The global sports economy is at risk from climate shocks, and new research is shining a light on growing threats to this $2.3 trillion industry, which relies heavily on sports tourism and major international events. A report from consultancy Oliver Wyman, prepared for the World Economic Forum, points out that climate change and environmental damage threaten to upend revenue growth, not just for pro sports, but for tourism, manufacturing, and even local community activities.

A $2.3 Trillion Industry Facing Climate Pressure

The sports industry is currently valued at $2.3 trillion and is expected to reach $3.7 trillion by 2030 and $8.8 trillion by 2050. The sports industry generates $140 billion from elite sports, while sports tourism generates $672 billion annually, and on the other hand, the sporting goods industry generates an additional $612 billion annually.

Sports tourism is expected to contribute 60% of the revenue growth of the sports industry by 2030. However, the industry risks losing more than $500 billion in revenue by the end of the decade due to climate change.

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Extreme Weather Disrupting Events and Revenues

Climate change is affecting sports activities worldwide due to heatwaves, floods, pollution, and the loss of snow cover. Sports activities contribute more than 90% of revenues from media rights and 76% of revenues from sponsorships, which are the two main sources of revenue for sports activities.

Media companies are factoring extreme weather conditions into sports contracts due to the risks of cancellations that might affect revenue from advertisements. For instance, France was affected by severe heatwaves before the 2023 Tour de France event. Athletes had to train and compete in extreme weather conditions, which might affect their performance.

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Turning Zero Growth and Profit Into Social Benefits

An example of this is Standard Chartered’s sponsorship of Liverpool FC, which has funded women’s and girls’ community initiatives and will introduce recycling programmes in their various communities. There is an opportunity for the industry to meet the growing demands of stakeholders to demonstrate accountability and sustainable practices while aligning commercial incentives with environmental responsibility.

The global sports economy is at risk from climate shocks, and not simply a warning of the consequences; it is a call to action. Given the potential loss of billions of dollars in revenue and growing uncertainties in the environment, only a commitment to sustainable practices will preserve the future viability of the sports industry while maximising its broader social impact.

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