How sport helps an Economy

Sport is viewed in many dimensions across the world. It provides great entertainment to the public, career opportunities to the players, coaches and others associated (broadcasters, journalists etc). But we seldom look at it from an economy perspective. I believe that a huge sporting extravaganza is an economic kicker. You suddenly have an event which creates new avenue of enterprise at various levels.

Lets try and break it down, using the IPL as an example.

Direct Impact

1. Players - Earning significant salaries, which will eventually trickle into the economy
2. Broadcasters - Huge advertising revenue due to popularity of sport
3. Team Owners - Revenue generation through broadcasting rights, gate receipts and merchandise
4. Stadium / Venues - Match hosting fee
5. Government - Through tax receipts (In the context of IPL, this may not be entirely accurate

These stakeholders are direct beneficiaries of hosting a huge sporting event. Obviously the trickle down effect from each of these parties is significant. At an individual level, there wont be a significant impact to the above mentioned stakeholder (except for maybe the players) as most of them are fairly well off in their current life scenario.
The life altering impact is on a different set of people, mentioned below.

Associated Impact

1. Food Vendors - In and around the stadium there are large number of food / refreshment vendors who suddenly have an additional target audience ready to consume.
2. Merchandiser - The small guys manufacturing and selling jerseys, banners , placards, whistles, hats, accessories etc..
3. Event Management Firms - Organizing and managing such events is a professionals job
4. Tourism - Loyal fans travel along with teams they support

I may have missed out a few, but the point I am trying to make must be clear by now. It provides opportunity to a bunch of small guys to grow their business, expand their horizons and strive for more. These events also facilitate fans to consume more than they otherwise would have.
When the IPL shifted to South Africa last year, it generated over 1billion rand for the economy. That is the kind of impact sport makes.