By many yardsticks, 2015 must go down as a pretty rotten year for sport. The crises at FIFA and the International Association of Athletics Federations (IAAF) have put doping and governance issues squarely at the top of the movement’s agenda, highlighting how it has struggled to cope with the full consequences of the financial windfall which the digital media era has delivered.
The cause of autonomy has taken several large backward steps.
Sustained financial pressures and the international terrorist threat have combined to make many people, particularly in the liberal west, reluctant for the powers-that-be in their particular jurisdictions to commit to the inconvenience and expense of hosting sporting mega-events.
And yet there is at least one measure which, viewed in isolation, might lead you to conclude that 2015 was a vintage year for the sports industry: this is the share price performance of both Nike and Adidas, the leading sports footwear and equipment companies.
When I checked on Thursday evening, shares in Nike, based on the US west coast, looked to have ended 2015 at $62.51. That represented a gain for the year of more than 29%, giving the group a market capitalisation of well over $100 billion.
Germany’s Adidas, though smaller with a market capitalisation of some €18 billion, fared even better. Its end-of-year share price of €89.91 was more than 55% higher than it had started 2015.
What should we make of this?
One conclusion might be that, for all the problems facing sport, the market retains confidence in its status as a leading leisure activity – and in Nike and Adidas’s continued ability to derive profit from this – notwithstanding much-voiced concerns over how keyboards and video screens are seducing young people away from sports halls, pools and playing fields.
Perhaps the enormous scale of the expansion now foreseen for China, the world’s most populous nation, is part of what is underpinning this positivity, as we embark on a Summer Olympic year. As I reported in 2015, it is estimated, according to guidelines issued by the State Council, that the sports market in China will be worth about $790 billion in 2025. This compares with just $63 billion in 2014.
While this vast country has its own sports goods industry, and while we are only talking about an estimate, the projected growth is so explosive that it would be very strange if leading western sports equipment groups failed to derive some sort of benefit in coming years.
That Chinese forecast has certainly come at a good time, appearing to offset reduced expectations in a range of countries dependent on hydrocarbons for their prosperity, not least Russia, the 2018 FIFA World Cup host.
As for what 2016 will bring, for sports goods company shareholders and the rest of us, it is hard to foretell, but with the holidays over, it is time to strap on seat-belts and get ready for an eventful year.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938.