1. The Size of the Sports Industry in the United States
Jane E. Ruseski
University of Alberta
Department of Economics
Brad R. Humphreys
University of Alberta
Department of Economics
IASE 10th Annual Conference
10 May 2008
Gijón, Spain

2. Organization of Presentation
Motivation
Definition / Data Sources
Estimates of Size of Sports Industry
Sports participation
Sports viewing
Economic Value - Demand Side
Economic Value - Supply Side

3. Motivation
Few estimates of the total economic scope of the sports industry
Studies estimate the contribution of sport to the local economy
Many studies estimate the economic impact of sporting events
Document the economic scope of sport in the US from a macroeconomic perspective
Focus on US for convenience and access to data

4. Definition of Sports Industry
Three primary components
Individual participation in sport
Attendance at spectator sporting events
Following spectator sporting events through media – newspaper, television, internet
Why these three components?
Encompasses active and passive participation in sports
Both aspects are important in trying to estimate the size and scope of the industry

5. Challenges
Estimating economic value and extent of participation proved to be challenging
Unlike other industries, such as the hotel industry, there is no commonly accepted definition of the sports industry for measuring economic performance
Solutions
develop a working definition of the sports industry
use a variety of data sources, construct estimates from both supply and demand side

6. Data Sources Data Source Active Participation Inactive Participation
Economic Value: Supply Side
Economic Value: Demand Side
NSGA – 2005 ▲
▲ - tv
▲ - revenues
▲ - spending
BRFSS – 2000
Vital Statistics of US – 2005
▲ -multimedia
Statistical Abstract of US – 2005
▲ - internet
US Census – 2002
Datamonitor – 2005
US BEA – 2005
▲ - admissions
US CEX – 2005
▲ - consumer spending

7. Active Participation in Sport
Sport or Activity
Number of Participants
% of Total
Walking
87,500,000
18.1%
Swimming
56,500,000
11.7%
Bowling
44,800,000
9.3%
Health Club Memb
37,000,000
7.6%
Bicycling
35,600,000
7.4%
Weightlifting
32,900,000
6.8%
Running/Jogging
29,200,000
6.0%
Basketball
26,700,000
5.5%
Golf
24,400,000
5.0%
Includes frequent and infrequent participation in sport

8. Active Participation in Sport
Lower bound
Mean
Upper Bound
Walking
68,600,000
69,301,784
70,000,000
Running/Jogging
12,500,000
12,901,119
13,300,000
Weightlifting
7,118,775
7,396,304
7,673,832
Golf
4,787,312
4,982,688
5,178,063
Bicycling
4,588,754
4,791,467
4,994,179
Aerobics
4,189,563
4,355,448
4,521,333
Basketball
3,276,901
3,461,372
3,645,844
Health Club
2,375,871
2,510,246
2,644,621
Swimming
2,216,229
2,356,134
2,496,039
Total
118,481,056
122,094,722
125,702,581

9. Inactive Participation - Attendance
Total attendance just over 277 million
Estimate of opportunity cost, based on average wage of $18 per hour ≈ $19.9 billion in 2005 or 0.25% of $8.2 trillion of personal spending
In addition to opportunity cost of time, other economic activity associated with tickets, parking, concessions, etc.
Table 3: Estimated Total Attendance at Sports Events, NGSA 2005 –
Sports with at least 2 million in Attendance
Sport
Total Attendance
Major League Baseball
74,385,100
NCAA Football
43,486,574
NCAA Men's Basketball
30,568,645
National Basketball Association
21,369,078
National Hockey League (2004)
19,854,841
National Football League
17,011,986
Minor League Baseball
15,636,000
NASCAR Winston Cup Series
6,300,000
Minor League Hockey
6,179,000
Horse Racing
5,979,000
Professional Rodeo
5,429,000
NASCAR Busch Series
3,911,000
Professional Golfers Association
3,200,000
Arena Football League
2,939,000
Major League Soccer
2,900,715
Minor League Basketball
2,625,000

10. Inactive Participation: Television Viewing
Table 4: Estimated Total Television Viewing Audiences, 2005
At Least 4% of Audience
Sport
TV Audience
National Football League
105,874,000
Major League Baseball
76,744,000
National Basketball Association
60,877,000
NASCAR Winston Cup Series
45,588,000
Professional Golfers Association
37,899,000
NASCAR Busch Series
27,981,000
Professional Tennis
26,187,000
Horse Racing
21,560,000
IndyCar Racing
19,366,000
Source: National Sporting Goods Association (NSGA)
Relatively large viewing audience for tennis, horse racing, golf → may reflect popularity of major events in these sports
Limitation – have no idea of intensity of viewing

11. Economic Value: Supply Side – Economic Census Data
Table 5: Summary Statistics for Firms in the Sports Industry, 2002
Sub-Industry
NAICS Code
# Estab.
Employees
Revenues (mil)
Payroll (mil)
Spectator Sports Teams
711211
674
40,746
$13,025
$9,106
Racetracks
711212
646
47,121
$6,702
$995
Other Spectator Sports
711219
2,752
19,860
$2,585
$664
Golf Courses
71391
12,261
312,812
$17,533
$6,656
Skiing Facilities
71392
387
70,083
$1,801
$631
Fitness/Rec. Centers
71394
25,290
445,508
$14,987
$4,953
Bowling Centers
71399
4,924
82,010
$3,074
$904
Sporting/ Athl. Gds. Mfg.
33992
2,235
62,166
$11,855
$2,075

12. Economic Value – Demand Side
Table 10: Consumer Spending on Selected Sports Items
Item
Total Spending
Sports Equipment
16,539,200,000
Sports Apparel
10,898,000,000
Sports Footwear
15,719,000,000
Admission Spectator Sporting Events
15,900,000,000
Total consumer spending = $43,172,100,000
Active participation spending is 63.6% of total spending
Consumer spending on sport is less than 1% of consumer expenditures → roughly equal to spending on gas or 1/9th of personal spending on health care

13. Economic Value: Demand Side
Sport Related Expenditure, Consumer Expenditure Survey, 2005
Category
Spending
Estimated Total Spending on Sports Equipment, billions of dollars
$2.294
Estimated Total Spending on Spectator Sports, billions of dollars (attendance)
$1.226
Estimated Total Spending on Sports, billions of dollars (participation – membership dues, admission fees)
$3.245
Estimated total spending = $6.77 billion → active participation is 81.8% of total based on CEX data

14. Economic Value – Summary of Estimates
Table 13: Estimated Total Economic Value of Sports Industry, Billions of 2005 Dollars
Component
Supply Side
Demand Side
Estimate 1
Estimate 2
Estimate 3
Estimate 4
Participation
Equipmenta
$7.5
$16.4
$16.54
$2.29
Footwearb
$31.4
$10.90
Apparelc
$5.5
$15.70
Feesd
$16.6
$3.25
Participation Subtotal
$61.00
$69.90
$46.38
$32.14
Spectatinge
$6.3
$15.90
$1.22
Mediatedf
$5.65
Total
$72.95
$81.85
$62.28
$35.65

15. Summary of Estimates
Difference in supply side estimates → value of sports equipment produced and sold
NSGA estimate is $7.5 billion
Datamonitor estimates is $16.4 billion.
Difference could be due to different definitions of sports equipment, survey methods or survey samples
Difference in demand side estimates
Estimates of consumer purchases of sports equipment generated by Datamonitor and the Consumer Expenditure Survey → CEX includes only household spending while Datamonitor includes household, business and institutional spending
Estimates of spending on attending spectator sports generated by the Bureau of Economic Analysis Current Business Survey and the Consumer Expenditure Survey → not clear what explains difference