Malaysia’s sports industry contributed RM18.8b in 2017 – that’s just the tip of the iceberg

In 2017, the Malaysian sports industry generated RM18.8 billion.

According to the Department of Statistics Malaysia (DOSM), the same year saw 36,511 people employed in the industry, with wages amounting to RM876 million.

That figure is just the tip of the iceberg.

Conversations regarding the value of the sports industry in Malaysia started in 2009, during Datuk Seri Ahmad Shabery Cheek’s tenure as Youth and Sports minister.

His background in economics fuelled his interest in wanting to better understand the industry, and the opportunities it offered to Malaysians.

During the National Sports Industry Lab in 2010, it was revealed that in 2009, the sports industry in Malaysia was estimated at RM30.2 billion. Former Universiti Malaya lecturer, Associate Professor Dr Megat Ahmad Kamaluddin Megat Daud told Twentytwo13 that based on his research, the industry was valued at RM37.78 billion in 2013.

Megat Ahmad was tasked to spearhead the study ‘Asean Fifa World Cup 2034: The feasibility report’ – an idea conceptualised at the 2010 Asean Senior Officials Meeting on Sports. The findings of the study was presented to the Youth and Sports Ministry in 2017 but never made public.

Institute For Youth Research Malaysia studied the impact of the 2017 Kuala Lumpur SEA Games. In its report, tourism in Malaysia earned RM34.5 million, food truck operators earned RM500,000, while fans from abroad spent RM1.7 million during the two weeks of the regional Games. Visitors also spent RM32.7 million in hotel receipts during their stay in the country.

However, there were no concrete steps taken to calculate the true valuation of the industry beyond 2017.

Efforts to capture data related to the sports industry resurfaced during Datuk Seri Reezal Merican Naina Merican’s time in office. But he was quickly replaced by Datuk Seri Ahmad Faizal Azumu, who also shares the same interest in wanting to document the value of the industry.

Ahmad Faizal, had repeatedly insisted on wanting to create an ecosystem that sees Malaysians – from venue operators to food traders – enjoy the spill-over effects of the industry. Thus, the conceptualisation of the Malaysian Sports League, that will see leagues running on weekends, nationwide.

However, many find it difficult to fathom the importance of collating such data – even those within Menara KBS.

The Sports Satellite Account (SSA) is in the works and will hopefully be ready next year. However, it will still take time for those involved in the SSA to collect as much data as possible to provide an accurate valuation of the industry.

Data needed to support and justify policies and strategies

The SSA is a formal and comprehensive statistics component that will be used as a guide to determine the valuation of the sports industry and how it contributes to Malaysia’s gross domestic product (GDP).

Also, it must be pointed out that to date, only 23 Malaysia Standard Industrial Classification codes are used to determine the contribution of a product or service to the nation’s economy. Experts believe there are some 400-odd codes that can be used, thus widening the contribution of the industry.

Sports industry needs to be clearly defined

While the definition of sports is described in the Sports Development Act 1997, there is no clear description of the ‘sports industry’. Hopefully, this will be clarified in the soon-to-be-launched Malaysian Sports Industry Parent Plan (Pisma). All eyes will also be on the yet-to-be-published National Sports Vision 2030, to see how sports – and everything related to it – will be defined.

This is important as even DOSM is struggling to understand what falls under sports products.

Other new definitions that need to be developed include recreational sports, traditional sports, sports competitions, sports facilities, sports services, and sports products.

For example, the sale of bicycles and jerseys, according to DOSM, falls under manufacturing, and not the sports industry. While the Youth and Sports Ministry might want to claim that it should be parked under the sports industry, critics argue that not all bicycles and jerseys are used, or worn, for sports-related activities.

There is also the challenge of defining sports tourism. The Tourism, Arts and Culture Ministry has been quick to claim mileage on such initiatives, including that of MotoGP and other international events held in Malaysia, when in fact, it should also be valued under the sports industry.

Why should the sports industry be valued?

This is to ensure that the government and the rakyat truly understand the value of the billion-ringgit sports industry. This will assist in the development of policies that will attract further investments into the country.

Locals will also be encouraged to be part of an industry that has plenty of potential.

Tax exemptions by the government, for newbies and those involved in the early stages of their businesses, will attract more people to be part of the industry. This will, in the long run, create more economic opportunities that will contribute to the government’s coffers.

Creating a sporting nation

A sports industry exposition is set to be held in conjunction with the National Sports Day in October. The idea is to further promote the sports industry to the masses.

The main objective is to spark interest and to obtain the buy-in of the people. For the longest time ever, sports in Malaysia have always been elite-centric, turning most Malaysians into fans, instead of amateur athletes.

The valuation of the sports industry, via the SSA, will hopefully see more Malaysians adopt an active lifestyle. This will, in return, keep in check the rise of non-communicable diseases among the population, and increase the nation’s talent pool.

With a general election on the horizon, some fear that the ongoing efforts will take a back seat once a change of guard is seen in the ministry. Many initiatives in the past have been curtailed as they were not aligned with the agenda of the minister of the day.

If the government is truly serious about the sports industry, then full attention must be given to the SSA. Otherwise, the same conversations about the sports industry will continue, many years from now.