Several years ago, a global pandemic disrupted our sports industry. Covid-19 brought many stakeholders to a standstill, as they were among the first to close and the last to reopen under the lockdown.
The sports ecosystem had to look into pivoting or transforming for financial sustainability under the ‘new normal’.
Aside from the Badminton Association of Malaysia, which is looking to transform itself and the sport, many others have reverted to the old ways and have not learnt to adjust to a new normal of digital transformation and financial sustainability.
As far as businesses are concerned, they may reach pre-Covid-19 financial levels in the last quarter of 2025.
Budget 2025 will see Youth and Sports Minister Hannah Yeoh having gone through the major cycle of multi-sport Games.
After missing out on the Birmingham Commonwealth Games in 2022, held from July 28 to Aug 8 (since she only took office on Dec 3), Yeoh presided over the Cambodian Southeast Asian Games in 2023, the Hangzhou Asian Games in 2022 (delayed to 2023 due to the pandemic), and this year’s Paris Olympic Games.
There is a better understanding of high-performance sports and how each key stakeholder plays an intricate role in delivering the shared goal of podium success.
This reflects the pathway of sports and how the private, and the public sectors can play significant roles.
Prime Minister-cum-Finance Minister Datuk Seri Anwar Ibrahim will table Budget 2025 tomorrow evening, and the sporting community has high hopes.
Sports play a crucial role in Malaysian society, from promoting healthy lifestyles to nurturing national pride through international competition. As an industry, it is also a key economic generator.
The upcoming budget is expected to continue addressing key areas like sports development, infrastructure enhancement, and funding for athletes.
As we emerge from the financial and developmental impacts of the pandemic, the commitment to transforming and investing in sports will significantly influence the future trajectory of sports in Malaysia.
Grassroots development and community sports
Last year, the Youth and Sports Minister introduced a game-changing tax relief that would channel more household income into sports at the grassroots and recreational levels.
One of the primary expectations for the 2025 budget is a renewed focus on grassroots development. Malaysia has a rich history in a handful of sports, but it requires a strong pipeline of young talent to remain competitive in those, and a broader number of sports.
Funding for school-based sports programmes, local clubs, and community facilities will be crucial to nurturing the next generation of athletes.
Grassroots development is not only about finding the next Datuk Lee Chong Wei or Datuk Nicol David. It must ensure that all Malaysians have access to quality programmes that promote a healthy lifestyle and social wellbeing.
Investment in sports for youths can lead to long-term benefits, such as reducing healthcare costs and promoting active living.
Engaging in social clubs and organising community sports will align and solidify active living among the general public. A sport like American flag football is organised and managed by the community, and our women’s team is ranked 16th in the world.
As a medal sport at the Los Angeles 2028 Olympics, there is a chance for them to qualify.
Prioritising athlete welfare and elite performance
Following the formation of the Road To Gold committee and having gone through the cycle of multi-sport Games preparation, the budget must enhance this aspect further.
The ministry must consider the often overlooked aspects of elite athlete preparations and place them in a better position to land a podium finish.
Infrastructure improvement through stronger programming
As the sports ecosystem recovers financially from the pandemic, our infrastructure needs an upgrade.
The physical infrastructure and facilities managed by federal and state governments, as well as city councils, require engaging activities and programmes. Digital transformation can play a crucial role in enhancing their usage.
Encouraging former athletes to certify themselves for coaching will also help increase the usage of such facilities, and a matchmaking application can help secure supply and demand under various facilities around the country.
Promoting inclusivity and lesser-known sports
The budget presents an opportunity to promote inclusivity within sports. This includes support for women’s sports, para-sports, and lesser-known sports that do not receive as much attention or funding as mainstream disciplines.
Increasing funding for women’s sports programmes and competitions will address gender disparities and encourage greater participation among women and girls.
Malaysian para-athletes have achieved remarkable success on the international stage, and continued investment in their development is essential.
Accessible sports facilities, equipment, funding, and coaching programmes are necessary to ensure athletes with disabilities can train effectively and compete at their best.
Additionally, the budget should consider supporting non-mainstream sports, such as rock climbing, handball, and American flag football, which have seen growing interest among Malaysians. Funding for these sports can diversify the sporting landscape and provide opportunities for Malaysia to shine in new arenas.
Sports financing – major corporate tax incentive
The current single-tier tax deduction available to corporations and individuals is not attractive enough.
In addition, there is a 10 per cent cap on what a company can claim under the tax relief, including other areas like education.
Hence, sports do not have an exclusive position with regard to large companies that also invest in education and other elements within the 10 per cent cap.
Companies are now seeking either a double deduction or a reduction in their sponsorship amounts from their tax liabilities after applying the tax rate. After decades, this would get companies to sit up and pay attention.
As several cities in Malaysia are looking to host the 2027 Southeast Asian Games (SEA Games 2027), we can expect a special tax incentive for companies contributing to its funding.
The challenge of balancing priorities – major transformation?
While expectations are high, the budget must balance sports with other pressing priorities, such as healthcare, education, security, and economic development.
However, sports can be a catalyst for various societal benefits that extend beyond the playing field. From fostering national unity to promoting public health, an investment in sports is an investment in the nation’s future economic generation.
The government should also consider incentivising private sector involvement in sports development.
Public-private partnerships can bring additional resources and expertise to support the growth of sports in Malaysia.
Corporate sponsorships, collaborations with non-governmental organisations, and community-driven sports initiatives can complement government funding and ensure a more sustainable approach to sports development.
Our sports ecosystem is in dire need of transformation, and the government can effect this change in structure, commercialisation, and utilisation of sports science to encourage a professional sports system.
Nation branding via sports
Sports is a powerful tool used by nations to promote themselves – from Nazi Germany at the 1936 Olympics, Tokyo in 1964, Moscow in 1980, Seoul in 1988, and many others.
Recently, the Saudi government placed sports as one of the central pillars of its Vision 2030 plan.
For the London 2012 Olympics, the United Kingdom government added a valuable aspect by utilising sports events to attract inward and outward trade.
When it won the bid in 2005, the British government quickly formed a working committee involving sports, media, culture, foreign, and international trade ministries.
One day before the opening ceremony, then-prime minister David Cameron hosted global investors and announced that Britain was open for business.
During the Olympics, Britain hosted another 17 global business summits between British businesses and potential partners, investors, and trading partners.
In a July 2013 report jointly produced by the Mayor of London and the United Kingdom Government – Inspired by 2012: The Legacy from the London 2012 Olympic and Paralympic Games – £9.9 billion worth of inward and outward trade was achieved through the London 2012 Olympics (at that point).
The GREAT Britain marketing campaign was launched in 2011 by the United Kingdom government as part of its impactful nation branding exercise and used across government ministries to promote the United Kingdom’s best.
In tandem, the golden decade of hosting major sports events helped place anything and everything British on the map.
The success of the Golden Decade of hosting sports strategy and the GREAT Britain marketing campaign globally highlighted a whole-of-government approach to nation branding.
Following the confirmed hosting of the SEA Games in 2027, Malaysia should look into a similar whole-of-government approach to hosting major sporting events through the right fiscal and non-fiscal policies.
Hosting major events has benefits beyond sports. It can showcase the Malaysian Madani principles globally.
Investing in a sporting future
Budget 2025 is crucial for the government to demonstrate its commitment to the growth and development of sports.
The budget can set the stage for a more vibrant and successful sporting future by focusing on grassroots programmes, community sports, elite athlete support, infrastructure development, and inclusivity.
Investing in sports today will pay dividends tomorrow, on the field, in the industry, and in society.
The matching grants introduced before have helped many companies in the sports event side of the industry recover partially from Covid-19.
It would not be out of place to hope for a budget that recognises the unifying power of sports, its economic contribution, and its potential to uplift the nation into.
The views expressed here are the author’s own and do not necessarily reflect those of Twentytwo13.
