Investment increasing: Government’s commitment to sports opens up opportunities for the private sector

 

Despite 20 years of perceptions as an unsafe place for foreign sports teams to visit, Colombia has performed strongly in terms of sport results achieved at the regional level in the past decade. Improved security conditions have increased access to sporting venues and boosted opportunities for participation, not to mention more investment, especially via the public sector.

BUDGET: In 2013 the government allocated a budget of COP388bn ($232.8m) to the Administrative Department of Sport, Recreation, Physical Activity and the Use of Free Time (El Departamento Administrativo del Deporte la Recreación, la Actividad Física y el Aprovechamiento del Tiempo Libre, Coldeportes), which is the national entity responsible for the management and promotion of sports. The vast majority of this amount, some COP364bn ($218.4m), is exclusively destined to investment in infrastructure development and training, helping the country to become a leader within Latin America in terms of facilities and athletes.

While the Colombian sports industry is still dominated by football and cycling, increasing public sector investment in a broader sports infrastructure is expanding opportunities to other areas and improving the country’s position as a potential organiser for major international events. Public investment in sport increased in the run-up to the 2010 South American Games in Medellín. The local and regional governments invested $150m in infrastructure and created a $22m fund to prepare local competitors. Progress at the international level for Colombian athletes gained traction at the 2012 London Olympic Games, with a record haul of eight medals, ahead of Mexico (seven) and Argentina (four) and Venezuela (one). While public sector investment has been promising, the private sector has been more reticent, and has mainly focused on sponsoring household sports and athletes. This is likely to change now that the basis of professional sports development, aside from football, has been established.

INFRASTRUCTURE: The expansion of sporting facilities that has taken place over the past 60 years has focused primarily on the development of recreational and professional space to play the number-one sport, football. As per the “Sporting and Recreational Scenarios Census” conducted by Coldeportes in collaboration with the National Statistics Department in 2010, Colombia had 218 public football pitches nationwide. The study did not include Bogotá, which has the largest number of football pitches in the country. At the professional level, in order to host the 2011 Under-20 FIFA World Cup, local governments together with Coldeportes invested COP200.54bn ($120.3m) in upgrading eight stadiums nationwide (Bogotá, Medellín, Barranquilla, Cali, Cartagena, Manizales, Pereira and Armenia) to a standard fit to be accredited by FIFA. The body is currently working on the refurbishment of another three in Neiva, Ibagué and Santa Marta.

INVESTMENT: So far, investment in football facilities has predominantly been made with public capital, as most teams do not have sufficient financial capacity to build their own stadiums. The only team that has built a ground is Deportivo Cali, now the city’s top football team following the crisis suffered by América de Cali.

The latter, historically one of the country’s leading football clubs, was being financed by drug traffickers from the Cartel de Cali, which brought the club infamy as well as inclusion on the Specially Designated Narcotics Traffickers list, also known as the “Clinton List”, a blacklist of companies that are tainted by drug money.

While Deportivo Cali has built Colombia’s first and only private stadium in the town of Palmira, Juan Carlos Peña, the deputy director for Coldeportes, expects this to become a growing trend in the future. “Ticket sales are losing force as the main income for football teams, while food sales and television rights represent more significant revenues,” he told OBG. “This leads us to believe that, as teams strengthen economically, they will build their own stadiums in the future.”

GROWING PROWESS: Colombia has also been traditionally strong in cycling. The country has nine professional cycle tracks, located in Bogotá, where there are two, Barranquilla, Bucaramanga, Pereira, Medellín, Cali, Ibagué and Arauca. However, it has only recently begun to turn heads internationally. In October 2012, Cali hosted the first test of the Indoor Cycling World Cup, which also had stops in Mexico, the UK and Belarus. Colombian cyclists have begun to gain prominence on the global stage. Nairo Quintana, from the central region of Tunja, finished second in the 2013 Tour de France.

There is also a significant tradition in roller-skating. In fact, the Andean country was world champion 11 times between 1996 and 2012. “Colombia has more skating rinks than any other country in the world,” Andrés Botero Phillipsbourne, director at Coldeportes, told OBG. The country had 123 rinks in 2010 (not counting Bogotá), according to a Coldeportes census.

Although sport infrastructure has grown substantially, Colombia’s top athletes do not have enough facilities for high-level training. The country only has one high-performance centre, which is located in Bogotá. “The centre, of 36 ha, has a very sophisticated infrastructure, able to compete with any centre in the region,” said Peña. While a complete sports complex was developed for the World Games Cali 2013 held in July-August, a multi-sport event for disciplines not contested in the Olympic Games, and other cities are home to quasiOlympic units, like Medellín’s Atanasio Girardot Stadium, development opportunities are still numerous.

SPORTS FOR ALL: Coldeportes’ development plans, together with those from local entities, give priority to the development of popular and recreational sport. Colombian law requires that all municipalities build at least one recreational location – a multi-sport complex – for public use. As a result, more than 54,780 centres have been built nationwide for recreation and sports, including 8135 that accommodate both, as per a Coldeportes 2010 census, which was the most recent set of figures available. Apart from this, local governments continue to build additional facilities, including children’s parks, tennis courts and outdoor fitness areas within public spaces. Local governments of major cities are working to promote sports that are traditionally played only by the elite, such as tennis and golf. For a greens fee of COP25,000 ($15), Bogotá residents can play a round at either of the city’s two public golf courses.

The government is not alone in promoting sport. Compensation funds, entities in charge of the administration of social security benefits, have built both social and sports clubs for their members. Within the various government sports programmes, Supérate, “excel yourself”, gives children, young people and adults aged from seven to 28 the opportunity to compete at various levels (school, municipal, departmental, regional and national) in a wide range of sporting disciplines. The programme is funded by Coldeportes and offers about 120 scholarships worth COP40m ($24,000) each for higher education programmes to winners, as well as over 136,000 economic and material incentives to participants. The scholarships, which Coldeportes offers in partnership with the Colombian Institute for Student Loans and Technical Studies Abroad, an organisation dedicated to promoting higher education through educational lending, are free only if the student successfully completes his or her studies.

EXPERTS NEEDED: Colombia has about 25,250 graduates in sport, including physical education and sports administration. While the country’s higher education institutes offer at least 32 programmes in recreation, training and sports administration, there is a significant shortage of professionals in various fields. According to Coldeportes, there is a lack of sports training specialists, experts in physical activity at work, physical geriatric activity, municipal sports administration, basic sports training, outdoor sports, extreme sports and sports promoters, among a long list of specialists that are difficult to find in the country.

Similarly, the introduction of sport as a subject of instruction in public schools has led to a rise in demand for specialists in sports science, including biomechanics, psychology, physiology and sociology. Coldeportes is working together with the Ministry of Education to fulfil the goal of placing one physical education teacher in every public school in the country. To date, both institutions are working towards this and signed the 497 Framework Agreement in August 2011, which provides the basis for inclusion and promotion of sport as part of the educational field. The 13,126 official public schools In Colombia means there is a need for the same number of physical education teachers. This is both a challenge for the education sector and an opportunity for specialists in training sports teachers.

FOREIGN INVESTMENT: With a growing sport infrastructure and an increased number of qualified athletes, the investment appetite for sport is becoming more evident. The first visit of the-then Emir of Qatar, Hamad bin Khalifa Al Thani, to Colombia in early 2013, resulted in the signing of five memoranda of understanding, one related to sport. Coldeportes and the Colombian Olympic Committee agreed to cooperate for four years with the Qatar Olympic Committee in the development of different fields, including sport programmes for disabled people, sports medicine, doping control and management, and the maintenance of sports facilities and training camps.

Meanwhile, private companies operating in Colombia have begun to see sport as an attractive subject for their corporate social responsibility programmes. One example is the campaign developed by Samsung Technology under the name “Samsung plays for Colombia”, which supports young football talent by providing them with sporting materials and economic support for their training. The four-year programme runs in partnership with the Colombian Football Federation.

GOLF: One of the most attractive sports in terms of investment at present is golf. The sport is already promoted in some regions as an attraction for foreign tourists. There are currently 50 courses distributed in Bogotá, Cali, Medellín, Barranquilla, Cartagena, Bucaramanga and the cities of the “Coffee Triangle” ( bestknown as the Eje Cafetero). Proexport, the agency responsible for promoting investment in Colombia, considers golf an additional attraction in the organisation of conferences, seminars, incentive visits and exhibitions related to sport. The country has already hosted classic competitions such as the PGA Nationwide Tour, which included a stop in Bogotá in 2010 (the first time the event took place in South America), the Tour of the Americas, the Canadian Tour, the European Challenge Tour and the Pacific Colombia Tour.

In addition to a range of investment opportunities from specialised training to the promotion of particular sports, the most popular sporting disciplines are currently experiencing improved levels of sponsorship, a consequence of their higher visibility domestically and internationally. A number of Colombian sports clubs and athletes are viewed as a platform to promote brands and products, and investments in sponsorship deals is expected to continue to grow (see analysis).

GOOD HOST: Colombia was mostly left out of the regional sporting scene until 1971, when Cali hosted the Pan American Games. These set the tone for Colombia in the organisation of multi-sport events, as they managed to bring hitherto unknown sports disciplines to the country as well as foreign specialists that contributed to professionalising them. However, after Medellín was home to the 1978 Central American and Caribbean Games, the country was immersed in a threedecade dark period, coinciding with the emergence of drug cartels and the intensification of guerrilla warfare. Colombia recovered its role as an organiser of international events in 2005 by hosting that year’s Bolivarian Games, which, together with the Central American and Caribbean Games held in Cartagena in 2006, gave the country a place on the regional sporting map again.

Probably the largest sports events held in Colombia to date were the FIFA Under-20 World Cup in 2011 and the World Games 2013 held in Cali July 25-August 4. The latter was the first time a Latin American city has staged the event. Cali, the capital of the Cauca Valley, made public-private investments of $720m in infrastructure alone in preparations for the games.

On July 4, 2013 representatives from the city of Medellín met in Lausanne, Switzerland with the International Olympic Committee (IOC) as part of the city’s bid to host the 2018 Youth Olympic Games. At the final round of voting, the IOC awarded the slot to Medellín’s competitor, Buenos Aires. The Colombian city had made public investments worth COP5bn ($3m) over the yearlong promotional campaign. Juan Camilo Quintero, director of the candidacy attempt, told OBG, “Sports have played a crucial role in encouraging social inclusion in Medellín. Some 3800 young people have chosen sports as an alternative to conflict and drugs and train regularly in the city’s sports complex.” Despite not winning the bid, investment has contributed to the transformation of the city, Quintero said. If the IOC had given the games to Medellín, the city was prepared to invest a further $170m to build an Olympic Village and to upgrade its sports facilities.

Botero told OBG, “Medellín has a vibrant history and is a shining example of how sport can play a key role in social transformation. This project has encouraged a substantial investment in the city, which has developed very interesting public policies in the last decade with emphasis on the development of youth through education, sports and culture.” Investment in sports infrastructure should help international sports bodies at the very least to consider including Colombia as a potential host for events in the near to long term.

OUTLOOK: With a sports infrastructure in a constant process of improvement and in light of the significant effort undertaken by public entities in charge of promoting sports at all levels – national, regional and municipal – sport has not only become a vehicle for social inclusion in Colombia, but also a budding industry contributing to economic development.

Coldeportes’ ambition is to popularise sport at all levels, allowing industries that go hand-in-hand with sport, such as textiles and nutrition to take advantage and grow. If the public sector maintains the rising trend in investment and continues to work for Colombia’s bids to host global events, private capital inflows in sports will most likely continue to grow in the coming years.

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The Report: Colombia 2013

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