Sport Management Studies

Drivers for the Future of Investment in the Sports Industry: Is Economic Growth Effective?

Document Type : Research Paper

Authors

1 PhD student of Physical Education Department, Tabriz Branch, Islamic Azad University, Tabriz, Iran.

2 Department of Physical Education, Tabriz Branch, Islamic Azad University, Tabriz, Iran.

3 Department of Management, Tabriz Branch, Islamic Azad University, Tabriz, Iran.

Abstract
Background and Purpose
The sports industry represents a significant sector within the global economy. Economically, it is increasingly recognized as a key element for national economic recovery and growth in numerous nations (Zhu & Zhao, 2015). The economic value of the sports business continues to grow daily, establishing sports as one of the most lucrative industries worldwide. This economic impact extends across many aspects of sports, including sports tourism, sports-related businesses and facilities, hosting major sporting events, leisure activities, advertising, sports clubs, and the sport itself (Weiss, 2011). Professional sports, in particular, can experience substantial economic growth through the cultivation of creativity, the implementation of innovation, the adoption of long-term planning strategies, and strategic investments in sports-related businesses. By examining and analyzing the economic landscape of sports clubs in developed countries, we find that significant investments in their sports industries ultimately result in considerable profits and substantial job creation within this global money-making sector (Emami, 2022). Sports and leisure activities, therefore, have the potential to exert a considerable influence on a nation’s economy (Luiz & Fadal, 2010). Further research has demonstrated how foreign and international investors, particularly those from America, have been drawn to changes in the way sports clubs are organized and to the increasing trend toward virtual activities within these organizations (Nauright & Ramfjord, 2010).
However, despite this evident potential, the factors that drive investment in the sports business remain underexplored in many contexts. Understanding these factors is crucial for policymakers, sports managers, and investors seeking to capitalize on the economic opportunities presented by the sports industry. This study aims to identify the significant influencing factors on investment in the sports business by determining the impact of economic growth, thereby providing valuable insights for strategic decision-making.
 
Methodology
The goal and nature of the current study are applied, and it is built on cutting-edge analytical and exploratory research techniques that were used in conjunction with both quantitative and qualitative models. The approach to data collection also incorporates both documentary and library research methods. Quantitative data utilized in this study were created quantitatively and through the weighting of Delphi questions, allowing for the structured assessment of expert opinions. Qualitative data were gathered via an open questionnaire, semi-structured interviews, and thorough reviews of relevant documents.
The MICMAC structural analysis approach is one of the interaction analysis methods that uses tables of mutual interactions. Unlike other probabilistic methods, MICMAC is deterministic. Consequently, this method determines the strength and presence of the relationship between two variables rather than calculating the probability of one variable having an effect on another one.
According to the numbers on the questionnaire that are filled out in the form of a matrix, the program determines their relationship and then takes each factor's numerical score into account. The components are then ranked into direct influence and indirect influence based on this score. This method allows for the identification of key factors that both drive and are driven by investment in the sports sector.
 
Results
Based on the research, MICMAC analysis identified twenty-six important aspects as significant influencing factors on investment in the sports business by calculating the impact of economic growth. The graph relating to the degree of direct and indirect effects of the five crucial factors—commercialization, reduction of health care expenses, promotion of public sports, management stability, and level improvement—as well as the variables of investment in the sports sector are also included. These five factors emerged as particularly influential in shaping the investment landscape of the sports industry. Commercialization encompasses the marketing, branding, and revenue-generation activities that drive economic value within sports. The reduction of health care expenses highlights the potential of sports and physical activity to improve public health outcomes, thereby reducing the economic burden on healthcare systems. The promotion of public sports refers to initiatives aimed at increasing participation in sports and physical activity among the general population. Managerial stability underscores the importance of effective leadership, governance, and strategic planning in fostering investor confidence. Finally, skill-level improvement reflects the need for talent development, coaching, and training programs to enhance the quality of sports performance and attract investment.
The analysis of direct and indirect effects allows for a nuanced understanding of how these factors interact and influence investment decisions. Factors with high direct influence exert a strong immediate impact on investment, while those with high indirect influence shape the broader economic and social environment that supports investment in the long term.
 
Discussion
This study has identified the major investment determinants in the sports sector by determining the impact of economic growth, allowing for the determination of primary variables according to the research model and using the opinion of experts in this industry. The research’s findings demonstrated that the five factors of "commercialization, health care cost reduction, promotion of public sports, managerial stability, and skill level improvement" are among the main elements influencing investment in the sports industry by determining the impact of economic growth. The economic, social, and even political indicators of nations are now significantly impacted by the sports business. It is now evident that preparing for any event necessitates adopting a global mindset, and sports are no exception (Nouri Khan Yordi, 2020). These findings demonstrate that sports have a great potential for the development of countries and can enhance the country’s economy in many ways. As Clausen et al. (2018) point out, sports organizations must adapt to the environment that is becoming more complex and competitive. They are forced to become professional, commercialize, and take advantage of the opportunities created in this industry (Nouri Khan Yordi, 2020).
Public sports, also known as sports for everyone, are a significant component of sports that are directly tied to the health and vitality of society and in which many of the fundamental purposes of sports are encapsulated. Unquestionably, the promotion of public sports in society fosters vitality and enjoyment among its citizens and also raises people’s motivation to improve their personal circumstances. Also, because people can effectively interact with one another and interact with one another, this element will lessen the rise in crime in society.
The employed model is a robust theoretical model for identifying investment drivers in the nation’s sports business. Using and putting into practice these aspects can increase the investment made by various industries in national sports and draw in financial resources for national sports. These results are consistent with those of Abdulsalehi et al. (2021) and Jamshidi et al. (2013) in the promotion of public sports. These studies underscore the importance of community-level sports initiatives in fostering social cohesion, improving public health, and stimulating economic activity.
 
Conclusion
This research provides valuable insights into the factors that drive investment in the sports business by quantifying the impact of economic growth. The findings highlight the critical role of commercialization, health care cost reduction, promotion of public sports, managerial stability, and skill-level improvement in attracting investment and fostering economic development within the sports sector. The model presented provides a robust theoretical framework for identifying investment drivers in the nation’s sports business, offering practical guidance for policymakers, sports organizations, and investors. By strategically leveraging these factors, it is possible to increase investment in national sports and draw in financial resources that contribute to the sector's sustainable growth and prosperity.

Keywords

Main Subjects

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Sport Management Studies
Volume 16, Issue 85
May and June 2024
Pages 115-148

  • Receive Date 05 June 2023
  • Revise Date 20 August 2023
  • Accept Date 25 December 2023

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