INVESTMENTS

This may just be the start of a process that will attract other interests into the sports industry. But who are these potential entrants? My money is on the brewers

Sports and leisure industries have come a long way in a short time since soccer clubs were simply seen as a way for self-made millionaires to buy a reputation as sportsmen and philanthropists, while rugby and cricket clubs were run by the kind of boring old farts who briefly deprived Will Carling of the England rugby captaincy.

These games are all now highly money-conscious, at the top level at least, they are increasingly profitable and the top clubs are suddenly being seen as profit centres.

Look at some of the changes just over the past few weeks. Premier football clubs are awash with BSkyB money, sending the shares of the handful of quoted clubs rocketing; rugger has gone professional, and the rush is on to divide up the spoils. England has been thrown out of the Five Nations Championship for hogging the cash from Sky, the leading clubs are hunting sponsors to finance the massive transfer fees needed to assemble a successful team and support the enormous wage bills involved.

Rugby League is considering converting to a summer game to secure a commercial niche for itself, but at the same time the two rugger codes are debating whether to cooperate or compete head on for the cash they need to pay top dollar for a limited pool of professional players.

In the North-east, entrepreneur Sir John Hall is building a portfolio of sports clubs which already includes Newcastle Gosforth and Rob Andrew, as well as Newcastle United, and other rugger and football clubs like Wasps and Queens Park Rangers are considering whether to pool resources.

And all of that is apart from some well-known clubs deciding to expand their sporting achievements, Glasgow Celtic, for example, with the launch of its own personal equity plans and Manchester United with its own brand of whisky.

The current wisdom is that more clubs will join in these fashionable developments. Sheffield United is the latest club to think of going public, while Luton is looking round for a partner to help it build an Astrodome over its Astroturf pitch.

But whilst we are all looking in amazement at the financial melange that is now British sport, we should take care to look behind the scenes and see if there are any voracious predators who just might take this opportunity to come in and devour some of these burgeoning assets.

Recently we saw a "City" consortium make a move towards Leeds United, and their intention was probably not just to try and ensure their priority application for season tickets at Elland Road next season.

This, in my view, may just be the start of a process that will attract other interests into the sports industry. But who are these potential entrants? My money is on the brewers. Many household names that we remember as brewers with chains of pubs have undergone a most remarkable metamorphosis into leisure. For example, Whitbread now owns Pizza Hut and TGI Friday, they have Marriot hotels and now David Lloyd leisure centres. It is almost comforting to hear that they also do still make some beer.

Other well known names like Bass, Scottish & Newcastle and Grand Met seem to have gone down similar paths. I don't believe it is just a vain search for corporate diversification, but rather we are seeing a change in the structure and style of the leisure industry reflecting our changing attitudes and demands.

For example, it seems that we are now more health-conscious, (although I know some notable exceptions) but at the same time we still enjoy and demand our less healthy pleasures.

Also after the recession of the early Nineties, such expenditure as we allowed ourselves provided us with modest pleasures in comparison with those hedonistic Eighties. Our holidays were closer to home and our leisure activities less grandiose.

Even with a slowly increasing level of disposable income we are spending more money on domestic leisure pursuits. Consequently, the old brewing combines have targeted our expanding demand. This may now be going a stage further. Cafes, hotels and fitness clubs may be one thing but I wonder which one will take the plunge into real sport?

The first sign was sponsorship, with brands emblazoned across this month's fashionable strip. Thereafter the involvement could be greater. Buying a club? Well possibly, but in fact I certainly expect one of the large leisure combines to take the initiative very soon and develop the UK's first Astrodome sports centre.

Fantasy? Maybe, but the current changes in sporting structures, coupled with increasing supporter demand and fuelled by increasing advertising revenue, makes this a truly viable opportunity.

The new "astrodome" would consist of a compendium of sports, leisure and games, from soccer to saunas, from athletics to alcohol, from rugger to restaurants, from concerts to croquet - the combinations are endless. Although this is what many a club chairman may be dreaming of, it may well need the backing and know-how of the leisure industry operators to make it happen. Whether it is through the imagination of Mr Branson, or a combination of popular brands from a Whitbread or Bass, there seems to be an opportunity here.

In the same way that visiting shopping malls has turned into a form of weekend leisure, so too perhaps with sports. The family visit to the shopping mall will be expanded to the family day out at the sports complex. Whether it is the children practising for the school sports, father searching for his Arnie Schwarzenegger physique in the gym, or mother just toning up with a cappuccino, all will be catered for.

In the evening the sports events will continue along with concerts and carnivals, there will be no escape from the pleasure dome. So perhaps unfit ageing rockers like me won't feel so guilty about going along to see The Stranglers if I have just spent two hours in the gym!

Justin Urquhart-Stewart is Business Planning Director of Barclays Stockbrokers