The Economic Dimension of Sport for a National Economy - Germany Prof. Dr. Holger Preuß Johannes Gutenberg-Universität Mainz Vilnius, 01.10.2013 | Economic Dimension of Sport © Prof. Dr. H. Preuß |1 Aim of this presentation EU “White Paper on Sport” requests “satellite accounts sport” (SAS) in all member states. 1) How did Germany construct this SAS ? _____________________________ 2) What is the importance of “private consumption” on the economy? 3) What is the importance of “sponsor / advertisements / media rights consumption” on the economy? 4) What is the importance of “construction” on the economy? ______________________________ 5) Which branches profit from sport ? a) in terms of “gross value added” b) in terms of “jobs created” | Economic Dimension of Sport © Prof. Dr. H. Preuß |2 Methods How did Germany construct this SAS ? | Economic Dimension of Sport © Prof. Dr. H. Preuß |3 The Sport Sector – Overview sport consumption sport consumption and its effect on … household not monetarily 1. 2. for participation for passive sport 1. 2. 3. 4. 5. Volunteering Happiness & well-being Education Integration … others monetarily 1. 2. 3. 4. 5. 6. Sponsoring Media Rights Sports Venues Club Subsidies High-Performance Sports Sport-Related Injuries 1. 2. 3. 4. National sport success - image International relations Crime prevention … | Economic Dimension of Sport © Prof. Dr. H. Preuß |4 The Sport Sector – Overview monetarily others household sport consumption 1. 2. 1. 2. 3. 4. 5. 6. for participation for passive sport Sponsoring Media Rights Sports Venues Club Subsidies High-Performance Sports Sport-Related Injuries | Economic Dimension of Sport © Prof. Dr. H. Preuß Study 1 Private Consumption of Sport Study 2 Advertisement, Sponsoring & Media Rights Study 3 Sport Venues Construction & Operation Secondary Analysis |5 The Sport Account Satellite– Overview Private Consumption of Sport Sport Venues Construction & Operation Advertisement, Sponsoring & Media Rights Source: Calculation of GWS Gmbh, G. Ahlert | Economic Dimension of Sport © Prof. Dr. H. Preuß |6 Data collection Studies 2) What is the importance of “private consumption” on the economy? 3) What is the importance of “sponsor / advertisements / media rights consumption” on the economy? 4) What is the importance of “construction” on the economy? | Economic Dimension of Sport © Prof. Dr. H. Preuß |7 Studies conducted … Study 1 Study 3 Study 2 Private Consumption of Sport Advertisement, Sponsoring & Media Rights Sport Venues Construction & Operation n = 7,031 CATI consumers n = 10,424 CAWI consumers in 3 waves n = 1,500 CATI industry n = 508 CATI sport organisations n = 74/59 CATI agencies/experts n = 455 CATI community level n = 204 CATI expert interviews + secondary data 2009-2011 2011 2012 | Economic Dimension of Sport © Prof. Dr. H. Preuß |8 Overall target of the 3 studies What is the monetary primary impact of sport in our reference year (2008) for the German economy? • by consumers, companies and sport organizations as detailed as by differentiating 88 industry branches. … • consider imports / exports | Economic Dimension of Sport © Prof. Dr. H. Preuß |9 Overall method of the 3 studies Methodological steps 1. Categorization (definition of all sports / advertising / rights / sport venues) 2. data collection “numbers” by a representative samples 3. data collection “monetary expenditures / investments” by “unit” 4. calculation of overall expenditures (input) in categories of the 88 branches to be used for the German Input-Output Model | Economic Dimension of Sport © Prof. Dr. H. Preuß | 10 Studies conducted … Study 1 Study 3 Study 2 Private Consumption of Sport Advertisement, Sponsoring & Media Rights Sport Venues Construction & Operation n = 7,031 CATI consumers n = 10,424 CAWI consumers in 3 waves n = 1,203 CATI industry n = 308 CATI sport organisations n = 74/59 CATI agencies/experts n = 455 CATI community level n = 204 CATI expert interviews + secondary data 2009-2011 2011 2012 | Economic Dimension of Sport © Prof. Dr. H. Preuß | 11 Study 1: Consumption of households Definitions 1) Sport = 71 types of sport (clustered by consumption) 2) Consumption = based on the broad Vilnius Definition, which includes all categories of consumption included in the statistical and narrow Vilnius definition plus all activities and consumption categories that need sport as an input (SpEA, 2006) • Active participation: 32 consumption categories • Interest-related: 18 consumption categories | Economic Dimension of Sport © Prof. Dr. H. Preuß | 12 Study 1: Consumption of households transportation 1% 2% 2% 1% 3% 4% sport-related vacation 30% 33,7 bn. € 10% sport shoes & clothing sport equipment membership & entrance fees 112.6 bn € 13,3% 15,0 bn. € (active participation) media & information technology body care 13,6% 15,3 bn. € 19,9% 22,4 bn. € self-financed practices & performance diagnostics sport food & supplements sport-related insurance medical services & preventive products | Economic Dimension of Sport © Prof. Dr. H. Preuß | 13 Study 1: Consumption of households Consumption stimulates industry branches… Government Services Industy Finance Transport Source: Calculation of GWS GmbH, G. Ahlert | Economic Dimension of Sport © Prof. Dr. H. Preuß | 14 Trade Studies conducted … Study 1 Study 3 Study 2 Private Consumption of Sport Advertisement, Sponsoring & Media Rights Sport Venues Construction & Operation n = 7,031 CATI consumers n = 10,424 CAWI consumers in 3 waves n = 1,500 CATI industry n = 508 CATI sport organisations n = 74/59 CATI agencies/experts n = 455 CATI community level n = 204 CATI expert interviews + secondary data 2009-2011 2011 2012 | Economic Dimension of Sport © Prof. Dr. H. Preuß | 15 Study 2: Advertisement, Sponsoring and Media Rights project guidance Definitions 1) 2) 3) 4) Sport = 71 types of sport Sport-related = advertising, sponsoring and media rights defined by criteria. Sponsoring = contracted exchange (and not donations) Advertising = real market communication (and not just information (internet)) | Economic Dimension of Sport © Prof. Dr. H. Preuß | 16 Study 2: Advertisement, Sponsoring and High performance Media Rights sport Grassroots Sports 1,096 2,045 In million Euro Input for SAS in mill. € by industry branch: Trade Manufacturing Construction Hospitality industry Scientific and technical service Finance and Insurance Information and Communication Energy Health and Social service Other services | Economic Dimension of Sport © Prof. Dr. H. Preuß | 17 Studies conducted … Study 1 Study 3 Study 2 Private Consumption of Sport Advertisement, Sponsoring & Media Rights Sport Venues Construction & Operation n = 7,031 CATI consumers n = 10,424 CAWI consumers in 3 waves n = 1,203 CATI industry n = 308 CATI sport organisations n = 74/59 CATI agencies/experts n = 455 CATI community level n = 204 CATI expert interviews + secondary data 2009-2011 2011 2012 | Economic Dimension of Sport © Prof. Dr. H. Preuß | 18 Study 3: Sport venues, construction and operation project guidance Definitions 1) Sport Venue = location where the 71 sports are performed • translates into 59 sport venues 2) Differentiation of costs to be considered • investments | operation/maintenance 3) Investor/carrier of costs • public | non-profit organisation | for-profit organisation | Economic Dimension of Sport © Prof. Dr. H. Preuß | 19 Study 3: Sport venues, construction and operation Specific venues: 6.9 bill € (30 %) Particular venues (stadia…): 1.5 bill € (7 %) Central sport venues: 13.3 bill € (59 %) Sport tracks: 1 bill € (4 %) Construction of sport venues, modernisation, maintenance and operation: 22,6 bn. €, 74% are paid by public authorities For all together 231.441 sport venues and 366.795 km „tracks“ | Economic Dimension of Sport © Prof. Dr. H. Preuß | 20 Study 3: Sport venues, construction and operation => for SSA compilation transformation of the costs into 88 industry branches 0 Hochbau Building construction Gebäudebetreuung; Garten- und Landschaftsbau Bulding operation and Gardening Vorbereitende Baustellenarbeiten, Bauinstallation und… Preparations of construction Civil engeneering Tiefbau Energy Energieversorgung … Grundstücks- und Wohnungswesen … Wasserversorgung … Abwasserentsorgung … Maschinenbau … Großhandel (ohne Handel mit Kraftfahrzeugen) … Vermietung von beweglichen Sachen 1,000 2,000 3,000 4,000 3,144 2,832 31 1,684 956 86 2,380 1,902 891 421 291 278 242 32 230 Architektur- und Ingenieurbüros; technische, physikalische und… 16167 163 Einzelhandel (ohne Handel mit Kraftfahrzeugen) 19 Herstellung von sonstigen Waren Herstellung von Metallerzeugnissen Sammlung, Behandlung und Beseitigung von Abfällen;… Versicherungen, Rückversicherungen und Pensionskassen… Rechts- und Steuerberatung, Wirtschaftsprüfung | Economic Dimension of Sport © Prof. Dr. H. Preuß 167 Betrieb operation 152 129 Investitionen investment 115 111 | 21 Overall Results Which branches profit from sport ? a) in terms of “gross value added” b) in terms of “jobs created” | Economic Dimension of Sport © Prof. Dr. H. Preuß | 22 Overall Results SAS – European comparison | Economic Dimension of Sport © Prof. Dr. H. Preuß | 23 OverallResults SAS – Composition of the sport-related gross domestic products in Germany (2008) with regard to its demand side related components, in bill. EUR households clubs & associations government exports imports Source: Calculation of GWS GmbH, G. Ahlert | Economic Dimension of Sport © Prof. Dr. H. Preuß | 24 OverallResults SAS – Contribution of individual industries to the sport-related employment in Germany in 2008 Sport Trade State service Transport / Hotel Source: Calculation of GWS GmbH, G. Ahlert | Economic Dimension of Sport © Prof. Dr. H. Preuß | 25 OverallResults SAS – Contribution of individual industries to the sport-related gross value added in Germany in 2008 Sport State service Information Trade Source: Calculation of GWS GmbH, G. Ahlert | Economic Dimension of Sport © Prof. Dr. H. Preuß | 26 Conclusion In comparison to other European SAS the German SAS is based on primary data collection because public statistics cannot be used. An overall new concept to evaluate these data was developed. Despite limited research budgets the data were: • calculated on sufficient samples of the most important categories • validated by differentiating organisation (e.g. revenue of one entity must be expenditure of the other) The 3 studies evaluated the primary economic impact of sport (reference year 2008) for Germany targeting a detailed base of 88 industry branches Overall findings show: Sport related consumer consumption is a huge amount (6.6% of all private consumption) Sponsorships and advertisements in grassroots sports contribute more than that of high performance sport Most investments for sport venues and their operation is spent for central sport facilities and stems from public resources Many different industries benefits from sport expenditures and create 4.4% of all jobs in GER Sport related gross value added 2008 in GER was 3.3% | Economic Dimension of Sport © Prof. Dr. H. Preuß | 27 Thank you for your attention Prof. Dr. Holger Preuß Johannes Gutenberg-Universität Mainz 5 Studies coordinators: Household Consumption: Sponsoring and Media : Sport venues: Satellite Account Sport: Christian Alfs Iris an der Heiden, Frank Meyrahn (2hm) Iris an der Heiden, Frank Meyrahn (2hm) Gerd Ahlert (GWS) all projects in cooperation with Gerd Ahlert (GWS) financed by BMWi, BMI, BISp Villnius, 01.10.2013 | Economic Dimension of Sport © Prof. Dr. H. Preuß | 28