The sports industry has consistently showcased its monumental impact on the global economy, despite facing a number of challenges over the last few years.
From unprecedented revenue statistics to the meteoric rise of specific sectors, this article delves into the fascinating world of sports economics in 2023.
Dive in to unravel the numbers and trends defining today’s sporting landscape.
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Market Growth and Resilience
Despite challenges of recent years (2020 saw a decline of 15.4%), the sports industry is resilient and has indeed gone on to thrive.
To illustrate this, the global sports market size was valued at $370 billion in 2022, but is projected to reach $677.7 billion by 2028, demonstrating a Compound Annual Growth Rate (CAGR) of 10.61% over this period.
This year, sports betting and lottery ventures reached a remarkable market size of $242 billion globally, marking a notable surge from 2020’s total of almost $173 billion (and the year isn’t over yet).
It’s clear, then, that this sub-sector plays a major role in the industry’s total revenue.
While countries like the UK are home to leading betting enterprises, like those listed here, the US is also making its mark, with a sports betting revenue of $4.33 billion in 2021.
Macau is thriving in this area too, despite its tiny population. Here, the soccer sports lottery raked in 415 million Macau patacas (about $51 million) the same year.
With over 24,244 businesses worldwide in this arena, the rise of sports betting underscores its widening appeal and growth potential in the coming years.
Top Earning Sports Globally
In terms of revenue generated, soccer is the clear winner, generating around $50 billion annually. Following behind it (although at quite a distance), these sports round out the top five:
- American Football: $17 billion
- Basketball: $7 billion
- Cricket: $3.5 billion
- Formula 1: $1.4 billion
When it comes to athlete wages, however, we can see a pretty different story. British fans might think the top soccer players are somewhat overpaid, with the average Premier League star earning $4.7 million a year. But that doesn’t even come close to the top-paying American sports leagues.
It’s actually basketball that reigns supreme as the highest paid sport on a global scale. As of 2023, players in the NBA rake in an average annual salary of nearly $10.5 million, more than double the average Premier League footballer. This significant figure also overshadows the NFL, where players earn an average of $4.5 million yearly.
American leagues occupy four of the top five positions for those with the highest average player salary. Here’s how a closer look at the full top 10 highest paying sports leagues as of 2023, taking into account the average salary per player:
- NBA: $10,407,099
- NFL: $4,539,164
- English Premier League: $4,497,218
- MLB: $4,355,353
- NHL: $3,538,520
- La Liga: $2,228,105
- Bundesliga: $1,933,292
- Serie A: $1,914,391
- Ligue 1: $1,390,860
- MLS: $490,597
US And UK Revenue Highlights
It’s impossible to ignore the US’s significant contributions to the sporting industry’s value worldwide.
With over 900 stadiums, the U.S. generated $46.4 billion in-game revenue, outpacing all other countries by a long way.
To compare, the sports event market is worth $2.4 billion in the UK. But back to the US, where advertisers shelled out a premium of $6.5 million for a mere 30-second spot during the Super Bowl. What’s more, online sports betting is worth over $7.5 billion in the US alone.
Despite having a much smaller population, the UK isn’t far behind the US in terms of revenue generated from the betting market: $5.4 billion in 2021.
However, we can attribute the differences to the UK’s long-standing betting culture and widespread legality (there are still only 33 states with legal online sports betting at the time of writing).
Sports Broadcasting Revenue Is Growing
A significant driver of the sports industry’s growth is the technological evolution within sports broadcasting.
As internet usage grows, so too has there been a shift in how fans consume sports content.
Traditional TV broadcasting remains dominant, but the emergence of streaming platforms is revolutionizing the landscape.
Taking it a step further, the Premier League is even exploring ways to incorporate VR into live match streaming, promising an even more engaging viewer experience.
Of course, 4K and Ultra HD broadcasts also provide sharper images, drawing fans closer to the action.
This incredible visual clarity, coupled with surround sound technologies, makes watching sports at home almost as thrilling as being at the venue, which is perhaps why the broadcasting industry is thriving so much—why bother going to the game anymore?
At the end of 2022, the global value of sports media rights reached $55.07 billion. By 2024, it’s expected to surpass $60 billion. There are a few leagues that are dominating the industry.
As you might expect, the list of highest broadcasting rights revenue by league is similar to the top earning leagues globally above:
- NFL: $4.52 billion
- EPL: $3.83 billion
- NBA: $3.12 billion
- La Liga: $2.27 billion
- MLB: $1.65 billion
New Trends Shaping The Sports Industry’s Value
While betting and ticket sales continue to play a major role in boosting the sector’s value, there are new trends that are also growing.
For example, accounting for $1.38 billion in 2022, eSports is carving a significant niche in the industry.
Prizes given out in just one game, Dota 2, amounted to over $50 million in 2021, and China alone has an eSports market more than $100 million more valuable than that of any other country.
Then there’s also the NFT wave to consider. The sports NFT market, which encompasses memorabilia and significant moments, saw a valuation of $1.4 billion in 2021.
With major leagues like the NFL already on board, we can only imagine that it won’t be long before others follow and this sector explodes in net worth.
Fitness trackers are also becoming more popular among the general public, and these devices are also playing a decent role in boosting the sports industry’s valuation.
In 2020, Apple and Garmin reported an increase in revenue by 20% partly down to fitness tracker sales.
Conclusion
The sports industry, while affected by external factors like economic downturns, remains a thriving and evolving sector.
Its capacity to adapt and grow is evident in its economic contributions and the vast array of trends it continues to foster. The industry is worth billions worldwide, with the US remaining the main contributor.
Wearable devices, betting, and ticket sales all play a significant role in the value of the sports sector worldwide.
