Brazil sport focus

Sport Business News

Although Brazil and Rio de Janeiro's successful bids to host the 2014 FIFA World Cup and 2016 Summer Olympics respectively have caused a massive change in the country's sports market, the pre–World Cup and Games situation was quite different and provides a telling picture of just how much work and preparation is required over the coming years.

In 2006 the Ipsos Marplan Institute (www. ipsos. com. br), on behalf of Brazils number one pay television network SporTV, completed a comprehensive, 10 month study of the Brazilian sport market. Called Dossiì Esporte, the study is based on a wide range of research including government, academic and industry findings and interviews of more than 2, 300 Brazilians in nine state capitals. The study is considered one of the best reference points for sport industry information currently available in Brazil. Key figures from the study include:– Economic value of Brazilian sport industry (incorporating all sporting activities and all production, business and services related to sport) in 2005 = $15. 6bn = 1. 95% of GNP– 91% from the private sector and 9% from the public sector– Prediction for 2010 = $28bn– Between 1995 and 2005 the sport sector grew at a rate 7. 42% greater than Brazil's GNP growth rate. – The number of formally registered jobs linked to the sport industry jumped from 245, 184 n 1995 to 315, 006 in 2005. – Brazilians spend 1. 75% of their income on sport, or $42. 39 per year, whereas Americans spend $551 or 1. 9% of their income. Australians spend $138 or 0, 9%. (Source: Institutional Business, International Consultancy (www. ibci. com. br)) The study also reveals that although the Brazilian federal government has taken a much stronger position on sport industry investment since the mid 1980s, the total is still very low compared to top spending countries the US, the UK and France. While in 2004 the latter countries spent 1. 6%, 1. 8% and 1. 9% respectively of federal revenue on sport, Brazil's equivalent was just 0. 087% ($192m). Brazilian state and city government spending on sport is also very low, with an average of just 0. 9% of financial resources spent on sport for the 26 states and the federal district, while the 5, 567 Brazilian municipalities spend on average 0. 96% (2003 figures), with the 400 biggest municipalities receiving over two thirds of the public funding for sport. The report explains that Brazil's government has historically viewed sport in two categories, elite/middle class, practiced mainly in private schools and sport clubs, and low income sport, utilising the modest resources and sport facilities of public schools and equally modest public sporting facilities funded by the three tiers of government. The city council level of government accounts for the greatest presence of government in sport in Brazil, with rich states and macro–regions providing significantly more resources for sport than their poorer cousins. Overall, the DossiÉ Esporte report make a strong point that sport receives an insufficient amount of public funding in Brazil, particularly given the proven social and economic advantages associated with investment in sport. It also highlights the heavy cost of a burdensome bureaucracy in Brazilian sport spending, which sees more than half of the public funding for sport lost on administrative functions and support services. For example, in 2004 53% of the spending by the federal ministry of sport was on personnel, management and administrative support, social security and other costs, leaving just 47% for direct investment in sport programs. In comparison, countries such as the US, Australia and NZ work off a breakdown closer to 20% administration costs and 80% on direct investments in sport. In terms of the all important area of private sector involvement, with Brazilian sport not yet reaching the levels of professionalism and administrative rigour as in more developed markets, it is often difficult to find specific information, key numbers from recent years include:– Total Sport Sponsorship 2008 – R328, 460, 000 (approx $200m) (Brazilian Institute of Sports Marketing)– Estimates of private sector sports marketing investments (sport promotions, events and sponsorships combined) in 2007 = $1. 25bn (10% increase on 2006) – Overall, according to a report by Deloitte in 2008, Brazilian sporting competitions generate just R901m – the main US sport leagues combined generate around R31bn– The sports equipment and clothing sector in Brazil turns over around $4bn per year, according to the American Chamber of Commerce, but could triple or quadruple over the next five years. In key examples, each year more than 85m pairs of sport shoes and 6m footballs are sold. – According to the Clube dos 13 (which represents the 20 biggest Brazilian football clubs and negotiates with the Brazilian Football Confederation in relation to the premier league and broadcast rights), the value of broadcast rights for the Brazilian football championship, the `Brasileiráo, grew from $55m in 1998 to $88m in 2003 to $143m in 2006. In 2008, the organisation re–signed with Brazils biggest network, TV Globo, for the 2009, 2010 e 2011, for $700m, with some adjustments to be made. About Simon TarmoA journalist from Sydney, Australia, and co–founder of industry journal Australian Sponsorship News, Simon Tarmo now lives in Belo Horizonte, Brazil. Having worked on a range of writing, research and trade projects across a number of industries including sport, entertainment and wine, he is currently focusing on business opportunities involving the 2014 World Cup and Rio 2016 in Brazil. With fluent Portuguese language skills, he has an extensive network of contacts throughout Brazil and can advise and assist foreign groups doing business in the country. More details http://simontarmo. blogspot. com/ ~ Simon Tarmo+55 31 9196 0069simon@pando. com. auhttp://simontarmo. blogspot. com/

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