Why Canada should jump on the lucrative sports industry bandwagon

Ask any sports fan, Buffalo and Toronto have two things in common, excessive snow and a love of the Bills, Buffalo’s National Football League (NFL) franchise. Fundamentally, sports are what tie these two cities together. It’s a reason for Torontonians, and more broadly Ontarians, to travel to west New York. On a grander scale, it’s about much more than two nationalities of fans supporting a common team; it’s about international economics. Cross-border interaction among sports fans, through travelling for live-game attendance or purchasing team apparel, leads to international flows of money, products, services, and culture. When Canadians travel to see a sporting event in the U.S. they’re not only spending money on American goods and services, they’re also contributing to the tourism industry in the U.S., and subsequently to its current account balance.

Canadian interest and fandom for U.S. sports teams far outweighs U.S. interest in Canadian teams, and it’s not hard to see why. We have one National Basketball (NBA) club, and we have zero NFL teams. The absence of these leagues, despite widespread interest in both, is simply inexcusable. Why shouldn’t we try to attract American sports fans to come watch our teams play?

Sports franchises are becoming more valuable and more profitable than ever. The Los Angeles Clippers were sold this year for $2 billion US. According to Forbes Magazine, the value of the Toronto Raptors increased by 28 per cent this year to $520 million US. Canadian cities could use this value. Sports franchises give cities instant international appeal and make places that may otherwise be unremarkable viable destinations for increased tourism and investment.

Setting aside sports franchises as a draw for tourists, they also provide support and value to the Canadian economy as a whole. According to an article by the Canadian Broadcasting Corporation, spectator sports in Canada contributed $4.5 billion to the Canadian economy in 2010, and this was before the recent rise in popularity of the Toronto Raptors. At a micro level, sports franchises create and support a considerable amount of jobs in their communities, both directly, by hiring Canadians to work for the team, and indirectly, by boosting the sales and value of nearby hotels, restaurants and bars.

In China, amidst a slowdown in growth and the gradual shrinking of its current account surplus, its government is turning to sports to provide a boom to the economy. According to Reuters, China plans to develop the country’s sports industry into a 5 trillion Yuan business sector by 2025 to improve employment levels and increase domestic consumption.

Canada and China, as two countries heavily dependent on trade, have both faced the benefits, as well as the consequences, of their economic composition. When oil prices fall, Canada is hit hard; when global demand for Chinese products falls, China’s economy suffers as well. Recognizing the need to invest in itself, China is setting its sights on the sports industry and is right to do so.

Prime locations for new sports franchises in Canada include Vancouver and Saskatchewan. Vancouver, situated perfectly in the Pacific Northwest and once home to the Grizzlies NBA franchise (now in Memphis), is craving another major sports team. As an international city trying to expand its brand around the world, an NBA or NFL team would simultaneously satisfy domestic demand and improve its appeal in the U.S., particularly in Washington, where a group of investors last year failed in their bid to purchase the Sacramento Kings NBA franchise and bring them to Seattle.

Saskatchewan, the only prairie province currently without a National Hockey League franchise, could certainly benefit from a major sports team as well. The province is booming, and it wants to stay that way. It, and the rest of Canada, needs to recognize the economic force that is sports, and invest and spend accordingly.