Measuring the Economic Impact of COVID-19 on the UK’s Leisure and Sport during the 2020 Lockdown

Abstract

This research evaluates the effect of the SARS-CoV2 pandemic on sport Gross Domestic Product (GDP) and consumer expenditure in the leisure sector in the United Kingdom (UK). The leisure sector is divided into leisure at home and away from home, examining in this way the different patterns that emerged because of the national lockdown in 2020. The effect on sport GDP is examined using the Office for National Statistics (ONS) surveys and the UK Sport Satellite Account (SSA). The study found that, because of its reliance on human contact, sport GDP is likely to decline by more than twice the rate of the overall economy. Furthermore, this finding is consistent with the 2020 consumer expenditure on leisure that shows increases in spending on home leisure but also a huge decline in spending on out-of-home entertainment. The decline in GDP is extremely likely to put pressure on profit margins and hence threaten the survival of private enterprises, raising issues of sustainability under conditions of a pandemic. Increases in long-term public funding for reducing sport inequalities should be considered along with short-term relief packages for the sport sector. Additional policy suggestions are offered to address these issues.

1. Introduction

COVID-19, caused by the severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2), was declared as a pandemic by the World Health Organisation (WHO) on 11 March 2020. The pandemic resulted in different forms of lockdowns across almost all countries in the world. Such lockdowns were enforced on two fronts: domestic and international. At the domestic level, governments restricted people’s movement and instructed personal confinement to homes, drastically limiting daily interactions among people and establishing social distancing. At the international level, some countries sealed their national borders, restricting the movement of goods/services and people from one country to another.

The pandemic and global lockdown have had significant negative consequences for society and the economy. For example, in 2020, according to World Bank forecasts [1], the global economy shrunk by 5.2%. In the case of the United Kingdom (UK), the economy in constant prices reduced by 10%, an unprecedented level for peacetime. This was the worst economic performance relative to any other comparable country (in terms of economic and population size) in Europe, where the forecasted economic decline was about 8¾% [2]. The economic decline placed a lot of pressure on profit margins, with many companies unable to continue operating as usual without substantial state intervention.

The pandemic has also drastically affected the practice of sport and leisure activities, in particular some economic sectors such as tourism and catering [3,4]. Many sporting and leisure facilities were closed, heavily impacting many sports activities, both professional and amateur. For example, the Tokyo 2020 Olympic and Paralympic Games and the European Football Championship were postponed to 2021 and sport leagues in many countries were disrupted. This type of disruption has not happened since the Second World War.

Some studies have analysed the potential effects of the SARS-CoV2 pandemic on different aspects of sport. Some recent papers have focused on the impacts on sport tourism and sport mega-events [5,6], sport entrepreneurship [7], or non-profit sport clubs [8,9]. Generally, the major players in the sport supply chain (e.g., teams, sponsors, TV broadcasters, and gym operators, etc.) and related industries depending on the sport (e.g., hotels, restaurants), have been severely affected by this pandemic. As a consequence, some authors have argued that there could be an enduring shift in the sport sector, radically transforming some sport activity patterns [7,10]. At the same time, these changes could offer new opportunities for some sport entities (i.e., online sport and health food, online training and fitness events, and e-sports, etc.). In other words, the pandemic could have a long-term sustainable effect on the sport sector. This requires specific analysis at the country level of the sports sector and industry, but empirical studies to date have only considered the distributional effects of this pandemic on some professional leagues [10,11], mainly on football [4,12,13]. Finally, there is evidence of a drastic worldwide reduction in physical activity (PA) rates during the pandemic [14], increasing socio-economic differences in sport participation [15], modifying the type of PA and sports performed [16] as well as poorer physical and mental health associated with changes in physical and sedentary behaviour [17].

Nevertheless, there is a lack of studies considering the distributional effects of the pandemic and the resulting lockdowns on different sport sectors and industries in a country. Only general analysis about the impact on the entire sport sector has been previously considered [18]. This paper tries to address this gap and attempts to evaluate its effect, including that of lockdowns, on the sport and leisure industries. In particular, the current paper explores the impact of the COVID-19 pandemic on consumer spending and sport-related Gross Domestic Product (GDP) for the sport and leisure sectors of the UK economy. The methodological approach is based on the examination of the lockdown effects through the National Accounts and its subdivision into Satellite Accounts from the Office for National Statistics (ONS) [19] in the UK. Specifically, we apply the Sport Satellite Accounts (SSA) based on the existing Vilnius definition of sport used in the European Union (EU), the UK and Japan [20].

There is considerable added value provided by this study compared to past research efforts. Firstly, in the consumption evaluation, we compare the pandemic and lockdown impacts on 13 different categories of leisure activities, including sporting activities. To achieve this, we use the research framework developed by the Leisure Industries Research Centre (see Materials and Methods) but we enrich it with modern definitions and data provided by the Entertainment Retailers Association (ERA). Furthermore, to the best of our knowledge, there has not been construction of consumer expenditure on these lines for the period under consideration. Secondly, the contribution of the sport sector to GDP in 2020, when the lockdowns occurred, is analysed in detail using the UK SSA. It is certainly the first time that such an attempt is made for the sport industry as a whole during this period. Other previous endeavours have examined a particular sport (e.g., golf) but never the sport industry as a whole during the COVID-19 crisis. The European study (presented in the literature) on the effect of COVID-19 is based on very old SSAs for the year 2012, while the present study is based on the UK’s latest data. Furthermore, on the supply side, 14 different activities associated with the sport sector are analysed separately. As far as we know, it is the first time that a detailed analysis of leisure and sport sectors is developed in a country to estimate the impact of the pandemic on sport. Finally, we consider the wider definition of sport throughout many economic sectors. The effect of the pandemic on this definition of sport is unknown. What is more interesting is the extent to which sport deviates under these circumstances from the general economic performance, which is the first time it is established in the UK context.

The study has relevant policy and management implications as sports organisations must consider the changes of demand and produced output, as indicated by GDP, in circumstances of a pandemic. It is also important for policymakers as they must plan ahead with declining revenues from the leisure and sport sectors and extra demands on public finance. There is a need for a rethink about how sport is consumed [7] and the very nature of the sports industry [21] and this paper offers some suggestions. These implications and suggestions could be of interest to other countries as the economic impact of the COVID-19 pandemic has been felt globally in the sport sector.

The rest of the paper is organised in the following order. In section two, we review relevant literature on the economic impact of the COVID-19 pandemic and present our research questions. In section three, we present the data and variables used in the empirical part of the study. The results are presented in section four. Section five offers a set of implications and policy suggestions to support the sport sector in the context of the pandemic. Some concluding thoughts are outlined in section six.

2. Literature Review

In the UK, the value of sport was estimated in 2018 to be above 2% of the GDP [22], similar to European estimations shown in 2020 [23]. During the pandemic in the UK, lockdowns were imposed, with all sport events cancelled or postponed, as it happened in many other countries in the world [7]. The government eventually subsidised 80 per cent of the wage bill for private companies to survive the lockdown, including sport firms. This intervention temporarily prevented an employment declined in line with levels seen in economic activity. Most organisations that rely on sport and leisure, either directly or indirectly, closed or suspended their operations and many may never recover from the financial damages suffered. For example, according to the ONS, [24], during the initial lockdown, 25% of companies were unable to trade. The distribution of this percentage among different sectors was very uneven. The ‘Arts, Entertainment and Recreation’ sector, including sport clubs, reduced its economic activity during the lockdowns by 83.3%, for example. Sport also has a very close association with other sectors of the economy that fared very badly during the lockdown (mainly because of their reliance on human contact and movement). An obvious example is the ‘Accommodation and Food Service’ sector, which during the lockdown declined by 81.6%. These rates are clearly above the decline for the total British economy, which has been estimated to be 10% [1].

After the national UK lockdowns in 2020 and 2021, different studies have analysed the patterns of sport participation in the country. For example, Robinson et al. [25] have reported a negative impact on physical activity levels in April–May 2020, after the first lockdown. With a larger perspective, Sport England [26] has estimated that a year after the lockdown in England (the largest of the four UK home nations], there were 2.2 million more inactive English adults, with a greater impact on males, the youngest age groups and certain ethnic communities (Asian and Black). There has also been an unprecedented change in the nature of the activities in which adults participate, with a large increase in walking and cycling for leisure and a decrease across fitness, swimming and team sports. At the same time, the percentage of UK adults experiencing a significant mental health problem seemed to have risen by approximately 50% during the lockdowns [27]. Grix et al. [28] have analysed socio-economic inequalities in sports participation associated with the pandemic in the country. They have also provided a differentiation between active sport and sport spectating and referred to the wellbeing benefits through the community spirit generated by sport.

From an economic perspective, only some specific sport activities have been considered under analysis in academic journal articles. For example, Parnell et al. [13] and Clarkson et al. [29] describe the impact of the pandemic on English football, but without offering economic estimations. Some recent reports have found that vital income streams from fan spending on professional sports, travel, tourism at major events, TV broadcasting, and casual attendance at local facilities all collapsed within a matter of months. For example, a survey of grassroots football clubs in the UK has found that 12% of football clubs believed they would never financially recover from the pandemic, resulting in the closure of more than five thousand football clubs [30].

Other studies have considered other sports, in some cases using the SSA methodology. For example, the Sport Industry Research Centre at Sheffield Hallam University has estimated a substantial fall in Gross Value Added (GVA) and consumer spending in golf [31] for the year 2020. From a sociological perspective, Sorbie et al. [32] have analysed the golf club closures on well-being. They have indicated that playing golf on outdoor golf courses was positively related to a sense of belonging, enjoyment and wellbeing.

A line of research has underlined the link between sport and sustainable development, which is even more important in times of crisis and informs some of the policy conclusions in this research. For example, Kokolakakis et al. [33] have argued that the abolition of face-to-face delivery of sport services during the lockdowns created a need for clubs and organisations to transition to online methods as their only available avenue of connecting with sport participants and fans. Rapid changes were seen across the sector, with an explosion in digital offerings for people who wanted to remain active whilst living under lockdown conditions. Online classes, mobile apps, wearable technology, and social media channels aimed at tackling inactivity saw huge growth in popularity, with numerous private enterprises seeing levels of success that were not deemed to be realistic prior to the pandemic.

Many large sporting organisations, such as Formula-1, the Spanish “La Liga,” and The Grand National launched their own eSports events, broadcasted to millions of viewers worldwide, and the streaming platform Twitch saw a 70% increase in viewers during March–June 2020 [34]. This growth in online sport has subsequently produced a boom in online gambling, which increased tax revenue for governments, assisting the recovery from COVID-19 [35]. Kaplanidou et al. [36] have considered how the pandemic has affected consumers’ intentions to attend live sport events in the United States in the future, showing the negative influence of wearing masks and feeling scared.

Finally, from a methodological standpoint, many national and international studies have investigated the importance of sport in economic development using the SSA methodology. One of the key studies is the Pan-European SSA [37], which developed SSAs for each EU country and the UK. This study highlighted the importance of sport in terms of GDP (nearly 2.12%) and in generating employment across the EU (2.72% of total employment. In the case of the UK, estimations were 2.18% and 3.75% in terms of GDP and employment, respectively. Previously, Preuß et al. [38] in Germany, based on the German SSA, concluded that the economic value of sport was predominantly related to active sport participation and, to a lesser extent, to passive interest. This point, in relation to the pandemic (where the activity part is the one that suffers most) and the community dimension, suggests that sport at the community level may suffer disproportionately compared with the rest of the economy. Kokolakakis et al. [39] have described the main research findings in the EU studies about the economic value of sport in terms of GVA and employment.

More recently, the European Commission [23] have estimated the economic impact of the COVID-19 pandemic on the sport sector in the EU. The report quantifies the impact in different scenarios (from higher to lower), with an interval of −11.9 to −14.8 for decreases in the percentage of sport-related GDP in the EU-27 and of −12.6 to −15.6 for decreases in the percentage of sport-related employment. While these estimations are not disaggregated into many different sport industries, the impact is severe in sporting services (namely clubs and facilities), with a decline of around −21.5% to −26.7%, and accommodation and food services, with a decline of about −43.6% to −53.4%. In terms of countries, the European Commission data shows significant differences. Countries such as Germany, the UK, France, Italy, or Spain have suffered the largest estimated reductions due to the size of their sport sector compared to the overall economy. In the case of the UK, for example, estimations are between −16.7% and −21% in terms of sport-related GDP and between −16.2% to −20.5% in terms of sport-related employment. Nevertheless, the Baltic States, where the sport sector is traditionally smaller than other EU members, have been particularly affected by the COVID-19 pandemic, with marked impacts on the overall share of direct sport-related GDP. The number of lockdowns and their duration explain these differences in impact among the European countries. According to the estimations proposed by the European Commission, the average decline in all EU members (except for the Czech Republic) is at least −10%, higher than the estimations for the whole European economy.

With the literature review above in mind (i.e., [23,32,38,39]), the following research questions (RQs) were framed:

RQ1. Considering previous empirical differentiation between home and out-of-home entertainment [40] what are the manifested differences between consumer spending on home and out-of-home entertainment leisure activities during the pandemic in the UK?

RQ2. Is the decline of GDP generated by sport in the UK disproportionately larger than the overall economic decline?

RQ3. What is the exact scale of this decline, as this pattern may well be repeated if the economy faces similar circumstances in the future? What are the main sport industries affected by the pandemic? Are there different impacts among other leisure industries?

3. Materials and Methods

This section presents the data sources and methodology applied for the analysis. The first aim of the study is to establish a percentage change in the consumer spending pattern of sport and leisure by sector (home and out-of-home entertainment) during the lockdown produced by the pandemic in 2020. Secondly, we need to define our two main variables under analysis. The sport sector has been defined (as a set of economic activities embedded in the National Accounts) following the Vilnius definition, provided by the European Commission, previously described in the above sections [20]. According to the Vilnius definition, there are several ways to present the size of the sport industry in terms of GVA or GDP. In some cases, the ‘core’ of sport is examined—that is, sport organisations and leisure facilities; in others, a much broader definition of sport is used that includes sport education, health spending, broadcasting, sport financial products, and sport betting, etc.

The leisure sector has been defined following previous empirical analyses made in the UK by the Leisure Industries Research Centre (LIRC) [40], which differentiates between home and out-of-home leisure activities. The main categories for home leisure used by LIRC are the following: leisure in the home including video games and recorded music; entertainment hardware, including TVs and PCs; house and garden leisure expenses; and hobbies and pastimes. On the other hand, leisure outside of the home includes eating out; alcoholic drinks; local entertainment; gambling; active sport; sightseeing; holidays in the UK; and holidays overseas.

There is no direct link between the leisure spending of the first section and the sport GDP of the second. Leisure consumption includes sport consumption in its ‘core’ form, as described before, but the sport GDP is much more expansive adopting the broad Vilnius definition. The logic is that we consider the wider demand pattern around leisure and sport before proceeding to isolate sport. In this context sport GDP follows the official definition of GDP based on the generated surpluses and wages/salaries.

In terms of data sources, we have built a model with data inputs taken from ONS’s Consumer Trends [41] and Family Spending [42] as well as data provided by the Entertainment Retailers Association (ERA) in the UK [43]. As some of the sport industries are mainly globalized, we evaluated sport content in some categories, such as sports clothing or sport footwear, based on their import pattern. For this purpose, we used the United Nations (UN) Commodity Trade database [44]. The main hypothesis here is that the percentage of sport content in a commodity consumed in the UK would correspond to its sport content within imports. This is a reasonable assumption as most of the sport production on these items happens outside the UK. Finally, we need an assessment of how the COVID-19 pandemic affected the overall UK economy in terms of GDP and employment in 2020. Such estimates have been provided nationally by ONS [45] and internationally by the World Bank [1].

In terms of the methodological approach, we have estimated the impact of the lockdown in 2020 on the UK sport industry following the method developed by the Sport Satellite Account (SSA) approach. This decision is mainly based on the SSAs explicit links to other sectors of the economy. Hence, through SSAs, the evaluation of the impact of the lockdowns on the economy can scan all subsectors, even those that are not classified as a sport in the National Accounts of the UK. For example, the SSA approach considers and quantifies all activities included in the National Accounts that have any relationship with sport, such as sport-related tourism, sport-related financial services and sport-related gambling. Under the Vilnius definition, by using four-digit codes for economic activity, a total of 160 categories related to sport can be investigated. Consequently, the SSA method becomes the key to transforming any expected change of the economy into GDP change in sport. Further, the SSA approach follows the Vilnius definition of sport, broadly applied in many European countries and worldwide [37,39]. Finally, this method has been previously applied in the UK to quantify the relevance of the sport sector in the country [22] as well as the impact of the SARS-CoV2 pandemic in some sport activities [31], but never overall for the sport industry.

Another important tool in the analysis used is the ONS survey of business activity during the lockdowns [24]. To provide some context, the data presented in

Table 1. Share of industries continuing to trade, broken down by industry, UK, 23 March–5 April 2020.

Question: ‘What Is the Current Trading Status of Your Enterprise?’
Industry	Continuing to trade
Professional, Scientific and Technical Activities	96.2%
Human Health and Social Work Activities	95.6%
Information and Communication	94.4%
Transportation and Storage	92.3%
Water Supply, Sewerage, Waste Management and Remediation Activities	92.0%
Administrative and Support Service Activities	89.7%
Education	85.8%
Manufacturing	77.2%
Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles	72.8%
Construction	70.9%
Accommodation and Food Service Activities	18.4%
Arts, Entertainment and Recreation	16.7%
All Industries	75.4%

Source: (ONS, 2020) [24].

below show the percentage of industries, per sector, that continued to trade during the first UK lockdown.

The survey established that during the lockdown, 75% of all considered companies were trading normally in the economy. It divided the economy into very broad categories such as ‘Professional, Scientific and Technical Activities,’ and ‘Education,’ etc. Sport is not specified in isolation but (at least in its core element) is included under ‘Arts, Entertainment and Recreation’. Elements of the sport economy, as defined in the Vilnius definition, are included elsewhere: for example, there is sport involvement in education, construction, and accommodation etc. Hence, Table 1 in combination with the UK SSA can model the impact of the COVID-19 pandemic during a lockdown by following a two-stage process: firstly, by updating the results of the latest UK SSA for 2020 assuming no COVID (i.e., by simply applying the sport ratios suggested by the SSA on the economy) and secondly by reducing the components of sport activity in line with the general trends suggested in Table 1. From this point of view, information such as the one provided in Table 1 is of critical importance in terms of our methodology and as a starting point of evaluating the GDP generated by sport during the lockdown periods.

Furthermore, we need to model the temporal adjustment from the lockdown to relative normality in 2020. We applied the model of adjustment developed to analyse the impact of the lockdown in 2020 for golf [31]; however, the impact of the lockdown period is developed specifically for this article. Hence, we use this adapting mechanism to moderate the lockdown impact of periods of 2020 when a full lockdown was not applicable. The modelling was based on the evaluation of the effect of a lockdown on sport through the structure of the SSA. Throughout, we assumed that the ‘core’ of sport organisations (based on official information such as in Table 1) almost stopped operating; the same was assumed for the links between sport and tourism, recreation, education (outside schools) and accommodation. The remaining economic sectors, which are linked to sport, were reduced in line with economic expectations.

Because the analysis is based on the UK official SSA, it cannot be transferred to other sectors, such as hospitality or education, without constructing equivalent satellite tables. However, it is a suitable methodology for comparing sport in its wider definition (according to the Vilnius definition) with the overall economy, enabling us to draw conclusions about future economic and political challenges. Finally, the results imply causality in a strong sense as they follow specific government policy and business reactions. Table 1 for example is constructed focusing on business behaviour following the lockdowns, and this has been explicitly stated in the official data

To sum up, the following assumptions were used to estimate the impact of the UK lockdown—due to the COVID-19 pandemic in 2020—on the leisure and sport sector and based on the review of the literature, namely:

• A sharp decline in output during the lockdown period, followed by a gradual easing out of lockdown measures and a recovery phase that lasts a couple of months (as in the golf study).
• A return to normal levels of economic activity by September/October 2020 (conservative principle). That makes the current study almost a best-case scenario.
• ‘Core’ functions of sporting organisations reduce their activity almost entirely, with similar effects on links between sport and tourism, food services, and accommodation; remaining sport functions were reduced in line with economic expectations.
• For sport operators, a policy of postponed subscriptions (moving existing subscriptions into the future) is treated as no income during the lockdown period.

The results of the application of the SSA methodology, and the analysis of national databases as described above, are presented below.

4. Results

The results are presented in terms of the economic impact of the lockdown in 2020, because of the COVID-19 pandemic, on the leisure and sport sectors. We show the results for the leisure and sport-related consumption and the changes in sport-related GDP following the SSA methodology described in the previous section.

4.1. Impact of COVID-19 on Consumer Spending on Leisure and Sport

Table 2. Consumer spending on leisure (£bn), UK.

Activity	2019	2020	% Change
Video, Games and Recorded Music	7.8	9.1	16.7
Entertainment Hardware, TV, PCs and Other	24.8	25.7	3.7
Reading	6.7	6	−11.5
House and garden	18.5	18.7	1.2
Hobbies and pastimes	18.1	18	−0.4
In Home	75.9	77.5	2.1
Eating out	63.3	37.9	−40.2
Alcoholic drinks	58.1	47.4	−18.4
Local entertainment	10.7	6.3	−40.8
Gambling	14.7	14.9	1.3
Active Sport	23.1	15.7	−32
Sightseeing	2.6	1.6	−40
Holidays in the UK	15.8	8.9	−43.8
Holidays overseas	62.3	21.3	−65.8
Away from Home	250.8	154.1	−38.6
All Leisure	326.7	231.6	−29.1

Source: Authors’ elaboration from LIRC [40], ONS [19,42] and ERA [43] databases.

shows the consumer spending on leisure and sport in the UK, comparing the situation in 2019 and 2020. The table divides activities between ‘in home’ and ‘away from home’ activities, considering previous empirical evidence. Overall, spending on leisure declined in 2020 by around 29%. There is a strong differentiation between leisure at home and leisure outside the home. The former in 2020 increased in real terms by 2.1%, while the latter declined by 38.6%. Secondly, for the active sport sector, the corresponding decline was 32%. Active sport tends to rely heavily on human contact, because of which it has been disproportionately affected by the pandemic induced lockdowns, as other leisure activities based on human contact.

4.2. Impact of the Lockdowns on Sport-Related GDP

In the calculation of the impact of the lockdown associated with the COVID-19 pandemic on sport, using official databases provided by ONS (e.g., Consumer Trends, PRODCOM, and international trade data, etc.), we assumed that some sectors such as accommodation for sport tourism, food and services (for sport events), sport betting (on sport outcomes) and sport holidays, declined by 100% during the lockdowns. The cancellation of sport events and travelling means that such economic activity would be unlikely to occur during a lockdown period. Other sectors such as sport education declined according to the general pattern (in the case of education: 15%). When we ‘weighed’ these reductions through the structure of the Satellite Sport Accounts for the UK (UK SSA), we derived

Table 3. Lockdown effects on sport, UK, £m, %, 2020.

Industry	Lockdown Reduction in Sport (%)	Lockdown GDP Reduction	Sport GDP, Year (No Covid)	Sport GDP, 11 Weeks (No Covid)	Sport GDP Transition 14 Weeks	New GDP
Sport clubs, leisure centres	80%	1061	6316	1326	690	4565
Accommodation—sport tourism	100%	581	2768	581	378	1809
Sport construction	65%	180	1319	277	117	1022
Food and services	100%	358	1705	358	233	1114
Retail trade	60%	545	4329	909	355	3429
Management and administration	45%	160	1696	356	104	1432
Sport betting	100%	770	3669	770	501	2398
Wholesales	70%	257	1747	367	167	1323
Travel agencies	100%	121	576	121	79	376
Services (advertising, IT, and insurance, etc.)	45%	99	1046	220	64	883
Media	45%	213	2253	473	138	1902
Sport education	25%	248	4733	994	162	4323
Sport manufacturing	35%	263	3579	752	171	3145
Other	75%	612	3886	816	398	2876
Sums	–	5470	39,622	8321	3555	30,597

Source: Authors’ elaboration from SIRC [31], ONS [24,45] and UK SSA [22] databases.

below, showing a decline of the sport industry during the lockdown in the range of 65% to 70%, as it is shown in the first column. For the total sport sector, we estimate a GDP reduction during the lockdowns in 2020 of 66%, which contributed to a final decline of 23% in GDP for the year 2020, as we describe with more details in the following paragraphs.

As the first column illustrates, during the lockdown period, for example, the sport clubs and leisure centres had a reduction of GDP by 80%. For other sectors such as accommodation, sport GDP during this period was nil. These results are based on the information provided by ONS surveys (such as the one presented in Table 1) and club information. In the second numerical column, we estimated the total reduction in GDP associated with the lockdown in monetary terms, with a total of £5470m. In effect, the second column is derived from the information in the first and the fourth columns.

The third numerical column of Table 3 shows the expected annual GDP of the presented sport sectors (a year without COVID-19). For example, in the absence of the pandemic, we would expect the GDP contribution of sports clubs and leisure centres to be £6316m. The fourth column is the equivalent GDP during the 11 weeks (the duration of the 2020 lockdown in the UK). In, this column we applied the reductions from the pandemic, a total of £5470m, as shown in the second column. This, compared with the normal level of economic activity, implies a reduction of GDP during the lockdown of 66%.

A further reduction of £3555m was estimated following the assumptions described in Section 3 for a transition period of 14 weeks. The last column is the new GDP figure after the reductions from the lockdown and the transition are considered, showing an annual reduction of sport GDP of 23%

To summarise, it is estimated that in the UK economy, the decline of sport output during the lockdown was 66% in real terms. This sharp shock during the lockdown is responsible for generating a sport decline in output, during 2020, many times more severe than the forecast for the economy as a whole; overall sport declined during 2020 by 23%, more than twice the decline of the average sector of the economy, estimated to be 10% by official statistics [1].

5. Discussion

According to the World Bank’s Global Economic Prospects [1], ‘COVID-19 is the ‘most adverse peacetime shock to the global economy in a century.’ This study elaborates how this crisis has affected the UK sport economy in terms of consumer spending and GDP for the leisure and sport sectors. In the case of the UK, the decline in GDP over the year 2020 (using constant prices) was 10% [1].

5.1. Leisure Sector

Our results show that the COVID-19 pandemic and the lockdown in 2020 in the UK produced a greater contraction of consumer spending in leisure activities developed away from home than leisure activities developed at home. In general, our results highlight that the general decline in the leisure sector (−20.1%) is very uneven across different leisure activities. Particularly, leisure activities such as arts, entertainment sport and holidays, which depend greatly on movement and human contact, did much worse than the rest, with more than 80% of private companies in these sectors not trading during the lockdown in 2020.

Moreover, our estimations have shown that among leisure activities developed at home, there was an increase in consumer spending by 2.1% over the year. Even within these categories, there were declines in reading and hobbies, with all the increases concentrated in the areas of video games and recorded media (16.7%), entertainment hardware (3.7%) and house and garden (1.2%). Despite these conflicting issues, the evidence is sufficiently strong to answer our first research question (RQ1)—that between at-home and away-from-home leisure activities, the impact has been contrasting, also confirming previous evidence [33]. While in-home activities increased by 2.1%, out-of-home leisure spending declined by 38.6%. This finding can be reasonably explained from the amount of time people spent indoors and the positive effect that this change had on items such as sport equipment, TVs, and video games, etc. The declining sectors within home entertainment, especially reading, have been in a historical declining trend and hence cannot be totally attributed to the lockdown [40].

Finally, there was a disproportionately negative effect on out-of-home leisure, with a contraction in consumer spending by 38.6%. As before, this decline is uneven. The greatest declines happened in holidays overseas, holidays in the UK and local entertainment, which had a reduction in spending by 65.8%, 43.8% and 40.8%, respectively. Consumer spending on active sport declined by 32% over the year. Among all the categories of out-of-home leisure examined, only gambling increased in 2020, by 1.3%, as it was possible to engage in this activity without leaving the house. These results confirm previous studies described in the literature section [32].

5.2. Sport Sector

Our estimations, collected in Table 3, quantify the decline of sport-related GDP around 23% during 2020, while this decline reached 66% during lockdowns (by comparing equivalent time periods with 2019). The decline of 23% is more than twice the decline of the overall economy (10%), meaning that the private sport sector at least would be under great pressure facing declining profit margins, as it has been described previously in some reports and sectoral analysis for team sports [8,12,13,46], among others. Consequently, we can answer RQ2 affirmatively about the disproportionate nature of the decline in sport GDP in the UK relative to the general contraction of the GDP for the national economy as a whole.

Our estimations for the whole sport sector confirm previous evidence about the general effect of the lockdown on sport-related GDP [23], although our estimations offer additional information about different periods of time in 2020 and more detailed analysis for separate sport industries. Moreover, our results reveal that within the sport sector there are big differences among sport industries.

The most affected sport categories from the lockdown are related to tourism, accommodation, food services and sport gambling because all these businesses had to close for the lockdowns and there was no sport event to take advantage of the links of sport with those economic sectors. In particular, the problems for the sport sector can be identified in the following three categories:

• Sport and leisure facilities closed temporarily during the lockdown, generating no throughput or new income;
• Sport facilities still had to pay maintenance and basic expenses despite the lockdown (e.g., golf courses); and
• The sport sector is associated strongly with the accommodation, tourism, and recreation sectors, which also suffered disproportionately during the lockdown.

For these reasons, the decline of GDP experienced by the sport sector in the UK during 2020 was much greater in some sport industries than in others and allowed us to answer the questions raised by RQ3, respectively.

5.3. Policy Suggestions

Our findings raise questions of the possibility of sustainable development during a pandemic, which is something that we may have to face again in the future. As mentioned before, a 10% recession puts huge pressure on profit margins. Many companies cannot survive without public support following the lockdowns suffered in 2020 due to the COVID-19 pandemic. In the case of the sport sector, a single-year recession of 23% presents a huge threat to company survival. Some policy proposals developed from existing sustainability research and applied in the field of sport economics are discussed below.

5.3.1. Public Investment to Overcome the Emerging Inequalities

Increases in public funding for community sport and recreation, if sustained with base funding (rather than short-term and grant-based funding) and targeted at populations at risk, are likely to result in increases in participation and sustained health benefits. These are likely to reduce costs for publicly funded services related to health and social care. Examples are indirect financial support to vulnerable groups or children in the form of vouchers for community sport [47].

5.3.2. Public Investment Targeting Information and Communication Technology (ICT)

ICT development can affect both sport education (one of the biggest sources of sport-related GDP) and avenues for participating in physical activities, especially during the COVID and post-COVID era, which, as we described, have experienced a drastic decline in 2020 in the UK [48]. The long-term key to the recovery of the domestic sport markets is the maintenance of sport participation rates. Digital services can help support access to physical activity and sporting opportunities. In terms of economic recovery, eSports present an opportunity for sport organisations and clubs to leverage services away from their traditional offer to broaden audiences and provide new revenue streams. Hence, addressing the issues of digital technology in sport would help to meet the needs of societies and generate employment during and following the pandemic.

5.3.3. Relief Packages to Boost the Sport Industry

Short-term relief packages would be required to boost the sport sector during pandemics. In the UK, this was achieved through National Lottery funding. For example, £195 million of funding was provided by the government and the National Lottery for immediate and long-term support to the sport and physical activity sector, ranging from financial support for local sports clubs to funding new and innovative ways to keep people active and getting back to business after the pandemic [49].

5.3.4. Tax Breaks

As sport relates to broader economic activities such as tourism and accommodation, tax breaks for events that would be major attractions for tourism can indirectly increase tax revenues. Tax breaks can be a means to help recover the sport industry. In the UK, tax reliefs are offered to sports clubs seeking finance, whereby investors who receive the reliefs can claim a percentage of the amount they have invested against their income tax liability [49].

5.3.5. Reinvesting Sport Related Budgetary Surpluses

As evidenced by several economic studies [22,30] strong grassroots sport and consumer demand for sport have led to positive impacts on public finances. The construction of small inclusive and family-friendly facilities can attract latent sports participants and give confidence to non-participants to participate in sport. Government policy on reinvestment of net broadcasting revenue in grassroots sports and equitable distribution of funding away from elite leagues and into the lower tiers and the grassroots would all help support sport participation. An increase in participation, particularly with new participants who have the tendency to purchase more sports consumables, would lead to higher consumption of sporting goods and services and thus to greater budgetary surpluses [50].

5.3.6. Support for Social Enterprises and Volunteers

The sustainability of sport can be achieved through financing and collaborations between private and public agencies, for example, through the use of social enterprise and the utilisation of the volunteering sector to address the needs of the community [8]. A social enterprise is usually defined as an enterprise using market-based solutions to raise capital for reinvestment into local communities or to address a specific social issue [51]. According to the Department for Digital, Culture Media and Sport in the UK [52], social enterprises are more active in generating finance and surpluses more easily than a typical commercial business, which are characteristics much needed post pandemic.

5.3.7. Long Term Financial Solutions

For long-term financial sustainability, countries should consider developing long-term bond markets, where typical borrowing bears smaller interest rates. An example is Greece’s five-year bond yield, which fell below zero for the first time in June 2021 after the European Central Bank’s decision to maintain the pace of its asset purchase programme. Meanwhile, all companies, including multinationals and those in the sport industry, should pay taxes to the governments of countries where economic activity occurs and value is created, in accordance with national and international laws and policies. At the G7 Summit in June [53], a deal was reached to make multinational companies pay more tax in the countries where they operate businesses, and a global minimum corporate tax rate of 15% was agreed to in principle to avoid countries undercutting each other with low tax rates. The inflow of tax would help the UK government pay off debts incurred during the pandemic.

6. Conclusions

Evidence about the long-term impact of the pandemic on sport and its sustainability in the future is only now beginning to emerge with great intensity. We still ignore what sport will look like following this pandemic as we simply do not know if this pandemic will be over or will become a regular fixture in life in the following years. This paper concludes that sport-related GDP in the UK during the 2020 pandemic showed a decline of 23%, with a maximum contraction of 66% during the lockdown period, with significant differences among sport industries under analysis. The severity of this decline compared with the state of the UK economy overall implies that the profit margins would be put under pressure and the sport sector needs to prepare for such an outcome.

Future Research Directions

This research could be extended to investigate the impact of the COVID-19-pandemic-related lockdowns on different social groups of the community. It has been widely reported that the COVID-19 pandemic exaggerates the existing inequalities in the UK, with people from poor backgrounds and ethnic minorities being more at risk [26]. From this point of view, it would be interesting to investigate how the COVID-19 lockdown has affected sport in terms of consumer spending and participation in these specific categories. Furthermore, analyses about the extent to which sport will be global in the future could be a question of interest in the context of new limits based on health parameters and social distancing requirements. Finally, the way in which governments and policy-makers would place value on sport and prioritise financial support to different sport activities and subsectors in different countries might require further studies, following some research questions emphasized by Evans et al. [21].