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The Economy of Sport


Article appeared in the “Commercial Courier” October November 2011

Although not in its infancy, the sports industry on our islands is one which is yet to be explored to its full potential, offering the possibility of business development and growth to numerous sectors, as well as the advancement of the economy as a whole. Lorrieann Vella speaks to Envic Galea, Managing Director of Ultramar Ltd and General Secretary of the European Judo Union about the current state of play in the local sports industry and the areas for development and potential.


As Mr. Galea explains, the current situation regarding sport in Malta leaves much to be desired. “Sport in Malta is still considered just a leisure activity, administered by volunteers. The only professionals are in the fitness sector.” he says. “What’s more, is that there are very few facilities to organise international events, and the facilities that do exist are not close to accomodation.”


He goes on to point out that there is no serious planning for bidding to hold international events in Malta. “Funding for sport is limited, with no national structure for sport funding, like the UK Lottery, in Great Britain” he adds.


Mr. Galea argues that sport can help alleviate a number of problems, such as obesity in children, which is due in part to lack of physical and sport activities in Maltese style of living. “Besides this, sports involvement gives discipline and occupies childen and youths’ time, even helping towards the decrease of alcohol and drug abuse, as well as youth gangs and criminality,” he states.


However, he is quick to point out that initiatives have been introduced to improve the situation. “Government has started to give the economy of sport more attention, becoming more aware of the potential.” These not only include the White Rocks and Marsa Sports Village Projects, but also various schemes co-ordinated by the Parliamentary Secretariat for Youth and Sport and the Malta Sports Council.


One particular scheme encourages not-for-profit sports organisations to invite foreign counterparts to participate in training camps, competitions and conferences.  These clubs are then paid on commission basis, depending on the the number of bed-nights. In 2009, 22 organisations hosted 35 activities and attracted 22,000 bed-nights while injecting around €1.2m into the economy. Last year, the number of participating clubs increased to 36, organising 83 different activities and bringing an additional 41,000 bed-nights to Malta and a further €2.2m to the economy.


Mr. Galea points out that Malta has a number of advantages, and we need to make the best of them. “Malta is safe and attractive to foreigners, and EU member, and it is easily accessible,” he says. “Volunteers have also accumulated experience in international event organisation.”


So what else needs to be done? Mr. Galea suggests that education and professional formation is a good place to start. “Unfortunately, locally physical education is not considered an important subject. However, our good education system can easily convert to sports education as well,” says Mr. Galea. “With families working longer hours, the Maltese Schools can easily extend school hours and be the place for teaching and practice of sport and art.”


Mr. Galea explains that that sport should be studied as a science and a profession. “Besides local education, through distance learning being so much easier today, this allows to reach and form qualified professionals in the sector.”


He adds that those individuals that are already in coaching also need to be qualified to professionals. “This is for their own sake and professional protection, as well as to increase the level of professionality. They need to continue studying, to provide knowledge based coaching and qualified event and venue managers”


In the case of facilities and the necessary infrastructure, Mr. Galea states that facilities not only need to be larger and more flexible, but they also must be within proximity of the necessary accommodation.  “In parallel, this would open new doors for the conferences and incentives sector, through co-ordinated planning with event organisers,” he explains.

Contrary to what most people may think, it is not football which is the biggest worldwide sport, but walking. “So sports tourism is not just about football. There is just so much potential,” says Mr. Galea. “For example, beach volleyball. Countries not normally associated with beaches, such as Finland. In Tampere they have 12 city-maintained beach volleyball courts..”


When it comes to international events, Mr Galea points out that you can tap into organised groups, such as sports specific language related activities, such as sports activities combined to English language lessons.


He also states that more effort needs to be made to bring big sports events to Malta, gradually leading to an annual calender of events, as opposed to just the summer months. “These could also include multi-sport activities,” he comments. “With these events you get the high spenders.”


He also mentions the importance of attracting international federations to set up their headquarters in Malta. He points out that he convinced the European Judo Union to incorporate in Malta and the Ministry of Finance granted exempion from taxation. “In this regard, the laws of Malta have been amended and thus favour the incorporation of such international institutions, which creat Back Office service jobs in accounting and administration amongst others.”


So it seems the main issue at hand is a holistic approach to the Bussiness and Economy of Sport. Mr. Galea believes that, whilst not forgeting the importance of the volunteer work, Maltese sport should become a self sufficient economy. “It is not a charity. Other countries have proven that sport can be a good economy,” he says. To emphasise his point, Mr Galea refers to the Economic Value of Sports in England 1985-2008. (August 2010), a report compiled by the Sport Industry Research Centre within Sheffield Hallam University. The report lists the impressive figures related to sport related economic activity, consumer expenditure, as well as employment. In 2008, £16,668 million was spent on sport-related economic activity, consumer expenditure accounted for £17,384 million, while there were an estimated 441,000 individuals in sport-related employment. The majority of sport-related employment is supported by the commercial sector, at 76%.


Mr. Galea concluded that the most interesting point coming from this report, and which in fact should be a basic premise for Malta to engage its full potential, is that a substantial portion of the population in the UK consider sports as a basic need rather than a luxury. Thus a change in mentality is required now more than ever to enter this increasingly lucrative industry.