The global sports industry faces a daunting challenge as climate change threatens its economic foundation. With annual revenues currently at approximately US$2.3 trillion, the sector could see potential losses of up to US$1.6 trillion by 2050, according to a report by Oliver Wyman and the World Economic Forum (WEF). Though sports revenues are projected to grow to US$3.7 trillion by 2030 and US$8.8 trillion by 2050, escalating climate impacts may reduce annual earnings by as much as US$517 billion by 2030.
Heat stress emerges as the predominant physical risk, jeopardizing the safety of competitions and impacting broadcast rights, sponsorships, and ticket sales. The rising temperatures necessitate rescheduling or even canceling events, disrupting one of the fastest-growing economic sectors. Such climate-induced challenges extend beyond global events, affecting local leagues and amateur sports by threatening essential infrastructure like stadiums and transport systems.
In addition to jeopardizing athlete health, climate change disrupts the sports industry’s production and distribution chains. The costs of sporting goods are rising due to raw material volatility and logistical challenges. Environmental degradation, including biodiversity loss and water scarcity, further constricts the viability of outdoor sports, especially in urban areas.
Winter Sports Face Significant Threats
Winter sports are particularly vulnerable, with the WEF estimating only 10 countries will have adequate snow reliability for the Winter Olympics by 2040. A study highlighted that of the 21 past Winter Games locations, only four may remain feasible by mid-century if severe warming continues. In Europe, where winter tourism is a major economic driver, up to 98% of ski resorts could become unviable under extreme warming scenarios.
While artificial snowmaking offers a temporary solution, its high costs and environmental impact limit its effectiveness. François Hugues from France’s National Institute for Agriculture, Food and the Environment emphasizes the need for resorts to adapt business models in response to global warming.
Despite these risks, the sports economy continues to flourish, with sports tourism leading the charge. Generating about US$2 trillion annually, the sector’s growth is bolstered by emerging markets and the increased popularity of women’s sports. However, the report cautions that overlooking climate and health risks could result in overestimated financial returns.
The report advocates for integrated efforts by governments, leagues, and governing bodies to protect sports revenues. It recommends prioritizing climate resilience, infrastructure adaptation, and responsible resource management. As environmental pressures mount, the industry must either transition towards sustainable models or face substantial economic losses.
Original Story at mexicobusiness.news