Strength of region’s £245m sports economy revealed in new report
The West Midlands’ £245m sport economy can continue to bring prosperity to the region and create more jobs if the Government invests more money in women’s elite sport and supports green initiatives amongst clubs, says a new report published today.
The joint ‘Competing for Growth’ report by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr) has been produced to highlight the role of the sports economy in UK.
According to the latest data, total sport related GVA in Birmingham, Solihull, Wolverhampton and Coventry in 2020 stood at £244.7m and accounted for 8,985 jobs. The report also placed Wolverhampton in the top three for the percentage of sports GVA as a share of the city’s economy.
The report highlights the impact that Covid had on the local economies and reveals that the size of the sport economy in Birmingham contracted by 25.8% in 2020 compared to 2019. Coventry’s sport sector economy reduced year-on-year by 12.3%, while Wolverhampton’s reduced in size by 21.1%.
Solihull was the worst affected in the region as its economy in the sector reduced in size by 30.1% is result of the Covid lowdown.
To maximise the potential of the UK’s sports economy the report makes three recommendations to Government in the following three areas:
Financial sustainability – Legislate for a new independent regulator for English Football
Women’s Sport – Unlock funding to support the further growth of women’s professional sport including Women’s Super League
Climate change – Provide funding and guidelines for green objectives for sports clubs
In April 2022 a fan-led review of football governance was published. Amongst its 10 recommendations was a new independent regulator for English Football – rather than regulation from the leagues themselves and associations such as UEFA and the FA.
The regulator’s main objective would be to focus on financial sustainability, with the goal of protecting fans and local communities. The Government said at the time it would legislate and publish a White Paper this summer, but so far this hasn’t emerged.
Thomas Barnard, partner and national head of Irwin Mitchell’s sports sector team, said: “Sport, and particularly football, plays a huge part in the economies of the West Midlands. Our report found a positive relationship between the number of teams in high-tier sports leagues and a city’s level of sports GVA and it was no surprise that the region is a hotspot for sport related economic activity.
“The Government’s fan-led review of football governance prompted recommendations for a new independent regulator for English Football. This would involve clubs having a license to operate and this license would be conditional on assessments of finances, fan engagement, protecting club heritage and corporate governance. A suggestion from the report includes ‘real time finance monitoring’ which would require constant up-to-date data on clubs to clarify their financial situation. This would ensure liquidity and reserve requirements are met and early signs of financial instability could be identified before they become a detriment to the club, the fans and ultimately the local economy.
“The government accepted or supported all10 recommendations included and agreed to legislate and bring forward a White Paper during the Summer. We look forward to seeing it soon as the Government says it’s committed to making football more financially sustainable.”