Revealed: the growing importance of sport to economies in the Gulf

While the growth of the global sports market is expected to slow to 3 percent over the next 3-5 years, dampened by the impact of coronavirus-related restrictions, the Middle East region is forecast to see growth of 8.7 percent over the same period.

The PwC Middle East’s Sports Survey said the industry is set to grow the fastest in the region compared to 50 countries across the world.

It said strong government support and growing commercial maturity have undoubtedly contributed to raising the Middle East’s profile within sports in recent years.

Examples of world-class sporting events include the annual Formula One Grands Prix in both Abu Dhabi, Bahrain, and now in Jeddah, heavyweight boxing champion Anthony Joshua’s bout in Saudi Arabia, as well as Qatar set to host the 2022 FIFA World Cup.

The jump into sports comes as Middle East governments have been active in efforts to diversify their economies with ambitious plans for the sports industry away from natural resources and to create social cohesion.

Gulf Cooperation Council (GCC) member states including Saudi Arabia and the UAE for example, have spent more than $65bn on sports development, PwC said.

Its survey revealed that in terms of the rebuilding process after coronavirus, some 63 percent of Middle East respondents expect the sports market overall to fully recover by 2022, which is far more optimistic than the global respondents of 42 percent.

Their positive outlook is bolstered by the expectation that public expenditure in the sector will continue. However, the survey suggests the sports sector in the Middle East should prioritise its concrete initiatives to accelerate change and that the future of the sector has three key enablers in the years ahead.

These are digital transformation and the creation of digital assets, the growth of esports and ability of sports federations to capitalise on their popularity, and the transformational power of women’s sports within society.

The global survey results showed that sports leaders in the Middle East fully recognise the digital fan experience as a top priority but few organisations have managed to deliver it in a way that allows it to acquire and retain fans sustainably.

PwC said that although the sports industry in the Middle East is at an earlier phase in comparison to its global counterparts when it comes to this subject, there is a strong awareness of the opportunities – digital assets owned by sports organisations are highly rated by our survey respondents as a way to unlock growth in both engagement and revenue.

Esports are video games played competitively, either one-on-one or between teams

The survey said Esports is a natural fit for the Middle East, where most of the population is young and internet-savvy, and the climate, especially in GCC countries, is often too hot for outdoor sports.

Esports are video games played competitively, either one-on-one or between teams, and include both electronic versions of real-life sports such as the popular FIFA game, or action/shooter games such as League of Legends and Call of Duty.

Saudi Arabia ranks among the top 20 countries for games revenue at $716 million, with the UAE generating $313 million and Egypt $287 million.

As the pandemic forced people to spend their time indoors; sectors like simulated sports and Esports have seen golden opportunities.

Most survey respondents believe that in the medium to long-term, simulated sports esports will appeal to a mainstream audience as gaming grows in popularity, products improve, media coverage increases and technology advances.

Rami Nazer, global advisory government and public sector leader at PwC, said: “At a time of unprecedented turbulence for the industry, our sports survey examines in depth both the short-term and long-term impacts of Covid-19. However, our survey highlights the opportunities as the sports industry is expected to grow faster in our region than anywhere else in the world over the next three to five years.”

He added: “The lockdown has maximised the value of sports through digital transformation to engage audiences and keep fans connected. Hence, this opened up opportunities to attract more audiences, business partners and revenue streams. In this increasingly digital landscape, sports leaders will need to prioritise their concrete initiatives to invest and innovate; to make the most of the changes and anticipated growth during this exciting period of transformation.”

Rami Nazer, global advisory government and public sector leader at PwC

The PwC report follows the publication last week of the BCW Ranking of Sports Cities in which Dubai managed to jump up the list and Abu Dhabi and Jeddah were named as cities to watch this year as they make a growing impact on the global sporting map.

Abu Dhabi has been at the forefront of the global UFC movement after holding successful UFC Fight Island events in coronavirus ‘bubbles’ on Yas Island.

Jeddah last year hit the sporting headlines by hosting the Anthony Joshua v Andy Ruiz world heavyweight fight while more recently the city has been added to the Formula 1 calendar for next season.

Globally, New York edged out London and Los Angeles, which ranked second and third, respectively, to take the top spot. Barcelona, a newcomer in the top five this year, ranked fourth, with Paris in fifth position.