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WHERE KNOWLEDGE IS POWER Phil Ruthven, Chairman Sporting Future 2013 Melbourne Convention Centre 11 April 2013 Mega trends The Challenges and Opportunities.

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Presentation on theme: "WHERE KNOWLEDGE IS POWER Phil Ruthven, Chairman Sporting Future 2013 Melbourne Convention Centre 11 April 2013 Mega trends The Challenges and Opportunities."— Presentation transcript:

1 WHERE KNOWLEDGE IS POWER Phil Ruthven, Chairman Sporting Future 2013 Melbourne Convention Centre 11 April 2013 Mega trends The Challenges and Opportunities Facing Sport in The Future

2 Topics 1. The Role Of Sport 2. Australia in the 21 st Century 3. Sport Participation 4. Money in Sport 5. Household Spending on Sport 6. So?

3 1. The Role Of Sport

4 The Many Faces Of Sport  Sport encourages health and fitness  It builds relationships and team spirit  It can transcend race, religion, class and income  It nowadays transcends physical disabilities  It is an opportunity for philanthropy and volunteerism  It builds international understanding & friendships  It encourages competition (personal, inter-personal, inter-team)  It replaces wars and conflicts, with peace (as does trade)  It is fun in its many forms  It is an activity that can pick up the disadvantaged  For several hundred thousands it is a career & income

5 Sport is Big Business in Australia  Over 500, 000 participate in the inputs, activities (including volunteerism), socialising and derivatives (betting, media etc) of sport, over and above the direct participation of sportspeople, exercisers and spectators.  Revenue in 2012/13 is forecast to be $49.7 billion (or $66.3 billion with an imputed value for volunteerism). This will be 1.2% of the nation’s $4.3 trillion revenue and the value added contribution will be 2.0% of the nation’s $1.5 trillion GDP  Growth is forecast at around 2.7% pa over the 5 years to

6 Some of the big players (revenue based)  Tabcorp $ 1.6 billion  Tatts Group$ 0.7 billion  WATAB$ 0.3 billion  AFL$ 0.5 billion  ASC$ 0.4 billion  Cricket Australia$ 0.2 billion  Tennis Australia <$ 0.2 billion  NRL <$ 0.2 billion

7 2. Australia In The 21 st Century

8 Some Economic Perspective

9 World’s 30 Largest Economies 2012 (E) World’s 228 nations US$ 82.8 trillion Mexico2.1% S. Korea2.0% Canada1.7% Spain1.7% Indonesia1.5% Turkey1.3% Australia 1.2% 17th Iran1.2% Taiwan1.1% Poland1.0% UK Germany 3.8% 11 th – 20 th Nations 14.9 % Brazil 15.4% China Italy France Russia 18.8% USA Purchasing Power Parity (PPP) terms India Rest of World (200 nations) 15.1% Japan 5.5% 3.0% 2.9% 2.8% 2.7% 2.2% 5.8% th Nations 7.1% IMF/IBISWorld 23/08/12 Argentina0.9% Netherlands0.9% Saudi Arabia0.9% Thailand0.8% S. Africa0.7% Egypt0.6% Pakistan 0.6% Colombia0.6% Malaysia0.6% Nigeria0.5%

10 Australian Index of Consumer Sentiment 2 months progressive to March 2013 Source: Westpac-Melbourne Institute (IAESR), IBIS estimates 13/03/13 Recession Level Happy 65% of last 40 years 73% of last 20 years

11 USA Index of Consumer Sentiment 2 months progressive to March 2013 Recession Level Source: Conference Board Consumer Confidence Index Happy 42% of last 33 years

12 UK Index of Consumer Sentiment 2 months progressive to February 2012 Recession Level OECD EC Indicator

13 NZ Index of Consumer Sentiment 2 months progressive to January 2013 Recession Level Source: Roy Morgan ResearchIBIS estimates

14 The World’s Economic Regions In 2012 Share of World GDP (ppp basis) 2012 World GDP, $US 82.8 trillion C&S America 6.6% North America 22.5% W&C Europe 20.7% Eastern Europe 4.0% Asia Pacific 29.7% Africa 4.0% ME 5.5% Indian S-C 7.0% IMF/IBISWorld 29/09/12

15 Global Change  As 2010 began:  the Asia Century had arrived (Asia Pacific + Indian subcontinent), supplanting the size of the USA that had supplanted the British Empire a century earlier  By 2016:  India has overtaken Japan’s economy (in 2012!);  China has overtaken the USA.  Brazil has overtaken the UK and French economies  Mexico and South Korea have overtaken Italy  Indonesia overtakes Australia (in 2012), Canada, Spain  By 2025, or earlier:  The Asia Pacific region is not only bigger than North America (USA, Canada, Mexico) and W&C Europe (mainly the EU) as it is already, but is bigger than both of them

16 Asia Pacific Region GDP ppp terms 2012 *Korea 6.8 % Australia 3.9% Singapore 1.3% Vietnam 1.3% NZ 0.5% Myanmar 0.4% Cambodia 0.1% Laos 0.1% PNG 0.1% Other 0.1% 50.4% China Japan 18.7% Philippines 1.7% HK 1.5% Taiwan 3.7% Indonesia 4.9% Malaysia 1.9% Others 3.9% * North Korea 0.2% South Korea 6.6% 25+ nations $US 24.6 trillion GDP (ppp terms) Thailand 2.6% Wikipedia/IBISWorld 29/09/12

17 Australia’s Economic Growth Annual real GDP growth (%) progressed in quarters to December 2012 (and forecast to September 2018) 36 qtrs. 34 qtrs 34 qtrs 33 qtrs 38 qtrs 33 qtrs? 36 qtrs ? Source: IBISWorld: 08/03/13 Average long business cycle is 34 quarters (8 1 / 2 years) Years, ended June Forecast

18 Australia’s Standard Of Living Growth GDP F2011 constant prices SOL (2011 prices, $’000 Industrial Age Hunting Age Agrarian Age Infotronics Age Industrial Age Year, ended June IBISWorld 09/10/12 Manufacturing, Construction and Utilities (electricity, gas & water) dominate Agriculture Mining, Banking, Commerce Service industries and IC&T Hunting, trapping, fishing, crafts, religion Enlightened Age Imbedded intelligence, Neural network programs More electronic “guardian angels” New technologies

19 Importance of Industries Shares of GDP by Industry Division, Agriculture Mining Manufacturing Utilities Construction W’Sale Trade Retail Trade Transport, Postal Media & Telecom Finance & Insurance Rental, Hiring. R Estate Dwelling O’Ship Prof & Tech Services Admin Services Public Admin/Safety Ind taxes less subsidies Education Hospitality Health & Social Assist Arts & Recreation Personal & Other Serv Primary Sector Secondary Sector Tertiary Sector Quaternary Sector Quinary Sector

20 Some Social Perspective

21 Our Changing Society  Living longer  More living in coastal cities  More generations co-existing  Changing household structures  Smaller households  Changing ethnic mix (Eurasian)  New tribalism (less local)  A stabilising divorce rate  Fast rising incomes & wealth  Apartment living rising  Home leasing on the rise  More spending on services  Outsourcing tasks and chores  Rise of virtual shopping  Living with leisure  Living with ICT  Increasing knowledge  Increasing financial literacy  New entertainment & sports  Electronic “guardian angels”  Working differently  New industries/ occupations  Changing spirituality  Outlawing discrimination  Changing politics (ideologies)  Ecological sensitivity

22 Australian Population Forecasts (IBISWorld) Million Year, ended June

23 Australia’s Broad Geographic Shift % of total (F) 32% 19 % 25 % Source: ABS & IBISWorld 4% 5% 64 % 7 % 66 % Coastal Capital Cities Rural (cities >30,000 ) Rural (towns & shires) 5 % 12% 61 %

24 Living Longer Life Expectancy And The Retirement Age of Male Australians Source: ABS, Australian Historical Statistics, IBISWorld Rising Formal Education Rising Retirement Age Who would want to be retired for 30+ years in 2100; and could the nation afford it? Female life expectancy

25 Australia’s Age Distribution Source: ABS B Projections 10/03/

26 Our many Generations In F million persons “spoilt rottens” Federation (>87 years) Gen Zers (<11years ) Net Generation (Y) years Silents years Baby Boomers years Generation X 31—46 years 27.1% 8.0% 14.1% 1.2% “free-rangers” “quiet achievers” “old fashioneds” IBISWorld 09/06/ % 22.2% Generational Types Civics Adaptives Idealists Reactives “the thoughtfuls”

27 3. Sport Participation

28 Work And Leisure Over Time Year born Leisure Time Education Sleep Unpaid work Travel to work PaId work 46% 44% 43% 32% 29% 27% 23% 19.8%15.6% 12.4% 10.4% 9.1% 23.7%21.8%

29 IBISWorld 25/01/12 Leisure & Recreation Sleeping 34.7% Social Interaction Other 16.7% Hygiene & Health Care Eating & Drinking Child care Australians’ Time Expenditure Adults, working week 5.4% 1.7% Shopping Education 1.3% 1.9% Volunteer work 0.8% 2.5% Travel to work 1%

30 Sport & Physical Recreation Participation By Age Group Age cohort 48.2% 61.0% 64.2% 65.1% 68.7% 69.5% 79.1%

31 Type of Activity (15+ aged Australians) Source: ABS 12/06/12 Males Females

32 Important Participation Trends CSIRO Sports Megatrends Report  Personalised sport for health and fitness  Market pressures and new business models  The rise of lifestyle sports  Economic growth and Asian sports development  Overseas health, community and aid objectives  Demographic, generational and cultural change

33 4. Money In Sport

34 The Australian Sport Market Without volunteerism F 2013 (F) Source: IBISWorld 04/04/13 $49.7 billion (1.2% of nation’s $4.25 trillion revenue. Value added: 2.0% of GDP) Social 30.0% 45.3% Inputs 14.3% Sport Activity Derivatives 10.4% Education Health Commerce: wholesaling retailing transport Betting Media Conferences Sporting clubs Clubs (licensed) Racing (horses/dogs) Amusement parks Nature reserves Facilities Supplies equipment manufacturing, construction Administration Coaching Fitness Centres

35 Australian Sport Inputs Share of total basis F2013 (F) IBISWorld 29/03/13 Horse farming 4.0% Revenue $ 22.5 billion Retail Sports Clothing 6.7 % 8.5% Wholesale Sports Equipment 7.1% Boat Manufactg (and repairs) Sports Travel Fares 9.3% Retail Marine Equipment Sports Education 2.7% 2.7% Sports Medicine Sports Transport (Private) 7.7% Recreation Construction 14.2% 2.4% Sports Equipment Manufacture Retail Sports & Camping Equipment 18.7% 13.3% 1.6%

36 Australian Sport Activity Without Volunteers F 2013 (F) Source: IBISWorld 03/04/13 Revenue $ 7.11 billion Administration 49.3% 70.0% Coaching 18.3% Fitness Centres Cricket 7.3% Facilities & Venues 24% 5.3% Football 3.7% Tennis 2.3% Indoor Golf 1.7% Ski Lifts 1.3% Other 2.4%

37 Australian Sport Socialising F 2013 (F) Source: IBISWorld 28/03/13 Revenue $ 15.0 billion Sport Clubs Licensed Sporting Clubs Nature Reserves & Parks 51.1% Horse & Dog Racing 13.4% 19.4% 12.0% Amusement Parks 4.1%

38 Australian Sport Derivatives F 2013 (F) Source: IBISWorld 28/03/13 Revenue $ 5.2 billion Sports Betting Conferences/ Exhibitions 5.8% 64.0% Print (news/mags) 16.1% TV (FTA & Pay) 11.8% Radio 2.3% Sports Media 30.2%

39 Adding an imputed volunteerism value

40 The Australian Sport Market F 2013 (F) Source: IBISWorld 02/04/13 $66.3 billion (1.6% of nation’s $4.25 trillion revenue. Value added: 2.4% of GDP) Social 22.6% 33.9% Inputs 35.7% Sport Activity Derivatives 7.8% Education Health Commerce: wholesaling retailing transport Betting Media Conferences Sporting clubs Clubs (licensed) Racing (horses/dogs) Amusement parks Nature reserves Facilities Administration Coaching Fitness Centres Volunteerism Supplies equipment manufacturing, construction 70% Volunteerism (imputed wages value)

41 Australian Sport Activity F 2013 (F) Source: IBISWorld 28/03/13 Revenue $ 23.7 billion Facilities 7.2% Volunteerism (imputed) Administration 14.8% 70.0% Cricket 2.2% Football 1.6% Tennis 1.1% Indoor 0.7% Golf 0.5% Other 0.5% Ski Lifts 0.4% Fitness Centres 5.5% Coaching 2.5%

42 5. Household Spending On Sport

43 $ 1287 billion ($ per household) H’Hold durables 2.8% Motor vehicles 1.8% Other 0.7% Capital Related 16.3% Non-durables 5.4% Durables Taxes (& social contributions) 4.4% 14.0% Depreciation 5.9% Dwell/Propty Interest 5.3% Consumer Debt Int 0.8% Unincorp. Interest 0.6% Transfers 0.5% Australian Household Expenditure Year to December 2012 Hospitality Rent % 13.1% Food 6.4% Alc.& Tobacco2.2% Clothing 2.0% Utilities1.7% Veh. Operation 3.0 % Other 1.0% Education 3.5% Other Services Communicns.1.5% Fares2.0% Fin. & Ins. Serv. 7.6% 6.5% Health Note: 1 includes imputed rent (home ownership) Source: ABS5206/IBISWorld 2.8% Mobility Savings 7.2% (& other dwelling costs) 3.9% 2.3% Entertainment (Gambling 3.4%)

44 Changing Household Expenditure % of total basis $ billions Taxes (direct) Non-durables Durables Health & Education Hospitality Entertainment/Recn Communications / fares Other services Rent Finance & Ins Serv Capital Related Savings

45 Household Outsourcing In The New Age 1 F2012 (E) $292 billion $33,020 per Household ( $633 per week) Source: IBISWorld 09/10/ % 11.0% Meals Entertainment & Recreation Other 2 2.4% 12.7% Tourism Financial 23.3% Services Health Services 11.9% Child Care 3.4% Maintenance/Cleaning 3.5% Note: 1 Spending on services, new since 1965 Hair/beauty 1.4% Entertainment Recreation Gambling Clubs Transport Accommodation Miscellaneous Legal Services 1.4% Note: 2 Baby sitting, Pre-school education M/V hire and maintenance, gardening and many others

46 Household Spending On Sport Share of Total (%), by Quintile, F2012 (E) Source:IBISWorld 11/06/12 H’Hold Net Gross Total Sport Fitness Spectating Number Wealth Income Sport Eqpt. & Health Fees Richest Well Off Middle Struggle Poorest

47 6. So?

48 Some of the Challenges  As this Century unfolds, how do we maintain creativity in sporting products and their delivery?  How do we, incentivise and individualise sport to an increasingly ageing, sometimes indifferent and pluralistic society?  How do we reach the low income or otherwise disadvantaged segments of our society with adequate sport, exercise and fitness?  What should Australia’s role be in the Asia Pacific to promote sport and its individual, social and international benefits?

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