Against all expectations, Leicester City won the Premier League title yesterday. Analysis from UK teams’ past sporting successes reveals that Leicester’s economy could grow by twice that of the national average
According to research carried out by a business data website Company Check, Leicester’s business community is in for rapid growth.
In what is essentially a football fairytale, Leicester City FC came out on top this year in the Premier League. At the start of the season, Leicester were 5,000 to 1 with bookmakers to win the league, a wager taken up by only 12 brave football fans. Even three months into the season and with Leicester steadily edging their way to the top of the table, they were still 1,000 to 1 to win it.
It is only in the last few weeks that their success had dawned on the general public. This is a club whose previous highest league position was a runners-up spot in 1929, who have been relegated or promoted 22 times in all. And as for the east Midlands city the team calls home, it’s the 11th largest city in the UK. Yet the business community has been chugging along without much in the way of disruption or headline-making innovation.
This may change overnight, according to new research from Company Check.
Sporting success and business growth
The analysis, which has been reviewed by Sheffield Hallam University’s Sports Industry Research Centre, looked at the total number of businesses trading in other UK regions before and after unexpected sporting achievements.
In Bournemouth, where the football team earned promotion from League Two to the Premier League between 2010 and 2015, the total number of businesses in the town grew by 15 per cent in 2011 after the first promotion, compared with 9 per cent for the UK as a whole.
For the two years after that, the business count was up 11 per cent and 10 per cent respectively, against the national average of 6 per cent a year.
In Swansea, where the football team achieved promotion to the Premier League in 2011, research carried out two years later showed that this added £58 million to the local economy.
“Leicester’s achievement this year is without precedent in Premier League history, so accurately predicting the likely economic impact on the city isn’t easy,” Alastair Campbell, founder of east Midlands based firm, Company Check, said.
“However, by analysing business numbers in other areas like Bournemouth, another place where a football team had sudden and unexpected success, it’s been possible to demonstrate that footballing wins are often followed by a business boom.”
Leicester’s ups and downs
Company Check’s analysis took full-year accounts for all UK postcodes for the years 2010 to 2014. In the city of Leicester, the number of new businesses grew by an average of 3 per cent a year, well below the UK’s 7 per cent yearly growth due to a 12 per cent year-on-year fall in Leicester between 2013-14.
However with Leicester Football Club winning the top flight title for the first time in its 132-year history, the city’s business community is gearing up for growth.
Company Check’s Campbell added, “Whether the football team’s achievements led to the economic growth or vice versa is another matter! We’ll have to wait and see whether Leicester can replicate this over the next few years.”
Not a guarantee
Professor Simon Shibli, head of Sheffield Hallam University’s Sports Industry Research Centre, said: “Sporting success can be a catalyst for business growth, but it’s by no means guaranteed. The economic impact of football is an interesting one.
On one hand, it’s only 19 home games in a season and the economic impact of visiting fans tends to be cancelled out on away matches. Most of the global television coverage is about the sport, not the city, but nonetheless there is huge value in the ‘place marketing’ effect resulting from the EPL being televised in around 200 countries.
“Leicester has achieved great things and all coverage will be positive. For England’s 11th biggest city that’s some achievement. From a business point of view, Leicester City Council needs to turn sporting success into business and human interest stories that promote economic growth. For this to be successful they must align their messages with corporate objectives.”
Boosting business morale
Sarah Harrison, City Centre Director for Leicester City Council, said: “The success of the football team this year has given the region the most amazing exposure. We’ve got a proud, 2,000-year history here in Leicester and this sporting Cinderella story gives us a fantastic opportunity to showcase the best the city has to offer, finding new ways to encourage visitors to stay for longer.
“Tourism is an important sector in the region currently worth £1.57 billion. We’ve seen growth in international and national visitors since the discovery of the remains of King Richard III and now that Leicester City has qualified for the Champions League, we’ll see many more visitors from Europe.”
Businesses in the city have also been getting behind the football team.
Andrew Horner-Glister, owner of Leicester-based motorcycle company MCA, said: “There’s a buzz around the city at the moment and an excitement that I’m sure is down to the football. Everyone’s talking about it, even people like us who prefer bikes to footballs!