Speech by Mr Lim Teck Yin, CEO of Sport Singapore at the Opening Ceremony of Sports Matters Conference
17 Sep 2014
1. Good morning. I have to say that I am delighted to be part of a conference populated with so many speakers known for their corporate innovation and entrepreneurial drive. This promises to be one of the most thought-provoking sports conferences seen in Asia. Thank you to the event organisers for sharing that spirit of innovation and choosing Singapore as the host city. To our overseas guests, a warm welcome to Singapore.
2. Asia-Pacific holds tremendous potential for sports business and industry in this decade and beyond. Singapore certainly aims to be a hub for thought leadership and business expansion in this region.
3. It is very apparent that sport has been riding on the back of resilient economic growth and the developments of the digital age. In recent years, we have seen sports businesses cross the different dimensions of live events, broadcast and media, consumer products, and services across the entire sports ecosystem’s value chains to set up offices in Asia. Notably in Singapore, our educational institutions are offering more in sports discipline--and the undergraduate programmes have been oversubscribed many times over.
4. Through this growth, we as Singaporeans (and as Asians) have raised our expectations of sport in our communities. More than ever before, we have aspirations to watch world class sporting action—and we got that last weekend in the glossy staging of the Asian Netball Championships. The fact that our national netball team regained the title made front page news along with tributes to the spectacular entertainment value of the championships this year. Consumers increasingly want superior production values with their sport—and, yes; they do want to feel that surge of national pride when our athletes do well at international competitions.
5. All of this means a continuing call to action by government to invest in sport through infrastructure and direct funding. (The new Singapore Sports Hub is evidence of that.) The growing prominence of sport in national culture and economy should cause us to think more deeply about the way we collaborate. Here, I am talking about the nexus between private business and governments, and also with sports federations in tri-partite strategic partnerships. Strong partnerships in this context should go beyond each looking at one’s own investment or expense on direct interests but in cross-cutting shared outcomes.
6. I’m describing a form of impact investing. Akin to sponsorship and more than CSR dollars at work, impact investing has served to combine the best of both worlds in many sectors. Private equity firms make direct investments in enterprises or agencies engaged in to produce both a social and commercial benefit.
7. Great strategic partnerships are based on shared long-term goals, and not merely on the short-term returns of a sporting event or a television production. Thus, Sport Matters is a compelling platform to facilitate opportunities for networking and substantive future collaboration.
8. In my capacity as CEO of Sport Singapore, I am guided by our strategy and plans under Vision 2030. Released in 2012 after a broad stakeholder consultation, Vision 2030 issued a clarion call for people to “Live Better through Sport”. For us in Singapore, sport is a strategy in itself. Through the partnerships that we forge in and around sport, we are able to achieve the desired sporting, social and economic outcomes for our country. This is our impact investing.
9. Thus, I would like to touch on two key issues that have relevance for both of us—for you as you pursue business opportunities in Asia; for us in Sport Singapore as we strive to activate Vision 2030.
Immaturity of the Asian sports market against the rising aspirations of the Asian consumer
10. First, the Asian sports market is relatively immature. Some of you may disagree with me. But this market is at a relatively early stage of growth.
11. The value of total sponsorship deals in Asia has grown by about 14% to S$4.15 billion (US$3.28B) in 2013 from S$3.63 billion (US$2.89B) in 2011. However it would appear that this growth is less a function of increasing deal values but rather by volume of deals. Volume rose by 18.7% to 8,588 deals in 2013, up from 7,234 in 2011. Notwithstanding this volume growth, the total value is still barely 5% of the total sports sponsorship spent globally!
12. Incidentally, in Singapore:
• Singapore’s sports sponsorship value has grown from S$105M (US$84M) in 2011 to S$108M (US$85M) in 2013, vis-à-vis the overall sponsorship value growth from S$171M (US$136M) in 2011 to S$181M (US$143M) in 2013
13. On consumption, there are the few who are willing to spend a good sum of money for equipment and events, but the general mass market response to premium sports events, goods and services is not as strong as what one could expect in Europe or America.
14. So, government intervention is very apparent as we naturally recognise market potential and the aspirations of the people. Sports businesses, I think, love intervention when it results in subsidies and direct investment.
15. However I think there is also a need for sports businesses to apply their expertise to think about how to partner government to develop a sustainable growth model for its offerings.
Dilution of consumer demand in an expanding market
16. My second point: The expansion of choice in the marketplace has far exceeded consumer demand, resulting in a very apparent dilution of market share for each player. This is to be expected in a market with more potential to be optimised. Everyone will want to come to the party earlier rather than later. In the uncoordinated free market, we should expect peaks and troughs of business interest. For example, I think that Singapore will soon experience a peak in the next few years with the slew of high profile developments of the last few years. While this is good for the consumer, it will quickly dilute the the potential for any single element to develop in this market.
17. The challenge for governments is to have to decide who to encourage, who to partner and who to, in some cases, provide a significant leg up. There would be a gradation of support for different parties depending on the perceived value proposition that one brings to the table. Discerning what strategic choices to make in this regard is particularly challenging when there are many small segments and choices.
18. To illustrate my point, there are 65 national sports federations in Singapore today. That number puts a challenging spin to facility master planning when we try to meet the aspirations of different segments. How popular should a sport be before we work towards creating a facility for interest groups such as an Olympic Ice Skating Rink, more Cricket Fields or equestrian parks, or even a velodrome?
19. Another anecdote – How many football leagues, domestic and regional, can there be before the football fan’s attention is fully stretched; especially when there are ample offerings on TV, or YouTube for that matter, to satisfy the most ardent supporter.
20. My anecdotes may sound like a uniquely Singaporean problem because of our small land mass and population. But this challenge of dilution and cannibalisation is evident in other countries albeit in different forms and scale.
- The Asian viewership for F1 in China declined by 34% in 2012 largely due to clashes with other sporting offerings fighting for the same prime time space.
21. The fact that we have only seen 2% growth in value of sponsorship for sports in Asia vs 61% growth in value for non-sports sponsorship, should give us pause. We must remember that sport does not just compete with itself for interest and attention but also against all other lifestyle offerings. In Singapore, the growth in sport sponsorship is 3% vs 11% for non-sport sponsorship.
Our Collective Response: Enhancing the nexus between professional sport and sport for development
22. What could be our collective response to what I have outlined till now?
23. I reiterate that governments need business partners who take the long view, and who are willing to jointly invest in developing the market for sport and achieve lasting impact. To do this well, we need to work horizontally across the system, share ideas and perspectives on trends, and look at how we can complement and not derail each other’s efforts.
24. This is really the nexus between professional sport and sport for development. We can work together on two fronts:
25. First: Let’s jointly identify critical capability gaps and invest in capability and workforce development efforts. The challenge, for all of us, will be in building our capabilities in people, programming and infrastructure as these are the catalysts for market growth. International sports businesses bring expertise to bear from around the world to host countries and should work with local governments to anchor institutional expertise in preparation for demand growth.
26. In Singapore, there are literally hundreds of people graduating every year now from sports related courses looking to start careers. They need expert mentors who believe that the long-term commitment to the workforce will bring significant future gains to their business interests.
27. Second: Let’s think about cross investing in non-direct interests that would have longer term impact on your company and brand value. Again, I am not talking about pure CSR but impact investing. For example: Sponsor local national athletes and teams even if you are not the typical high performance apparel or equipment maker. It would raise overall standards and have longer term value for the sports market by igniting interest, engagement and consumption.
28. The longer-term impact investing for positive benefit and social outcomes through intentional design is emerging globally and already proving to be a powerful tool in diverse areas such agriculture, community regeneration and affordable housing. We can draw best practices from these sectors in forging partnerships between government and the private sector.
Example: Sports Hub Private-Public Partnership
29. Let me close by discussing the PPP arrangement for the Singapore Sports Hub to illustrate what we are hoping to achieve in Singapore. The Public Private Partnership (or the PPP) seeks to bring together the expertise and resources of the public and private sectors to collaborate and catalyse the market and interest for sport and a healthy lifestyle for Singaporeans of all ages.
30. As part of the PPP, a Premier Park Foundation (or PPF) was set up to reinvest a significant portion of Sport's Hub's commercial revenues to develop and enhance events, activities, capabilities and facilities.
31. The shared objects for PPF are broadly to:
- Promote community events
- Upgrade facilities and invest in new equipment
- Subsidize sports events that might not otherwise be viable
- Support training programs
- Finance technological development
32. In many ways, the PPF is a fine example of impact investing: where business returns are achieved and measured alongside positive and longer-term social outcomes.
33. What have I learned from the PPP arrangement so far? As partners, we are choreographing a brand new dance. We come together from different starting points so it isn’t that easy. When we are clumsy or unable to sync with our partner’s moves, we step on each other’s toes. One partner or the other may get a little riled. But those occasions present opportunities to clarify and better appreciate each other’s intentions. Then we learn, adapt and make adjustment to our postures, so that we can flow as a single, cohesive team. Once that is achieved, we would be able to invite more partners to the dance floor.
34. From Singapore to Nanjing to Incheon, Asia continues to make history in the sporting arena. Over the past few years, we have observed and contributed to the evolution in the patterns of the Asian consumer.
35. Looking ahead, much of our success will be predicated on our ability to partner and collaborate as we strive to meet the demands of a more discerning consumer, against the backdrop of more diverse lifestyle opportunities.
36. We don’t speak for all Governments, but certainly for Sport Singapore, we strive to be a smart investor. And we want an astute partner in sport with a longer-term view and deep appreciation to drive integrated strategies for meaningful and aspirational national outcomes.
37. As you network and exchange ideas over these two days, I hope you will lay the foundation for future partnership. I wish you a successful and impactful conference.