Investments in major sporting events such as Formula E, Formula One, heavyweight boxing fights and the upcoming 2020 FIFA World Cup will help the Middle East sports industry bounce back quicker than any other region in the world post-pandemic, according to a new report released Sunday.
The PwC Middle East’s Sports Survey predicts that the Middle East industry will actually grow by 8.7 percent over the next three to five years, despite the blows to live events caused by the COVID-19 pandemic.
The survey – quizzing respondents in 50 countries – examined the short and long-term consequences of a crisis unprecedented in the history of modern sport.
The survey takes an in-depth look at the industry in the United Arab Emirates, Saudi Arabia, Bahrain and Qatar. It delves into the rapidly evolving sports ecosystem and highlights the opportunities, with the industry expecting to grow the fastest in our region compared to 50 countries across the world.
It found that strong government support and growing commercial maturity have undoubtedly contributed to raising the Middle East’s profile within sports in recent years.
Examples of world-class sporting events include the annual Formula One Grands Prix in both Abu Dhabi, Bahrain, and now in Jeddah, heavyweight boxing champion Anthony Joshua’s bout in Saudi Arabia, as well as Qatar set to host the 2022 FIFA World Cup.
COVID-19 is accelerating change
Despite the impact of the restrictions imposed to prevent the spread of COVID-19, the results in the region show cause for optimism.
In stark contrast to the global market, for which respondents now expect the annual growth rate to slow to 3 percent over the next three to five years, respondents expect the Middle East to grow by 8.7 percent over the same period. This is mainly because Middle East governments have been active in efforts to diversify their economies with ambitious plans for the sports industry away from natural resources and to create social cohesion Saudi Arabia and the UAE, for example, have spent more than $65 billion on sports development.
In terms of the rebuilding process, some 63 percent of Middle East respondents expect the sports market overall to fully recover by 2022, which is far more optimistic than the global respondents of 42 percent.
Their positive outlook is bolstered by the expectation that public expenditure in the sector will continue.
An E-sports market
Esports is a natural fit for the Middle East, where most of the population is young and internet-savvy, and the climate, especially in GCC countries, is often too hot for outdoor sports. Saudi Arabia ranks among the top 20 countries for games revenue at $716 million, with the UAE generating $313 million and Egypt $287 million. In the PWC survey, respondents ranked esports first equal with football in potential for revenue growth.
On a more positive note, as the pandemic forced people to spend their time indoors; sectors like simulated sports and esports have seen golden opportunities. Thus, esports emerged as the biggest winner of the lockdown period. Many turned to gaming, including sports organizations investing in esports activities to keep audiences engaged. Unsurprisingly, the consumption of simulated sports esports exploded at the heart of the crisis, tripling the number of hours watched.
Rami Nazer, global advisory government and public sector leader at PwC, said: “At a time of unprecedented turbulence for the industry, our survey examines in depth both the short-term and long-term impacts of COVID-19."
"However, our survey highlights the opportunities as the sports industry is expected to grow faster in our region than anywhere else in the world over the next three to five years.”
“The lockdown has maximized the value of sports through digital transformation to engage audiences and keep fans connected. Hence, this opened up opportunities to attract more audiences, business partners and revenue streams."