What is the future of the sports business in Singapore?

Can a new billion-dollar stadium give Singapore the edge it needs to compete for world-class sporting events?

When you mention Singapore and sports in the same breath, the closest you may get to a reaction is a polite nod from Formula 1 (F1) fans aware that one race in the auto racing championship – the Singapore Grand Prix – is held on the island. But the completion last year of the new $1.3 billion Singapore Sports Hub, a vast modern sports complex in Kallang, hopes to bolster the number of world-class sporting events held in Singapore and the country’s share in the booming $80 billion sports events market.

Singapore’s bid to become the premier sports mecca in Southeast Asia should gain momentum now that it has the infrastructure to bid for top-tier events, says Shehzad Haque, managing director at Seasoned Pro, a Singapore-based firm that organizes sports-related events. “I think the future of sport business in Singapore is very bright. I believe that the completion of the sports hub will really enrich the fabric of the sports industry in Singapore. It’s going to add a new dimension that we never previously had. We’re going to see more world-renowned stars and teams come to Singapore.”

Singapore is already on the map with F1, but Haque thinks that this kind of venue puts the city in a very different league. He adds that this is an important step toward making Singapore a true destination for sports events and fans.

The annual F1 Singapore Grand Prix is the crown jewel in the country’s sports events calendar, selling more than 100,000 tickets and generating more than $150 million in tourist receipts yearly. But beside this event and the Women’s Tennis Association (WTA) Championships, Singapore has not been able to secure a long list of prestigious sports events.

Spending heavily on infrastructure, as Singapore has done recently, should go a long way in attracting sports events organizers, argues Haque. Citing the successful model of Qatar, he says there is no reason why Singapore cannot emerge as the preferred sports hub in Southeast Asia with enough investment and promotion.

“Qatar is a smaller country with even less people than Singapore. But they spend a lot of money in sports and they have put themselves on the map. I see no reason why Singapore cannot try to emulate that in some way. Certainly within the Southeast Asian region, I feel Singapore is already trying to stand out,” he says.

$80 billion market
More than the prestige of hosting world-class sports events, Singapore is ultimately eyeing a bigger slice of the sports event market which has ballooned to $80 billion in 2014, growing 7% annually, according to A.T. Kearney estimates.

“The sports event industry is a thriving, and more importantly, a growing market,” says Naveen Menon, head of communications and media practice at A.T. Kearney.
When adding in sporting goods, apparel, equipment, and health and fitness spending, the sports industry generates as much as $700 billion yearly, or 1 percent of global gross domestic product. And the sports market will only continue growing in the coming years, according to Menon.

Revenue of sports events should continue to grow in the next cycle with projected revenue of $90.9 billion by 2017, an increase of $15 billion between 2013 and 2017, driven mainly by football.

Currently, North America dominates overall sports spending, accounting for $266 billion, compared with $204 billion for Europe and $180 billion everywhere else. But notably for Singapore, the share of non-event revenues in the sports market is greater outside of North America and Europe; there, sporting goods and licensed products account for 57 percent of revenues, while others account for 28 percent.

“Singapore has been eyeing a share of that market for some time now,” says Menon of the lucrative sports event market, noting that the country has been making moves to raise its profile.

Singapore has hosted the F1 race for seven years straight and won the rights to host the season-ending WTA Championships for 5 years, beating contender cities like Tianjin and Monterrey.

He says the move to build the Singapore Sports Hub is another step to attract more high-profile sporting events to the city.

Media Master plan
Besides serving as a compelling venue for world-class events, the newly built national stadium is part of the country’s master plan to build a thriving ecosystem around quality media content, says Menon, which piles on more pressure for success.

“Singapore is on a 10-plus-year path to activate the entire media ecosystem. This includes nurturing creative talent, developing original content, supporting the pre- and post-production activities, and building infrastructure for premium quality events,” says Menon.

“With sports content being one of the most popular genres among viewers, having a world class stadium that can host big name events will open up opportunities for media houses to create and market relevant content,” he adds.

Singapore is betting that this complex planning and synergy building will help it win against regional and global rivals that are also competing to host world-class events. And so far, this has yielded great results, based on analyst assessments.

“One of the key reasons behind Singapore’s success story has been the emphasis policymakers in the city-state put on long-term vision and planning,” says Menon.

“There is always a ‘master-plan’ behind any initiative and various elements and projects are planned and executed to achieve the one big goal. That is exactly what is happening with the move to build a new billion dollar national stadium. It’s part of Singapore’s push to become a sports hub.”

Teething problems
But even the most carefully laid plans will need to allow for curveballs, as Singapore has found out the hard way. In the first months of operation, the Singapore Sports Hub encountered issues related to its pitch, with some events being sidelined due to venue safety and suitability concerns, including the New Zealand Rugby Union cancelling the Maori All Blacks and Asia Pacific Dragons match in November.

But Menon downplayed these issues, saying: “Some have raised concerns over the few issues that have cropped up at the stadium in the initial days. I don’t think we should be too worried about these as they are just teething problems that are normal when you launch a sporting arena of this magnitude.”

Taking all factors into account, the Singapore Sports Hub has the makings of a world-class sports event venue because of its super quality, veteran leadership and a country’s strong track record in major sports.

“The success of any stadium depends on a few key factors,” says Menon. “The first is the quality of design and functionality. On this front Dragages – the construction firm – have done an excellent job.”

“The other factor is the quality of events leadership at the stadium. Winning the rights to host an event is just the first step; the more important part is having the right people in place make sure it is success. The Singapore national stadium has a very experienced ex-London Olympics team leading the management.”

Menon adds that to to attract fans, one needs to start hosting big-ticket events in major sports. “Singapore has already proven that it can do so and I expect it to add more events in the years to come,” Menon notes.