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Author: Ohio(z)Okhai Elakhe
Posted to the web: 11/1/2011 8:59:41 AM

Should SportsNot Be A Part Of Okonjo Iweala (Entertainment Industry) Economy DiversificationDrive

I was putting final touches to my article “SPORT AS ANECONOMIC TOOL FOR WEALTH CREATION/ACHIEVING THE VISION 20: 2020 DREAM”, whenthe finance minister Okonjo Iweala who doubles as the head of the economic team(ET) set up by President Goodluck Jonathan, dropped on the public the FGs planto diversify the economy.

 

One of the areas ‘is’ entertainment, I said great! Butquickly asked myself ‘does the FGs plan to invest in the (200, 000 peopleemployed $250 million [mn]) entertainment industry include sports? The sportsminister Yusuf Suleiman is certainly not on board the economic team. Is thatthe FG/ET do not see it as an integral part of the entertainment industry orthey feel it can stand alone? If itâ's the latter it got no mention and if theformer my old dictionary, Longman 1989 edition (yes I went looking for an olddictionary on purpose) defines sport as “a source of diversion or recreation; apastime; physical activity engaged in for recreation”. It defines entertainmentas “a public performance’.

 

Sport Business Magazine (April 2006 p29) ‘who’ shouldknow better says “sport in its natural form is certainly entertainment…”

 

There are sayings that ‘sport is what unites Nigeria’(a whole 160 mn of them) and ‘sportis the opium of our youth’ (a whole +80 mn of them). With unemployment at 43% (http://www.workersalternative.com/economy/83-ola) and Nigeria needing to move its GDP from $198.5bn(2010) to $900 billion [bn] via anannual growth of 13% in order to achieve its vision 20:2020 aim & preparefor challenges of moving from the 9th position as the most populatedeconomy to the 4th with 299 mn by 2050, it has to look at sportswell to create the needed 25mn jobs over the next ‘9’ years.

 

Sports Illustrated (The Best of Sports Illustrated; 1stEdition 1996, p140) says that the ‘gross national sports product of the U.S for1987 was calculated as $50.2bn . Whatelse would have made a society known for its moral stands bid for the 2002Winter Games then bribe to get it?

 

Being an activity to which money exchanges hands forservices rendered/goods sold, we must consider it as a business opportunity foreconomic growth. In recent times especially in advanced countries the debate asto whether sports is a business or not has a fact long past or as aconsequence,  become a subject to thesame regulations that affect all business. Her Royal Highness; Princess Haya off Dubai once said “the cosmopolitannature of Dubai… has encouraged interest in a wide range of sports, which hasbeing incorporated into our economic development”.

 

There are other claims that push sport as an economicbuilder. ‘The roar for instance (all italicsmine) which greeted the LOC… announcement that…Russian city of  Sochi had been chosen to host the 2014 WinterOlympics recorded wild celebrations of an event which marked what many see as aturning point in the countryâ's economic & social history… A new happening& whole new series of economic opportunity says Sport Business (August 2007p48).

 

Or Sir Martin Sorellâ's (head of WPP & ex IMG man)claim at Sports-Accord 2007 that there was an indefinable significant economicquadrennial effect associated with the Olympic Games which means that “years inwhich there is an Olympics tends to experience a considerable surge in global GDP”.Since 1984 the direct impact has increased by 84%. Seoul added $2bn to its GDP, Athens 2004- $10bn to Greek GDP making it thefastest growing economy in the E.U.

 

FIFA (senior men) World Cups have similar impact. Ithelped Japankick start its economy in 2002. It added 0.3% points on GDP growth &created 50,000 new jobs. Thus one can comprehend the war like competition thattakes place between prospective host cities bidding for the events.

 

Sport is said to control a lionâ's share (83%) of sponsorship deals ($30bn) globally (World Sponsorship Monitor) as far back as 2005. Even with therecession sports thrived exceptionally. Nigeria is not left out even if it ismaking a huge mistake centering on soccer alone.

 

Itâ's funny, a TNS May2007 survey of 5051 people in Nigeriaover 18 reveals a following of other sports (TV only).  Soccer eyeballs was 41% , basketball-10% Athletics-8%, Tennis-7% , Golf-3% .  Soccer alone had 28% for the EnglishPremier League, International Matches - 27%, UEFA Champions League - 27%, Nigerian Premier League – 17%, CAF Champions League -12%, Spanish La Liga – 12%, Serie A - 8% etc, showing a hugedemand/consumption. Itâ's equally funny the hip-hop sector (which grossed $3bnglobally in 2000); a part of the entertainment industry has sports has one ofits segments.  From P. Millers No-LimitSports Management Company to 50cents G-Unit SportsWear & Management, t o And I Mixtapetour to The Harlem Globetrotters to the Kenny/DI Primetime Entertainment toHOOPHOPeNTERTAINMENT (yes that the spelling), CEOs of hip-hop areshowing that sports, hip-hop & entertainment mix well.

 

Even if soccer/sport‘is’ seen as a political tool by the FG, it can tighten its grip on it byinvesting in it well. The Nigeria-Guinea CAF Nations Cup qualifier out come onthe 8th October, 2011- a recycled case study/scenario- proves this. TheOlympic games according to other authorities “is certainly about money (and equally) political… there is nosports today anywhere which doesn’t face the same issues. Itâ's part of theDNA”. Sport as an economic tool for wealth/job creation is also a uniqueplatform for companies to display their products/services/ideas to a targetgroup of people.  “China got the rights to host the Olympics (only) largely because the vote to go to China was leadby demands of sponsors anxious to gain profile in the …worldâ's fastest growingmarket”.

 

Using the advice givento India by Tom Houseman “the (Nigerian) sporting community needsto move away from government civil service – style administration (not thatgovernment should disengage from sports);towards a more modern approach which seeks amongst other things, benefit fromthe commercial & event management revolution experienced by sport”.

 

Niger Stateâ'sWinter/Extreme Sports, The Meridian Hotel/Ibom Golf Resort, Sprite Tripe Slam(a part sport part entertainment event) NBBF DSTV basketball etc shows that newjobs can be created from the sports industry not just soccer alone. This may befrom creating the right laws (now that we have an FOI bill). Take for examplePete Rozelle who was able to get the U.S Senate to put aside its anti trustlaws in order to develop the American football sub sport sector or Gary Davidsonwho was able to successfully run “rebel leagues” against the popular leaguesbecause of the laws created to protect small companies (a case study for theNFF NFA debate).

 

Lets assume the ET orFG buy this argument of sports being a part of the entertainment industry or ifit can stand alone to give it a bigger economy building role.  What should they do next? An inclusion of thesports minister and his counterparts the Minister of Youth Development (BolajiAbdullahi) and Minister of Tourism (Edem Duke) into the ET (or anentertainment/sports sub team).  Next geton board the sub team minds like Segun Odegbami, Kojo Williams, Bash Ali, TunjiAwojobi, John Fashanu, Hakeem Olajuwon (if we are serious, we will get him), Rotimi Pedro, Gurus from the Advertising(Tunji Olugbodi, Jimi Awosika, Kolawole Ayanwale, Biodun Shobanjo, BiodunFagbohun); Communications (Kunle Adeboye, Rasheed Bolarinwa, Kayode Oluwasona);Marketing (Hannah Oyebanjo, Femi Adelusi); Sunday Bada, Falilat Ogukoya, MaryOnyali.  Others are Ben Bruce, RaymondDopesi Nduka Obaigbena, Helen Ajayi, Ruth Osimi, Kingsley Ogwudire (ex HarlemGlobe Trotters entertainment player) Ime Udoka, Jarome Iginla (NHL CalgaryFlames) Patrick Ekeji, Dudu Orumen, Deji Omotoyinbo plus minds from NollywoodFashion & Music (Charlie Boy) industries.

 

It may mean (becausethere are many of them) an annual economic forum on sports/entertainment willbe needed.

 

Which areas of thesports industry can spending be (re)channeled to or new jobs/revenue can becreated? A few are listed below.

 

i. Sports Tourism: A $600bn sector (10% of the total tourism industry).  A call to the CBAAC arm of the Federal Ministry of Tourism…and the NationalInstitute for tourism (NIHOTOUR) revealedthat none of them were aware of the global sports tourism industry [or was theFG economic diversification plan in their own plan]. The hosting of events likethe FIFA/FIBA AFRICA/CAF International Sports Security Summit/InternationalTicketing Association Annual Conference/ISPO Sport Sponsorship Conference/CommonWealth Games/All African Games/Sports Law & Business – IBA regionalConference /HIPHOP International Summit/Sports Accord/Comic InternationalIndustry Conference/Stadium Management Conference/Venue Expo/Sports Award/VenueManagement Association Congress/NBA All Star Weekend are few events we can buyinto if we are ready to do Nx Investment + Ny revenue = profit = money forreinvestment.

 

ii. Sport Security: A +$1bn global industry. It could/can help us addressmany of our security issues as well as open up a new working sector in theeconomy.

iii.Sports Stadium Events/Utility Mgt : May be not in Nigeria but according to RickBurtan; CEO NBL Australia as at 2008 “the thought of (GRASS) growing betweenthe cracks in the years following a major event strikes fear intogovernments.  An event strategy shouldtherefore go hand in had with infrastructure (building) strategy”.  A look at our prides, the Lagos NationalStadium & Abuja in door dome says a lot. We built them for soccer/AllAfrican games but AEG (owners of the staple center used for the Michael Jacksonmemorial/02 Arena in London/ maintenance consultants to the Beijing 2008basketball venue) and the organizers (Dallas Mavericks) of the record breaking+100,000 people 2009/2010 NBA (basketball) All – Star Game in the DallasCowboys Football Stadium show that there is money & taxes to be made inmaintaining & using sports stadium for other events outside sports.  The National Stadiums can hold comfortablymany Jamb/Neco/Waec aspirants and other none sport events

 

iv. Sports(Casual) Footwear; Balls & Merchandise : A +$15bn global industry as at 2005 with Nike holding down 40% market share with its subsidiaries- Jordan-Brand, Converse and Umbro and Han-Cole. 90% of sports footwearproduction is consumer defined and bought for non sport use. The U.S athleticshoe market was at 2002 worth $13bn with 350 mil pairs sold annually. The sports apparel sector is more fragmentedand about 3 times worth that of footwear. Just one sector of the industry (theinner vest moisture-wicking synthetic fabrics) was worth an estimated $416 mn in 2006 but dominated by UnderAmour. Worldwide footwear production exceeded 10bn in 1996 and many of these developingeconomies have started to produce shoes of their own, instead of just producingfor others. ‘Since Nigeria is the second vendor of hip-hop music globally &our having a huge population/unique location to the U.S, the hip-hop sportsfootwear etc sector will be a will be a huge commercial success/job creator butwe might lose it to Ghana/South Africa due to electric power/corruptionproblems’ says the CEO of HOOPHOP eNTERTAINMENT.

 

In Chinaalone Nike employed over 90, 000 workers as at 1996. As at last count therewere over 300 sport casual footwear producers with the typical brand employingjust 90 workers and making less than $100mn annually. We have the population; we have the leather/materials.  Industry analysts estimate the value of theglobal market for sales of licensed merchandise is in excess of +$170 bn per year and sport accounts forabout 11 percent of the global market. Making it easy to import machines (plusstable electric power) and removal of improper taxes or addition of tax heavensfor sector development will create jobs. With cost production going up in manydeveloping economies, Nike et al are desperately looking for markets to produceits shoes.

 

v . Sport Films/Documentary : Another place where sports & entertainment meet. Ihave like many other soccer crazed fans watched the film on the 1st U.S SoccerTeam that beat England but no one is thinking about bringing nostalgia via theAtlanta 96/USA 94 teams.  I have alsowatched Glory Road (the 1st black college team to beat a white team on nationalTV in the eradication of racism in the NCAA but no film on Jay-Jay Okochaâ'sfight against poverty and yet soccer/sports is what holds us together.

 

vi. Celebrity/PlayerLeveraging : Whether new spending for wealth creation or redirecteddiscretionary spending for wealth transfer a close look at our sporting exportsnow (and imports) becomes necessary in bringing investors/sports financialaid/tourist. This is where our leading sports figures – the N878.4 million a year Taiye Taiwo/ N782.4 million a year Mickel Obi etc.come into play.  If Michael Jordan asquoted by Fortune Magazine (June 1998) to have had a “Jordan Effect” on the U.S economy by contributing an estimated $10 bn to their economy. If accordingto Forbes Global Magazine (February 9,2004 p 55 – 57) Lebron James was paid so much cause he was a bargain tomaking over $2 bn to the NBA asidehis deal to Nike (+$12 mn ) andothers who see using him to net in sales profit; if despite David Beckhamspending much of his 2007 debut season in L.A.'s training room, Beckham Year 1was still a resounding success in the boardroom as an extra $13 mn in revenue was made before heeven played; paying for his $5.5 mn salary twice over, what is the Taiwo/Obi/Okocha/Kanu/Ime Udoka ‘gross playerproduct/commercial potential & economic effect to our GDP (or national team)?

 

It is hoped that soonwhether we see sports as part of entertainment or not our Shooting StarsFootball Club(s), Islanders basketball, as well as our HOOPHOP entertainmentcompanies & sports manufacturing/communication will be employing in thethousands if not millions and sit among the +$400 mn No Limit/Bad Boy entertainment / +$510 mn Los Angeles Lakers/ $1.2bn New York Yankees/Manchester Unitedâ's placing us in the first twentyglobal economies from our present 48. It is equally hoped that soon ourfinancial newspapers will truly be doing financial reporting on sport business,instead of what is norm noon.

Ohio Okhai Elakhe (okhai23@yahoo.co.uk; 08062912816) is a Sports/Entertainment & ‘Communications’enthusiast.