Extreme Weather Threatens $2.3trn Global Sports Economy

In the $2.3trn sports economy, where tourism is primarily fuelled by resource-depleting international events like the recently concluded Milano Cortina Games, extreme weather poses a threat to annual revenue growth, reported Reuters.

The sector's growth should be used to maximise social benefits such as reducing public healthcare spending and advancing gender equality.

That entails tackling the threat the industry faces from climate change and nature loss - which it risks exacerbating through its own footprint, Tony Simpson, partner and global sports industry lead at consultancy Oliver Wyman, the report's authors told Reuters.

"Sports has more power than any other sector to drive behaviour because it sees itself as a community asset. And if you're a community asset, you need to act as one," he told Reuters.

Elite sports' $140bn slice of the industry is dwarfed by sports tourism worth $672bn and a sporting goods sector with annual turnover of $612bn, the report prepared for the World Economic Forum showed.

The fastest-expanding segment of the overall tourism industry, sports tourism is forecast to account for 60% of total sports economy revenue increase until 2030.

Participatory sports and sports-driven revenues in sectors such as broadcasting, nutrition, wearable technologies complete the picture of an economy which the report said is set to grow to $3.7trn by 2030 and $8.8trn by 2050.

For the report, Oliver Wyman analysts gathered and cross-checked data from organisations including major leagues, investors, sponsors and the World Federation of the Sporting Goods Industry, Simpson said, adding the project required more than 5,000 hours of work.

Climate Risks Intensify

According to the 2021 Intergovernmental Panel on Climate Change (IPCC) report, human influence has likely increased the chance of compound extreme events since the 1950s, including the frequency of concurrent heatwaves and droughts on the global scale. The IPCC report further warned that changes in extremes continue to become larger with every additional increment of global warming.

A 2023 World Meteorological Organisation report also confirmed that weather-related disasters have risen fivefold over the past 50 years driven by climate change, more extreme weather and improved reporting. This underscores mounting financial exposure for event-dependent sports economies.