Covid contributes to weakened sports sector In Scotland, new report reveals

Thomas Barnard (Irwin Mitchell)’

SCOTTISH cities were amongst the worst performers in the UK sports economy in 2020 but a new report says targeted government support can help a sector worth almost £250m combined in Edinburgh, Glasgow and Aberdeen drive future prosperity and create more jobs. 

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 vital role of the sports economy* in UK and how further growth can be unlocked.

In 2019, Edinburgh’s sports sector was one of the top 10 performers in the UK for economic growth and employment. The city had a sports sector worth £159.7m with employment standing at 4,205. While Glasgow was in the bottom 10 on both measures, Aberdeen just made the top 20 for GVA growth, with a sector worth £80.8m.

By 2020 all Scottish cities had seen a reversal of fortunes, with Edinburgh falling from 8th place in 2019 to 12th bottom, with a 35.8% decline in GVA** and 19.0% fall in employment. Glasgow moved down two places for economic output and remained 9th bottom for employment. Aberdeen fared little better, being 8th and 10thbottom of the table for GVA and employment respectively.

Comparison of Sport GVA in Scotland (£m) Source: Competing for Growth

In assessing the value of the sports sector to city economies, the report looks at the activities of football and rugby clubs, plus community sports teams, local gyms and leisure centres, factoring in the commercial side of the sports economy, including manufacture and retail of sports goods.

Looking at ways to unlock the potential of the UK’s sports economy, the report makes a number of recommendations to government, including:

•           Women’s Sport – Unlock funding to support the further growth of women’s professional sport

•           Climate change – Provide funding and guidelines for green objectives for sports clubs

Thomas Barnard, partner and National Head of Irwin Mitchell’s Sports sector team, said:

“Scotland has a rich sporting history, with Rangers and Celtic two of the sport’s most iconic football clubs; while Murrayfield has played host to some of the biggest rugby fixtures rugby on the world stage and is the 5th largest stadium in the UK. This is not to mention Scotland’s famous golf courses, acclaimed around the world.

“This report makes clear the profound shock the pandemic had on the sporting economies of some cities and the impact in Scotland is a prime example of this in action.

“The ranking of cities by economic output and employment in 2019 and 2020 shows some big changes and makes clear just how much economic turbulence was caused by covid, causing a fall in output and seeing many former viable businesses forced to shut down.

“The shock that Covid gave to the Scottish sports sector has been considerable, but it’s possible to deliver a big change in a short space of time and based on the report’s recommendations, Scotland is well-placed to be able to do that.

“One area of growth identified in the report is women’s sport, and 2022 has already proved a ground-breaking year in that respect. Scotland could have two women’s teams competing in next season’s Women’s Champions League, which follows Celtic and Rangers both competing in the Champions League group stages for the first time in a decade.

“That two SWPL teams could be competing at the highest level of European football is a huge boost to women’s sport and should be capitalised on. With sound investment, there is a real opportunity to take advantage of the surge in popularity of women’s sport and harness the power of sport generally to give a real boost to economic prosperity at a particularly uncertain time.”

Irwin Mitchell’s sport sector team advises individual athletes; sports clubs; leisure groups; national and international governing bodies and sports agencies. Its team of experts advise on a diverse range of issues including tax and image rights structures; dispute resolution and disciplinary action; commercial transactions; property; IP and employment law. Irwin Mitchell is the official legal partner of England Rugby; UK Athletics; and British Rowing.

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