus support the Vision for the sector.
Final Report – March 2010
Knight, Kavanagh and Page
43
NORTHWEST REGION: SPORT SECTOR STRATEGY
5 5.1
Implementation How are we currently organised to deliver?
Sport is supported by a number of public sector organisations in the Northwest. However, its profile and the emphasis placed upon it varies significantly because it is not identified as a priority sector.
Business Link Northwest – provides impartial business information and advice to all businesses across the region and is the gateway to all public and private sector business support. Support for sport sector businesses is provided through the Growth Team. Business Link Northwest has been responding to the increasing number of sport businesses seeking advice. A detailed breakdown of the type of businesses supported and needs identified is provided in Appendix 3.
UKTI – sport infrastructure is identified within the draft UKTI Business Plan (2009-2010) and whilst sport is not identified as a priority sector, support is provided by International Trade Advisors located in the Advanced Engineering and Materials (AEM) Team. This is linked to providing export support to companies with a proven track record of supplying major sport infrastructure projects and major sport events, building upon the region’s successful hosting of the 2002 Commonwealth Games. The region frequently hosts international delegations seeking to learn lessons from the 2002 Games.
Sub-Regional Partnerships (SRPs) – sport is not presently identified as a priority sector by any SRP. The exception is the Cumbria Economic Plan (2009-2019), which identified the outdoors as a key sector priority. This means that it gets limited support for investor development activity, including key account support to key sport companies located in the region. Instead, ad hoc support is offered on a case by case basis, linked to sub-regional priorities. This has resulted in an uncoordinated response to emerging opportunities in the sector.
Sub-Regional Tourist Boards (SRTBs) – sport tourism is prioritised by several SRTBs, dependent to varying degrees on the strength of the tourism offer in the sub-region. This includes outdoor sport (Cumbria and Lancashire), golf (Merseyside), equestrian (Cheshire) and professional sport clubs (Merseyside). In addition, SRTBs provide ongoing support to attract and develop major sport events in their sub-regions, linked to the Regional Major Events Strategy.
SkillsActive – as the sector skills council for sport and active leisure, a regional network exists to support skills and workforce development in sport. This includes a Regional Manager (SkillsActive) and two directors (linked to delivery of the NSA – Outdoors and Northwest sport & fitness hub). A regional operations group exists for both NSA hubs, comprising representatives from the public and private sectors.
Northwest University Association (NWUA) – sport is prioritised by NWUA due to its strength in, and the level of interest among, the region’s HEIs.
Several other sub-regional initiatives support economic development of sport. These include:
Cumbria’s sport & economy project, which is championing the contribution of sport to the economic development of Cumbria. Lancashire’s sport & economy project, which is supporting the economic development of sport in Lancashire. Manchester Knowledge Capital partnership, which has identified sport as a priority in its business plan, linked to opportunities to capitalise on the sporting strengths of the subregion, via promotion of innovation in service and product development.
Final Report – March 2010
Knight, Kavanagh and Page
44
NORTHWEST REGION: SPORT SECTOR STRATEGY
A number of sporting organisations also exist and operate a regional structure in the Northwest including Sport England, SportsCoach UK, Youth Sport Trust, the English Institute of Sport and national governing bodies of sport. The core business of these organisations is to increase participation, which will undoubtedly stimulate the sports market. 5.2
How will we organise ourselves to deliver?
The strategy will be delivered by the NWDA and other key public and private sector stakeholders. A Sport Sector Advisory Board will be established to oversee implementation. Coordinated by the NWDA, its membership will consist primarily of private sector businesses and key stakeholders involved in developing the sport sector. The Group will co-opt individuals with specific skills for time limited projects if relevant. In addition, an operational group will also be established, led by NWDA, to coordinate and review delivery of an annual work programme that will be produced. This will involve representatives from primarily public sector organisations including Business Link Northwest, UKTI, SRPs, SkillsActive and National Skills Academy (NSA). Relationships will be established with other regional and local organisations such as the NW Ethnic Minority Business Forum, NW Women’s Enterprise Forum to both promote and ensure that business opportunities in the sector are being maximised across the whole of the Northwest.
5.3
Key delivery bodies and accountabilities
The NWDA will be responsible for coordinating the delivery, management and monitoring of the strategy. It will agree an action plan with key stakeholders, which will include agreeing specific roles and responsibilities. Other key bodies include:
4NW – regular dialogue will be established with 4NW to review the development of policies, e.g. spatial, that influenced the future development of the sport sector. NHS Northwest – regular dialogue will be held with NHS Northwest to develop strategic linkages to their health improvement policies and programme to ensure the delivery of joined up activities. SRPs – discussions will be held with SRPs to ensure relevant alignment to sub-regional priorities and delivery of support to key sport businesses located in the region. Business Link Northwest – regular meetings will be held to support the integration of sport within the activities of the Growth Team to support the development and growth of the sector. UKTI – discussions will be held to agree the role of UKTI in supporting the specific growth of the sub-sector around specialist businesses that supply the sport sector. NSA – the NSA (Outdoors) will be a key partner in supporting the delivery of the subsector, through its activity developing the workforce and skills in outdoor sport. Further discussion will be held with the emerging regional hub for sport and active leisure to identify the role that it might, potentially, play in supporting the growth of the sport sector, linked to the priorities identified in this strategy. Sport England – a strategic relationship will be maintained with Sport England Northwest to ensure strategic coordination of activities and investment. National Governing Bodies of Sport (NGBs) – relationships with strategic NGBs will be developed and maintained to ensure strategic coordination of activities and investment to support the growth of the sport sector. Additionally, regular dialogue will be held with Sport England to understand the regional priorities identified in the Whole Sport Plans of NGBs.
Final Report – March 2010
Knight, Kavanagh and Page
45
NORTHWEST REGION: SPORT SECTOR STRATEGY
5.4
Governance and control mechanisms
Although NWDA will be the accountable body, the successful delivery of the strategy will be dependent on a partnership approach to achieving key aims and objectives. It will be important, wherever possible, to ensure that the policies and actions of partner organisations and businesses are consistent with those of the Sport Strategy; in this way the approach will be self-reinforcing and the strategy will be progressively stronger.
Final Report – March 2010
Knight, Kavanagh and Page
46
NORTHWEST REGION: SPORT SECTOR STRATEGY APPENDIX 1: SPORT SECTOR STRATEGY: ACTION PLAN Strategic theme
Objective
Action
Sector
Lead /Support
Time period
Networking and Support
1.a. Provide all sport businesses with access to the right support to increase their competitiveness and productivity
Issue: There is currently a lack of coordination within the region with regard to account management of key sport businesses. In addition a relatively low proportion are aware of, or access, business support through BLNW, or have access to networking opportunities to facilitate sharing of best practice, information sharing and collaboration. Priority subsectors
Business Link Northwest and SRPs supported by NWDA, LAs, UKTI, SkillsActive, NSA – NW hubs, key sport businesses
Medium
BLNW supported by NWDA
Short
1.3 Organise a programme of networking events to promote future developments in the sector, knowledge transfer and the exchange of best practice between businesses in the sector.
NWDA with input from BLNW
Ongoing
1.4 Support businesses through CompeteFor, to compete for London 2012 business and wider sporting event opportunities for sport businesses.
NWDA with BLNW, LDA, London 2012, UKTI, SRPs, LAs, NW Business Forum (2012 Games)
Ongoing
1.5 Develop and maintain a Northwest sport sector website to share information events, best practice and developments in the sport sector.
NWDA supported by BLNW, SkillsActive, NSA – Outdoors, SRPs, LAs,
Short
UKTI with support from NWDA, SRPs, UKTI – National Sport & Infrastructure Team
Ongoing
1.1 Target business support at sport businesses exhibiting growth potential
1.2. Develop marketing campaigns to promote business support services to sport businesses
1.b.Support sport businesses to export
Final Report – March 2010
1.6 Support sport businesses to access international markets linked to major sporting events and sportrelated infrastructure projects.
Knight, Kavanagh and Page
Priority subsectors
NORTHWEST REGION: SPORT SECTOR STRATEGY Strategic theme
Objective
Action
Innovation
2. Improve the sport sector’s ability to adopt new product and processes and to innovate to increase productivity
Issue: There is a proven correlation between innovation and productivity but currently a clear understanding of the extent of innovation in the sport sector in the region is lacking, as are mechanisms to encourage sport businesses to innovate.
Place-Making, Image & Profile
3.a.Promote the Northwest as a world-class location for sport businesses to attract further investment
Final Report – March 2010
Sector
Lead /Support
Time period
2.1 Promote the world class capabilities of Northwest HEIs that exploit the growth potential of the sector
Priority subsectors
NWUA supported by NWDA, HEIs, Innovation Centres, MKC, sport businesses, other businesses
Short
2.2 Promote and develop the strong cluster of businesses with a proven track record of supplying Major Sport Events .
Specialist suppliers to the sector
NWDA supported by BLNW, SRPs, RCOs, LAs, businesses, professional sport clubs & major venues, event organisers, UK Sport
Short
2.3 Develop a ‘lean’ servicing pilot with three major sport venues/professional sport clubs to improve business performance.
Professional sport clubs & major sport venues
TMI supported by NWDA, Professional sport clubs, major sport venues, BLNW, SRPs, LAs
Long
2.4 Produce regular forecasting and economic impact reports to build the strategic intelligence of factors affecting the sector
Priority subsectors
NWDA supported by RIU, NWUA, HEIs
Medium
Issue: Sport makes a significant contribution to the placemaking of the Northwest, through the internationally renowned sport brands based in the region (e.g. Manchester United FC, Liverpool FC, Adidas and Reebok). To attract further investment and major sporting events there is a need to continue to promote the strengths of the Northwest as a location to stage highprofile sporting events and a location for sport businesses.
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY Strategic theme
Action
Sector
Lead /Support
Time period
3.1 Market the sport strengths of the region focusing on raising awareness amongst target audiences (e.g. investors) of the region’s:
Priority subsectors
NWDA, SRPs, sub-regional tourist boards, LAs
Ongoing
3.2 Develop England’s Golf Coast, maximising its tourism, marketing and business development opportunities.
Professional sport clubs & major sport venues
TMP with support from NWDA, LAs, BLNW, individual golf clubs/venues
Ongoing
3.b.To attract/develop sport events of national and international standing
3.3 Promote the region as the location of choice for major sporting events (e.g. Great North Swim, European Badminton Championships), including Pre-Games Training Camps for major events such as London 2012 and Glasgow 2014.
Priority subsectors
NWDA with UK Sport, LAs, NGBs
Ongoing
3.c To raise the profile of the region as a destination of choice for outdoor adventure tourism and sport tourism
3.4 Develop event strategies for specific sports e.g. golf, equestrian, outdoor and adventure sports.
Priority subsectors
NWDA supported by UK Sport, NGBs, SRPs, Subregional tourist boards, LAs, NGBs, sport clubs, event organisers
Ongoing
3.6 Develop marketing strategies to raise the profile of the sport offer to visitors from within and outside the region
Priority subsectors
NWDA with England’s North Country, sub-regional tourist boards, local authorities, SRPs
Short
Objective
Final Report – March 2010
high-profile brands and growth sports businesses location strengths Sporting facilities and infrastructure Specialist sport businesses supplying major sport events; and outdoor adventure offer to visitors from within and outside the region
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY Strategic theme
Objective
Sector
Lead /Support
4.2 Support the Northwest base of the National Skill Academies to ensure that their activities support sport business to grow
Priority subsectors
SkillsActive supported by
4.3 Develop links with the National Skills Academy for Hospitality to improve the hospitality skills of sport businesses, including customer care skills (e.g. Welcome to Excellence and the emerging world-class customer care standard).
Major sport venues & professional sport clubs, outdoor adventure sector
NSA – Hospitality, SkillsActive (SSC) supported by NSA – Outdoors, BLNW, subregional tourist boards, sport businesses, FEI, HEIs
Medium
4.4 Research skills needs and develop plans to ensure provision meets employer needs focusing on the following priorities: major sport venues and professional clubs, outdoor adventure and suppliers to major sport events.
Major sport venues & professional sport clubs
NWDA, LSC, BLNW, HEIs, FEIs, NSAs,
Medium
4.5 Develop and promote the establishment of a Regional Coaching Agency in the Northwest.
Whole sport sector
SkillsActive supported by BLNW, NGBs, sport businesses, HEIs, FEIs, training providers, sports coaches, Sport Coach UK
Medium
4.6 Develop opportunities arising from the Northwest 2012 Skills Action Plan to develop the skills base of the sport sector.
Priority subsectors
NWDA, LSC, Job Centre Plus, SkillsActive, HEI, FEIs, sport businesses
Medium
Priority subsectors
Jobcentre Plus with NWDA, SRPs, URCs, Sport England, CSP, NGBs, LAs
Medium
4.7 Develop local pathways to employment projects, using sport, linked to local job opportunities.
Final Report – March 2010
Time period
Action
Knight, Kavanagh and Page
NWDA, BLNW, NGBs, SRTBS, HEIs, FEIs, training providers, sport businesses
NORTHWEST REGION: SPORT SECTOR STRATEGY Strategic theme
Objective
Action
Infrastructure
5a. To develop the right infrastructure to support the growth of the sport sector in the Northwest
Issue: The development of the right facilities to meet the needs of individuals as both participants and spectators and for businesses is critical to the region in maximising the opportunities from the predicted growth in the sport sector.
5b. To encourage the development of the outdoor adventure offer in the NW, including improvements to infrastructure to meet future needs of consumers.
Final Report – March 2010
Sector
Lead /Support
Time period
5.1 Develop proposals for the sporting infrastructure in the Northwest linked to major regeneration programmes.
Major sport venues & professional sport clubs
Major sport venues & professional sport clubs, URCs, LAs, SRPs, NWDA, LSC, JCP, developers, NGBs, Sport England
Short
5.2 Develop a network of sport villages across the Northwest.
Major sport venues & professional sport clubs
NWDA & Sport England with support from SRPs, LAs, URCs, GONW, NHS Northwest, NGBS
Medium
5.3 Develop plans & strategies to improve the outdoor adventure offer from both the location and thematic perspective
Outdoor adventure sector
NWDA, SRPs, sub-regional tourist boards, LAs, Natural England, Sustrans, Forestry Commission, Environment Agency, National Trust, Ramblers Association, NGBs, Sport England, CSPs,
Ongoing
5.4 Develop the accommodation offering to meet the needs of the outdoor adventure market.
Outdoor adventure sector
NWDA, SRPs, Sub-regional tourist boards, NSA – Hospitality, accommodation providers
Ongoing
5.5 Develop existing and new infrastructure trails to provide inter-linked routes for outdoor adventure activities.
Outdoor adventure sector
Environment Agency, LAs, Natural England, Sustrans, National Trust, Ramblers Associations, NWDA, SRPs
Ongoing
5.6 Undertake a feasibility study into the establishment of a National Centre for the Outdoors in the Northwest.
Outdoor adventure sector
NSA – Outdoors with support from NWDA
Medium
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY Strategic theme
Objective
Action
Health, Community & Regeneration
6. To maximise the contribution of sport to health, community and regeneration agendas
Issue: Sport impacts on many aspects of the Northwest’s economy including the health of its people, physical and community regeneration, and social inclusion. Through a coordinated approach involving key stakeholders the social and economic benefits of sport can be optimised.
6 b. To Increase levels of participation in sport especially among underrepresented groups and maximising linked business opportunity
Final Report – March 2010
Sector
Lead /Support
Time period
6.1 Promote new ways of using ICT and digital technologies to encourage the take up of physical activity and sport.
Priority subsectors
NHS-NW, LAs, Sport & leisure trusts, Sport England, CSPs
Medium
6.2 Develop a stronger enterprise culture and encourage new start-ups (including social enterprise in sport).
Major sport venues & professional sport clubs
NWDA supported by Premier League, BIS, professional sports clubs, SRPs, URCs, LAs, Enterprise Agencies
Medium
6.3 Develop plans to create a national hub for sport broadcasting, building on the development of MediaCityUK and the relocation of BBC Sport and Radio 5 Live.
Digital & creative sector and priority sport sectors
NWDA, Peel Media, MediaCityUK, University of Salford, Salford City Council, sport businesses
Medium
6.4 Develop specific plans to encourage participation in outdoor sport activities amongst 1) local communities and 2) visitors to the region that support government policies to increase participation in sport and develop healthy lifestyles (e.g. Change 4 Life).
Outdoor adventure sector
NHS Northwest, PCTs, Regional Health Officers, sub-regional tourist boards, Sport England, county sport partnerships, LAs, Natural England, NGBs, Ramblers Association
Ongoing
6.5 Develop plans for integrated regional cycling development programme to maximise the growth from cycling in the region.
Outdoor adventure sector
British Cycling supported by Sport England, Sustrans, NWDA, NHS Northwest, SRPs, sub-regional tourist boards, LAs, CSPs, HEIs, FEIs, businesses
Medium
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY Sector
Lead /Support
Time period
7.1 Establish a strategic Sport Sector Advisory Board to oversee delivery of the Sport Sector strategy.
Priority subsectors
NWDA
Short
7.2 Develop an interactive and web-based toolkit for the sport sector to measure its economic and social impact.
Priority subsectors
NWDA
Medium
Strategic theme
Objective
Action
Strategic Influence
7a. To ensure maximum leverage of investment into the region to support the development of the sport sector
Issue: Implementation of this strategy and Action Plan will require strong commitment and support from a wide range of stakeholders and businesses. The development of a coordinated delivery structure is required to ensure maximum influencing and engagement to achieve this.
Abbreviations:
BIS BLNW CSP FEI FA FF GONW GBS HEI
Dept of Business, Innovation & Skills Business Link Northwest County Sport Partnership Further Education Institutions The Football Association The Football Foundation Government Office Northwest Governing Body of Sport Higher Education Institutions
Final Report – March 2010
JCP LSC LA LEGI NGB NSA NWDA PCT
Job Centre Plus Learning & Skills Council Local Authority Local Enterprise Growth Initiative National Governing Body of Sport National Skills Academy Northwest Regional Development Agency Primary Care Trusts
Knight, Kavanagh and Page
RCO SRP SRTB SE SSC UKS UKTI URC
Regional Cluster Organisations Sub-regional Partnership Sub-regional Tourist Board Sport England Sector Skills Council UK Sport UK Trade and Investment Urban Regeneration Companies
NORTHWEST REGION: SPORT SECTOR STRATEGY
APPENDIX 2: DATA NOTES AND GLOSSARY Data geography Regional Economic Strategy – the RES is regarded as the blueprint for the region’s economic development. It is the foundation for everything that the NWDA does. The current RES was launched in March 2006 and sets out a clear vision for the region’s economy. It identifies specific priority actions to meet the economic challenges and opportunities of the next ten years and to close the economic gap with the rest of England. In the geography adopted for the RES, Halton is incorporated into the Merseyside area. Nomenclature des Unités Territoriales Statistiques – NUTS areas for statistics were established by Eurostat more than 25 years ago for the classification of economic activities in the European Community. In the geography used for NUTS data (including GVA), Halton is included in Cheshire. Regional offices – in the context of a company perspective a regional office need not be coterminous with the governmental definition of the Northwest Region.
Inter-Departmental Business Register (IDBR), Enterprise and local Unit level data Office for National Statistics data (IDBR) is crown copyright material and has been reproduced with the permission of the controller of HMSO. Data analysis – prepared by Knight, Kavanagh and Page for the Northwest Regional Development Agency. Enterprise data – The number of enterprises, employees and turnover are based on extracts from the IDBR at Enterprise (business) level. Enterprise information can place data at Head Office level and result in ‘higher/lower’ numbers than might otherwise be expected. This is not, however, consistent across all areas (see also turnover). Unit data – The alternative is a 'local Unit' count which reflects the number of business sites, and employees in relation to their actual place of work rather than the enterprise (head office) location. See also http://www.statistics.gov.uk/idbr/idbr.asp Combining data – Enterprise and Unit data must not be combined as this leads to double counting; an Enterprise is a Unit, but a Unit may not be an Enterprise. Individual reports on enterprise and unit data are included in the appendices. Data summation – At various points within the report and appendices row and column totals do not sum; this is due to non-disclosure and does not invalidate any of the figures shown.
Business turnover Business turnover refers to the monies going through a company’s accounts. Although turnover has been used as part of the assessment, caution should be exercised in the use of the data. In addition to the company headquarters issue (referred to above): Not all companies disclose data on turnover. Turnover is not a surrogate for profit. One of the most obvious examples is professional football clubs, many of which have high levels of turnover but low operational profit. Turnover is provided at 2006 prices. Time series data have been modified to remove the effects of inflation. Consequently all percentage growth or decline reflects real change since 1998.
Sector definition by Standard Industrial Classification Sectors have been defined on the basis of 4-digit SIC codes; details can be obtained from the NWDA research team upon request. As some 4-digit codes span more than one sector, the definitions are only approximate and the data may omit some activity within the sector and include some activity outside of it.
Working-age population Agreed with the Office of National Statistics as males aged 16-64 years and females aged 16-59 years and is shown as a proportion of England’s population aged 16-59/64 years.
Global sports market (events) – as defined by PricewaterhouseCoopers The sports market consists of gate revenues for live sporting events; rights fees paid by broadcast and cable television networks, television stations, and radio broadcasters to air those events; merchandising, which includes the selling of products with player likenesses or team logos and the selling of other intellectual property; sponsorships, which include naming rights and payments to have a product associated with a team, league, or event; and Internet, mobile, satellite, and other rights packages associated with sports events. Food concession revenues are not included. It does not include the implied increase in sales in other sectors, for example of televisions, which is often seen to precede major sporting events such as the FIFA World Cup.
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
Global sports market (equipment, apparel and footwear) – as defined by NPD group and Global Industry Analysts The sportswear, leisurewear and fitness clothing market are covered by the Global Industry Analysts study while the NPD study reviewed sales of sports equipment, apparel, and footwear.
Gross Value Added GVA data was only readily available for NUTS areas at the time of writing this paper and had gaps in its coverage due to SIC coding. This, combined with the incompatible geographies used in the NUTS and RES data, led to the decision by the NWDA that sub-regional sectoral and industry GVA figures could not be made available for the study – where figures have been provided they are indicative only of relative scale within the region as they are based on an alternative definition of the sector as used by the SIRC (see below).
Sports Industry Research Centre: sports business definitions The SIRC model of economic impact assessment differs from the model applied for this strategy. It uses as its basic input – where possible – economic variables from official statistics. 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, including companies such as Nike, JJB, football clubs and 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 includes companies from the commercial sector that do not provide a sport product, but 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. 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. 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. Income and expenditure flows between the seven sectors are used to draw up 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
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
APPENDIX 3: SIRC / SPORT ENGLAND STUDY A study conducted by Sport England and the Sport Industry Research Centre (SIRC) (2008) assessed the economic value of sport across England via an approach 21 linked to consumer behaviour. While different from the NWDA methodology,22 it confirms that the Northwest has a strong presence in terms of consumer spend on sport.
Sports expenditure23 – consumer spending on sport in the Northwest averages £335 per person (of working age); this compares to a national high of £350 and low of £287. In total, it represents £2.3 billion and is the third largest 24 regional figure in England. While this reflects many factors, including the size of the region, it nonetheless represents a large and relatively resilient marketplace for businesses.
Sports-related GVA25 – in the Northwest averages £503 per person (of working age); this compares to a national high of £557 and a low of £446. In total, it represents £2.1 billion; it is the third largest 26 regional figure in England and the joint highest in terms of sport GVA as a share of overall regional GVA.
Sports-related employment 27 – the Northwest is home to the second largest number of sports jobs in England (at a regional level), while within the region the sector scores fourth highest in terms of sport’s share of all regional jobs (1.9%) England = 1.8%.
Figure 18: Sport expenditure as a percentage of national and regional totals Sports expenditure as a % of national total
Sports expenditure as a % of regional total 4.0%
East 8.5
North 4.7
South 16.8
3.5% 3.0%
2.9%
2.9%
2.8%
2.7%
2.5%
2.6%
2.5%
West 9.3 2.4%
2.4%
2.3%
Londo 15.4
2.0% South 9.4
1.5% 1.0% 0.5%
Yorkshire Humb 10.4
0.0%
North 13.8 East of 11.7
21
The basic principle is one of equality between total output, total income and total expenditure. The NWDA study is closely aligned to employment and business numbers and reflects the approach adopted by the agency for all sector assessments. 23 Source: SIRC study (2007). 24 Rank position must be treated with a degree of caution; for example, the population of the South East is 8.2 million, compared to only 2.5 million in the Northeast and 4.7 million in the Northwest. 25 Source: SIRC study (2007). 26 As explained above, the rank position of regions reflects a large number of variables and must be treated with a degree of caution. Consequently KKP has modified SIRC data to produce rates per head of population. 27 Source: SIRC study (2007). 22
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
Figure 19: Sport GVA as a percentage of national and regional totals Sports GVA as a % of national total
S por ts G V A as a % o f re gio nal tot al 4 .0%
East Midlands 8.5%
Nort hEast 4.7%
So uth East 17.1%
3 .5% 3 .0%
SouthWest 8.8%
2 .5% 2 .0 %
2 .0 %
2 .0%
1.9 %
1.9 %
1.8%
1.7 %
1.6 %
1.6 %
1 .5%
1.3 %
London 15.5%
West Midlands 9.6%
1 .0% 0 .5%
Yorkshire and Humber 9.8%
0 .0%
North West 13.7% East of England 12.2%
Figure 20: Sports employment as a percentage of national and regional totals Sports employment as a % of regional total Sports employment as a % of national total
4.0%
North East 5.6%
South East 16.5%
South West 9.2%
3.5% 3.0% 2.5% 2.0%
2.2%
East Midlands 9.4%
2.1%
2.0%
1.9%
1.5%
1.9%
1.8%
1.7%
North West 13.7%
1.6% 1.4% West Midlands 10.2%
1.0% 0.5%
Yorkshire and Humber 10.9%
0.0%
Final Report – March 2010
Knight, Kavanagh and Page
East of England 13.0% London 11.5%
NORTHWEST REGION: SPORT SECTOR STRATEGY
APPENDIX 4: Business Support Activities An important NWDA role is business support. It has increased the level of support offered to help companies through the current economic climate. Business Link Northwest provides high quality, impartial information and advice and is also the gateway to all public and private sector business support. Support for the sport sector is provided through the Growth Team at Business Link Northwest. The tables below provide a breakdown of the type and location of sport businesses receiving supported during 2007 and 2008. Table 6: Breakdown of sport businesses receiving support from Business Link Northwest from 1 April 2007-1 July 2009 SIC code Description 2007
2008
Total
05.01 Fishing
2
5
2009 0
35.42 Manufacture of bicycles
14
5
0
19
36.40 Manufacture of sports goods
59
51
19
129
25
7
199
52.485 Retail sale of sports goods, games and toys, stamps and coins
91
83
55.21 Youth hostels and mountain refuges
26
23
8
57
71.401 Renting of sporting and recreational equipment
17
29
6
52
92.341 Dance halls, discotheques and dance instructor activities
65
73
92.611 Operation of ice rinks and roller skating rinks
5
3
1
9
92.619 Operation of sports arenas and stadiums
48
62
17
127
92.61 Operation of sports arenas and stadiums
71
66
22
159
92.62 Other sporting activities
283
359
85
727 256
17
155
92.72 Other recreational activities not elsewhere classified
116
113
27
93.04 Physical wellbeing activities
72
87
30
189
Total
869
959
257
2,085
Table 7: Breakdown of sport companies receiving support, broken down into sub-regions Sub-region
2007
%
2008
%
2009
%
Total
Cheshire & Warrington
137
15.77%
143
14.91%
40
15.56%
320
Cumbria
194
22.32%
213
22.21%
62
24.12%
469
Greater Manchester
216
24.86%
243
25.34%
67
26.07%
526
Merseyside
121
13.92%
146
15.22%
38
14.79%
305
Lancashire
170
19.56%
195
20.33%
46
17.90%
411
Not UK
31
3.57%
19
1.98%
4
1.56%
54
Total
869
100%
959
100%
257
100%
2,085
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
Table 8: Breakdown of sport businesses receiving intensive assists from Business Link Northwest from 1 April 2007–1 July 2009
SIC Code Description
2007
35.42 Manufacture of bicycles
2008
2009 Total 1
1
36.40 Manufacture of sports goods
8
5
52.485 Retail sale of sports goods, games and toys, stamps and coins
10
13
1
14
6
29
55.21 Youth hostels and mountain refuges
1
1
71.401 Renting of sporting and recreational equipment
2
2
92.341 Dance halls, discotheques and dance instructor activities
7
11
6
24
1
92.619 Operation of sports arenas and stadiums
1 3
92.61 Operation of sports arenas and stadiums
2
1
92.629 Other sporting activities not elsewhere classified
9
29
8
46
92.72 Other recreational activities not elsewhere classified
4
8
7
19
93.04 Physical wellbeing activities
22
15
4
41
Total
62
89
34
185
Table 9: Breakdown of sport companies receiving intensive assists, broken down into subregions Sub-region
2007
%
2008
%
2009
%
Total
Cheshire & Warrington
8
12.90%
16
17.98%
6
17.65%
30
Cumbria
3
4.84%
11
12.36%
9
26.47%
23
Greater Manchester
23
37.10%
21
23.60%
9
26.47%
53
Merseyside
20
32.26%
21
23.60%
4
11.76%
45
Lancashire
7
11.29%
19
21.35%
6
17.65%
32
Not UK
1
1.61%
1
1.12%
Total
62
100%
89
100%
2 34
100%
185
Business support topics covered during the intensive assists include: sales & marketing, general management, finance & accounting, operation management, accessing finance, human resources, ICT, business diagnosis, regulation & legal, knowledge transfer, new product development, e-business, export/import, energy (use & efficiency), environment, health & safety, international links and ‘other’.
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
APPENDIX 5: Data accuracy The four main concerns about the data used in the study are outlined below: 1.
Definition of the sector
There is currently no universally accepted/adopted definition of the sports sector. This means that different studies conducted on this sector are not directly comparable. This can lead to variations in estimates related to the number of businesses, employees, scale of turnover and GVA, due to the application of different definitions rather than actual change or variation. 2.
Standard Industrial Classifications
SIC data is historical and, in the case of sport, does not reflect the way the sector is organised or how it operates. For this study, analysis was conducted at the four-digit level, which means that certain sports business activity is omitted from the analysis and other, non-sporting, activities are included. The key advantage is that the approach adopted to assess the sector is wholly consistent with the analysis conducted for all the other sectors with which the NWDA works. Alternatives to be considered for future studies and strategies include the recently released SIC 2007 codes. 3.
Enterprise vs. Unit data
Enterprise level data reflects head or regional office location (irrespective of where the employee actually works) and can, consequently, imply greater levels of economic activity than Unit level data which more closely reflects actual jobs on the ground. Both data sets are valid but each can produce a different picture of the country or region. 4.
Turnover
While interesting and indicative of the scale of finances within the region, care should be taken not to consider or suggest an obvious link between turnover and profit. For example, many football clubs have high turnover figures but low profit margins; some actually operate at a loss. A note of caution: While industry projections (made as recently as mid-2008) have consistently predicted continued growth and a healthy sector over coming years the envisaged outcomes need to be considered in light of the changes in national and global economies experience in the second half of 2008 and early 2009.28 A particular concern is that projections generated to date have been predicated on assumptions of a continued increase in personal disposable income providing the platform for new business opportunity associated with health, sport and selfimage. The sports sector is largely consumer driven. In the current economic climate, the following will need to be considered:
28
PricewaterhouseCoopers LLP (PwC), has, for example, predicted that the economic effects of the 2009 Super Bowl (2009) will be adversely impacted, relative to previous years, as a result of a scaling back of household and corporate spending – there will be fewer visitors and media, a shorter average length-of-stay per visitor, and less spending in hospitality and related industries throughout the Tampa Bay area.
Final Report – March 2010
Knight, Kavanagh and Page
NORTHWEST REGION: SPORT SECTOR STRATEGY
For the foreseeable future, consumer expenditure is expected to be very tight. People’s expectations will inevitably be high and, therefore, tolerance margins in relation to the quality and value for money presented by the sector’s products and services will be small. Sport and leisure are not essentials – whilst attracting significant spend they cannot be likened to commodities such as food, drink, shelter and clothing. Consequently, the sector is almost certainly more vulnerable to economic downturn and/or reductions in confidence. Competition will be tougher. For example, prior to the current downturn, between 2002 and 2007, membership numbers for health and fitness clubs increased by 46% but competition led to a reduction in average fees of more than 25%.
Ironically, it is possible that the current downturn may play a role in ensuring that suggested improvements do take place as Government looks for initiatives and building programmes that can help economic recovery.
Final Report – March 2010
Knight, Kavanagh and Page