(Exerpts from an address by Kevan Gosper, AO, to the 2010 Annual Sporting Goods and Sports Industry Conference at AAMI Park in Melbourne on October 26, 2010.)

In the first week of this month we had in excess of 90,000 people in the MCG, a tad down on the 100,000 the previous week, witnessing an extraordinary replay of the AFL Grand Final, a record 84,000 spectators in the reconfigured Sydney Olympic Stadium to watch the outcome of the NRL Grand Final, and in excess of 150,000 people between Melbourne and Geelong observing the last day of the first Road World Cycling Championship to come south of the equator. Not bad. And not exactly sad for your industry. This is Australia, one of the great sports loving countries on the globe which continues to punch above its weight on every sporting front for which you happen to be one of the deserved beneficiaries.

I understand that the theme of this Conference flows in part from the Crawford Report, which I should say failed dismally in its understanding of the contribution Australia's performances at World and Olympic level adds to our international reputation and the inspiration it generates at home for our young talented athletes; and the Australian Government "Pathways to Success" response.

USOC President, Larry Probst, in Mexico last week displayed a recent American poll focussing on athletes as role models, which demonstrated a far higher rating for Olympians over national professional athletes in the sports of football, baseball and basketball. Both reports concerns for the diminishing participation of young people taking part in active sport is however well taken. The International Olympic Committee has persistently advocated for the reintroduction of physical education into the primary and secondary school curriculum and for increased teacher oversight of after hours and week end sports activity by young people ....

What I've learned most as an Olympic sports administrator and in active co-ordination roles with the Sydney 2000 and Beijing 2008 Games aside from oversight of major sporting events since Melbourne 1956 is the extraordinary reach of sport into almost every aspect of life; from government at all levels, public works - roads, bridges, hospitals, building structures, venue design, airports, underground rail, transport, technology, media, security, law enforcement, marketing, entertainment, sporting equipment, just to mention a few. In addition I've also come to recognise that sport is now a mature industry derived from a long history of steady growth - particularly over the past half century.

Against this background and to provide a tighter framework for some observations on the new "Directions of Sport" I will focus on high performance competitive sport, and after a personal reflection on some past platforms of sport's path to maturity, offer some thoughts on the future which may hopefully contribute to your own deliberations on new opportunities for your industry. In tightening the focus further, given that in less than two years London will stage its third Olympic Games I'm going to take its second Olympic Games in 1948 as my start point.

Looking back it would be easy to summarise the changes of the past fifty years in all respects, from the playing surfaces, the venue configurations, the footwear, the attire, the equipment and apparatus, the growth of global competition, the shift to professionalism, the growth scale of sports reporting, to conclude that changes across the sports landscape have been revolutionary. The fact is, however, that almost all of the changes in the past affecting sport have gradually occurred over this time, having essentially been a response to political, social, economic and technical change taking place across the globe. Simply put, all matters concerning sport and its development are necessarily a reflection of society at any one time and the rate of change has been evolutionary ....

It would take more than the time I have been allocated today to describe the extent of change in some of the many other Olympic and non Olympic sports: for example replaceable grass pallets, synthetic hockey playing surfaces, the wave-free swimming pool, the disc cycling wheel, the design of safety helmets, aluminium replaced by fibreglass in vaulting poles, sand pits abandoned for elevated sponge rubber mats, not to mention tennis racquet design and string tensions, clear fencing face masks, timber to fibreglass rowing hulls, protective boxing headgear, laser rather than bullet shooting, archery equipment and, of course, neck-to-ankle swimsuits. And I have said nothing about technical innovations with equipment and events relating to Winter Olympic competitions. All of these changes in sport were evolving on the back of those occurring in wide-ranging unrelated industries, driven by social and commercial demands.

Add to all of this the quite steep changes in information technology, communications and governance which have contributed enormously to the advancement of global sporting competition.

The point of these personal flashbacks on the events which have influenced the direction of sport in the past fifty years is to again observe that these changes have been evolutionary, not revolutionary. It has been change which has evolved over time mostly stimulated by external forces with the hard core of the majority of sports adapting and exploiting the opportunities that had the potential to promote sports entertainment to new levels of public interest.

So where do I see the road signs for future or new directions in competitive sport.

1. The need to engage young people

And by this I mean young athletes to identify their interests, ideas, whilst recognising their growing expectations for a greater share in sports generated revenue.

Whilst levels of consultation between sporting stakeholders have dramatically improved over more recent times it's surprising how little real research until now has gone into the patterns of behaviour, views and expectations of young competitive athletes. The IOC had to work very hard to gather basic data in support of its decision to introduce the Youth Olympic Games concept successfully launched in Singapore this August. This important initiative is designed to embrace younger people earlier into Olympic competition and expose them to Olympic values in their formative years. Also whilst we read of some quite startling levels of income of a very exclusive group of great athletes like Roger Federer, Tiger Woods, the Williams sisters and David Beckham deservedly earned through competition prizemoney and endorsements, there are a huge number of male and female world class competitors across a range of sports who in the future will look to a greater share of the cake which traditionally goes to event organisers, Sports Federations, broadcasters and the sports marketing industry in general.

Whilst still on the subject of youth. There is little I can add in underlining the ongoing business importance to this audience of the youth sports apparel market. Nike associated itself with the "coolest" sportsman on the planet, Michael Jordan - who by the way, like myself was an alumnus of Michigan State University - a ‘Spartan'. Teenagers and ‘would bes' have ever since scrambled to wear Nike trainers, caps, T-shirts and hoodies. By aligning themselves with young, fit, high profile elite champions like Bo Jackson, Tiger Woods, Rafael Nadal, Roger Federer, the Williams sisters, Nike has forged its reputation among young people. Their sales of replica apparel defies imagination. And much the same for Addidas with their colourful footwear and clothing which after all these years continues to make a powerful statement.

2. The entertainment factor

Most sports already well understand the importance of delivering entertainment from the field of play or indeed between competition schedules. Competition rules are continually revised to speed up play, heighten the drama of the contest and remove lack of clarity in scoring and umpire decisions; the third umpire, hawkeye for example. Playing surfaces have changed colours as have tennis and cricket balls, and with enhanced night lighting, schedules of play have been altered for better audience attendance and prime time television viewing. Juan Antonio Samaranch was a driver of encouraging Olympic sports to raise the level of entertainment through the use of colour, changes to equipment and rules of play. "If your sport does not appeal to the television viewer you will have more empty seats in the stadium, less interest from young people and you will risk going out of business". Corporate sponsorship and merchandising revenues simply depend on the entertainment appeal of a sport - and I've not mentioned the growth of cable TV in sport.

3. What Sebastian Coe describes as "Travelling Together"

This concept centres on the need for sponsoring partners and especially major brand sporting goods providers to become more fully involved with their sports clients in the wider issue of Codes of Practice, governance, environmental and sustainable conduct. For example, if a sports body, team or individual is defending its position for good purpose or taking steps to resolve a reversal, the partners need to stand by their client and the reverse position should similarly apply. Seb, one of our all-time great middle distance Olympians was in Mexico last week addressing an important Olympic meeting on London 2012 progress. President of London 2012, he is also on the Advisory Board of Nike Worldwide. Whilst there, I was unashamedly picking his brains for anything to add to this address and he was very strong on this issue. "It has to be a committed team effort between sponsors and their brands and sports bodies in good and bad times", he said, adding that BP continues to be a valued national sponsor of London 2012 notwithstanding the disastrous "Deep Horizon" event. In the August edition of Sports Business International he said "BP were with us during the Bid and now they are with us as partners during the delivery phases - the oil spill does not make a difference to us at all".

4. ''Sleeping with the enemy"

All anecdotal evidence and research points to the pre-occupation by today's youth with technology - i-pods, video games and social media such as Facebook and Twitter as being the real challenge to the time they would otherwise devote to competitive and recreational sporting activity. It seems to me that the best answer to this trend, rather than confronting this technological entertainment diversion for young people, could be to join forces with the games technology industry. There could be mutually beneficial synergies in sportswear and sports goods providers entering into partnerships or joint marketing arrangements with games tech providers. The fact is there is time and opportunity for young people to engage in both mind and physical activity and a sensible mix of interest and investment could be a win-win.

5. The Continuing Significance of Future Major International Sporting Events

There is no doubt that the continuing growth trend for major international sporting events is here to stay, despite risks I will cover later, and will continue to be a big factor in stimulating public opinion, reinvigorating Government interest, deciding the sustainability or demise of sporting bodies and in turn providing your industry with future marketing opportunities. The life blood of the International Olympic Committee is the success of its Olympic

Games, for FIFA its World Cup, for UCI the Tour de France and so on. The competition for these major events will become even fiercer in the future even though the cost of bidding and staging these events continues to increase. The competition that will come from an emerging Asia, a prosperous Middle East, not to mention the two "Souths", of the African and American continents, needs to be factored in.

For countries like Australia whose inherent love of sport is an essential part of the national psyche an ongoing co-ordinated bidding effort for these events at Federal and State Government level together with sporting bodies and other major stakeholders like yourselves is essential. Complementing this is an ongoing need for constant rehabilitation, reconfiguration and imaginative construction of new modern sporting venues backed up with appropriate infrastructure. Melbourne has a history of demonstrating the will to do this with the early strategic positioning of Melbourne's iconic Cricket Ground. The audacious hosting of the 1956 Olympic Games, International Cricket Tests, Grand Prix Tennis, Formula 1 racing, AFL together with Rugby and internationals which until the much needed associated capital investments in sporting venues for the Sydney 2000 Games, continues to give Melbourne a head start as the sporting centre of this nation.

The proximity of Melbourne's sporting precinct to the CBD, attendant with all of its public transport advantages will continue to position Melbourne brilliantly into the future. Successive Victorian Government extensions to Melbourne Olympic Park such as this AAMI Rectangular Stadium, the upgrading of the tennis centre and the amazing continuous state of the improvements to the MCG, not to mention the Docklands Stadium will ensure its place as a future candidate for international events. However many international competitions in the future will be conducted nationwide and its important to recognise the more recent important sporting venue investments that have occurred in other state capitals and regional centres around Australia. Its also important for the Federal Government to recognise this with decisions on the disbursement of taxpayer funds. The bidding for the FIFA World Cup in 2022 relies heavily on this.

At the same time the sports loving public needs to be well informed and kept on side with the financial priorities involving major sport events given the competing needs for capital funds and operational revenues for health, education and community welfare.

6. Virtual reality

I am a little sceptical of those who talk about a futuristic scenario where virtual reality will overtake the need for big venues and backsides on seats around the field of play.

Their argument is that this technology will render the big sporting stadiums of today as dinosaurs and museum pieces consistent with the Gothic Cathedrals of the 13th and 14th Centuries. In May of this year, Nine's Executive Director Jeff Browne told The Age sports journalist Caroline Wilson of his network's interest in AFL Monday night matches. In suggesting it would be primarily a television game because people stay at home on Monday nights, he would compensate for half-full stadiums with virtual crowds, inserting spectators into empty seats using digital technology. On High Definition TV screens, I wonder!

My view however is to the contrary with evidence to demonstrate the believers, spectators, followers, and stakeholders will want to meet together and be part of the action around the centre of play; the majority of which will enjoy wearing the replica attire of their champion individuals, teams or brands - one of your big sources of revenue. And without this ongoing phenomena, how can virtual reality similarly inspire the new generation of sport participants?

7. A degree of risk

With all manner of success there is always danger lurking out there. The challenge is to be alert and where there is a threat sporting bodies have to attack it early. I believe sports leaders were slow to respond against the cancer of drugs, and the global systemic secrecy through the Cold War years was a barrier to transparent and methodical action against drug cheats. The real breakthrough was not with the Ben Johnson drama of the Seoul Olympics, it was the decision by the IOC in 1999 to enlist Governments across the world to subscribe to the formation of WADA - the World Anti Doping code. Today with international and national law enforcement authorities and immigration and customs bodies co-operating across borders to intercept trafficking of sports performance enhancing drugs, out of competition testing and scaled up research, there has been real progress. More recent innovations to get ahead of the cheats include the introduction of elite "athlete passports" but more especially the threat to those who resort to any form of doping, of retroactive testing.

A new practice following the Beijing Olympics is to freeze the urine samples taken from athlete testing at Olympic Games and preserve them for eight years (two Olympiads). These samples can be subsequently tested using new technology over this period against targeted athletes whose performance is perceived as abnormal, which in turn can lead to future sanctions and the withdrawal of medals. All part of enabling sport to get ahead of the cheats. IOC President, Jacques Rogge, takes great credit in escalating the fight against drugs in sport.

What is crucial for sporting entities now, is to become proactive with Government to head off the menacing emergence of illegal betting and attendant corruption. All too quickly we are seeing noble international sports like cricket, with the Pakistan Team revelations, on the ropes. There is clear evidence of interference at the lower levels of football competition in the bribery of young players in the interest of illegal betting outcomes, and watch this space for the "fall out" from the seeming absence of official oversight leading up to the Delhi Commonwealth Games. These matters are not only a threat to public perception of clean sport and all it stands for but also to your own industry. On the question of legal betting with appropriate government oversight as in the case of France, rather than deny its existence there is a case for making a virtue of the issue by ensuring that whilst the betting industry takes a profit and the Governments take tax, sport itself gets its rightful share of the outcome.

8. The Big Risk

In the past, the only major global calamities which have truly disrupted the continuity of international sport were territorial wars, in particular World War I and World War II. The more recent regional confrontations, such as Seoul, Vietnam and the Middle East, have not materially interfered with the momentum of international, regional and most national sporting events, even though the participation of athletes in these regions has been disrupted.

It may surprise you however that as far back as December 1981 when Melbourne proposed bidding for the 1988 Olympic Games, Prime Minister Malcolm Fraser sought me out at the Boxing Day Test in the MCG Members to tell me he was not sure his Government would provide the bid the necessary financial support. His reason? The threat of a terrorist attack on the Games in Australia in 1988 putting at risk the Bicentenary celebrations. Our submission would be aborted three months later through lack of Federal cost underwrite of US$7 million. Those Games would be celebrated for the first time on the Asian continent in Seoul Korea.

But we now need to begin to take stock of the escalation of the costs for security at international sporting events triggered by September 11, 2001, dating from Salt Lake City through Athens, which surpassed well in excess of US$1 billion. During the Beijing Games, 110,000 security personnel carried out operations at the venues assisting Olympic Officials, teams, distinguished guests and providing for Olympic related events - eleven times the number of competing athletes.

Two hundred police and intelligence officers from more than eighty countries manned the Games International Police liaison centre to oversee security work during Games time. We may never know the immeasurable cost to the Indian community this month to preserve security at what is regarded as a medium level international sporting event and the London 2012 number - well forget it!

Terrorism I believe has to be seen as the major threat in our time to the staging of future international sporting events. Despite the enthusiasm for Government authorities and sporting bodies to showcase their city and country by way of these mega events, an increasing proportion of the bidding population not to mention the athletes themselves is becoming disturbed with their exposure to danger, and confused with what they consider a disproportionate amount of money being diverted from more fundamental issues or normal life sustainability.

I don't have an immediate solution for this risk. However, I believe much more will need to be done by future candidature organisations to emphasise the long term benefits to the host population, that a greater proportion of security expenditure is made up of fixed costs and that the experience from intense security activity provides their city with greater assurance for the future. Having said this, sport must never give over to the threat of terrorism.