THE chairman of Westfield Group, Frank Lowy, has warned that all sport will have to contract in order to survive the upheaval caused by the credit squeeze.

While attending sporting events was often seen as a distraction in times of economic stress, Mr Lowy, who is also the chairman of Football Federation Australia, said sport was not immune from the tightness of the financial markets.

"I think the world has been living beyond its means, I think the world will have to contract, so will sport have to contract, it is as simple as that. There is only so much money to go around," he told ABC1's Offsiders yesterday.

Australian sporting officials are bracing themselves for dramatic consequences of the market turmoil, although all four football codes have their lucrative broadcast arrangements in place for at least the next two years.

But key to future negotiations will be the extent to which pay TV subscriptions are affected, and the movement of free-to-air advertising rates. Rugby union will be the first code to test the marketplace when its deal expires at the end of 2010. Insiders are tipping an expanded Super-14 competition may include a team from Japan, rather than a fifth Australian team, to make it more financially attractive to broadcasters.

Mr Lowy did not say if the FFA's expansion plans would be affected in the short term. But the AFL's chief executive, Andrew Demetriou, told the Herald he was pushing on with plans to include the Gold Coast in 2011 and western Sydney in 2012. In rugby league, the NRL's chief executive, David Gallop, said clubs were resilient but acknowledged the downturn would have a big impact on discretionary spending.