The Winner called “Sports” against COVID-19 pandemic

Sports For All News: Article By Prof. Ravi Sahu, Program Director – Sports Management Programme and Ms. Urvi Abhyankar, S.Y Sports Management Prog. School of Management (PG), MIT World Peace University, Pune

Sports and physical activities for recreation are around since the advent of life on earth. There is enough evidence for sports & games; recreational or competitive – since year 3000 BC; finding mention in Indian scriptures in the name of Kanduk-Krida (Ball Game) or Malla-Krida(Wrestling) and in Greek mythology that became the modern-day discus-throw and football among others. Sports survived the test of time and evolved along with the evolution of mankind. The modern-day Olympic Games took a hit during the Second World War and the Tokyo Olympics 1940 along with the London games in 1944 had to be canceled for obvious reason, but the games and the sporting spirit bounced back again in 1948 at London Olympics.

In the year 1969, for 48 hours, Nigeria and Biafra held a ceasefire, during which the football club Santos drew 2-2 with the Super Eagles, with ‘Pele’ scoring both goals and receiving a standing ovation from the home fans. They dropped weapons just to watch him play.

Sports have major contribution in acting as a social connect between communities. School sports through sports education and tournaments bring students together irrespective of cast, creed and gender. The closure of education institutions around the world due to COVID-19 has also impacted the sports education sector, which is comprised of a broad range of stakeholders, including national ministries and local authorities, public and private education institutions, sports organizations and athletes, NGOs and the business community, teachers, scholars and coaches, parents and, first and foremost, the – mostly young – learners. While this community has been severely impacted by the current crisis, it can also be a key contributor to solutions to contain and overcome it, as well as in promoting rights and values in times of social distancing.

As the world begins to recover from COVID-19, there will be significant issues to be addressed to ensure the safety of sporting events at all levels and the well-being of sporting organizations. In the short term, these will include the adaptation of events to ensure the safety of athletes, fans and vendors, among others. In the medium term, in the face of an anticipated global recession, there may also be a need to take measures to support participation in sporting organizations, particularly for youth sports.

The business of Sports amid the current crisis

Sports proved its political and social impact throughout history and the true economic impact of sports can be witnessed in the glorious rise of the sporting industry in the last century. The annual global value of the sports business sector is estimated at a whopping US$756 Billion distributed across four major components – Professional Sports, Sports Retail, clubs & gyms, infrastructure, F&B, and betting. The lockdown severely affected the related industries like travel, tourism, catering, infrastructure, transportation, and media broadcasting too as there was no new content.

Since Dec 2019, the COVID-19 pandemic has spread to almost all countries of the world. By February 2020 most governments declared social distancing measures like lockdown of businesses, schools, gyms and malls. Recreation activities like sporting events or cinema halls were also the obvious ones to face the brunt. These were major places for people to gather socially and cause a fast spread of the virus.

The professional players and major sporting leagues had to cancel events and are facing a possibility of losing big sponsorship deals from huge sports sponsoring corporations as these companies are also forecasting heavy pressure on bottom-line due to the pandemic and lockdown. The Tokyo Olympics cancellation directly affected the 11000 Olympic and 4400 Paralympic athletes, coaches, sports officials, local organizers, the Japanese government, international broadcasters, fans, and the world sponsors. Add to this – hotels, airlines, and local businesses along with the 80000 unpaid volunteers who lost a lifetime opportunity to be a part of the mega sports event.

ccording to the Associated Press & Economic Times of India, the IOC with its financial safeguards against cancellation, which had happened in wartime since modern Olympics began in 1896, shows it has almost US$2 billion in reserve to cover the running costs until the 2022 Winter Olympics in Beijing. It also paid almost US$14.4 million in insurance premium to protect cancelling the 2016 Rio Olympics and US$12.8 million for a cover for 2018 Winter Olympics in Pyeongchang, South Korea. Wolfgang Maennig, an Olympic rowing gold medalist who teaches sports economics at Hamburg University, said the losses will be shared. “Insurance companies will have to pay a large amount of the losses of the IOC,” Maennig said in an email to the AP. “The rest will have to be borne by the IOC.”

As per the Insurance Journal – the Wimbledon tennis tournament had the foresight to buy around US$1.9 million per year in pandemic insurance following the SARS outbreak in 2003, paying out roughly US$31.7 million in premiums over that 17-year period, Wimbledon is set to receive an insurance payout of around US$142 million for this year’s cancelled tournament, “making it a very sensible investment,” said Ben Carey-Evans, insurance analyst at Global Data, the London-based platform that provides data analytics and expert analysis about the world’s largest industries.

Since the coronavirus outbreak took hold in Europe, professional sport has ground to a halt with all major competitions either postponed or cancelled completely. In football, initially the ‘big five’ leagues were put on hold until 2 April at the earliest, leaving a whole load of sporting questions unanswered. Will Liverpool finish the job and claim their first top flight title in 30 years? Who will win the duel between the Spanish superpowers Barcelona and Real Madrid? At the other end of the tables, the fate of the continent’s relegation battles is still in the balance, while the coveted European competition places are also still being fought over. The info-graphic from Statista shows a comparison of the number of matches still to be played in Europe’s major leagues, with the most unfinished business currently in coronavirus-hit Italy’s Serie A. Before it can be decided whether Cristiano Ronaldo’s Juventus can make it over the finish line there need to a total of 124 matches played, representing 33 percent of all matches in the current season. Serie A is set to comeback from June 20^th 2020.

The National Basketball Association (NBA) stands suspended due to COVID-19. At the time the season was suspended in March 2020, there were still 259 games left in the 2019/20 NBA regular season. Combined league gate revenues lost as a result of these cancellations was estimated at between 350 and 450 million U.S. dollars.

Major league Baseball (MLB), National Football League (NFL), National Hockey League (NHL) along with the College football in the USA is set to lose close to US$12 billion professional sports, college sports and youth sports tourism assuming the NBA and NHL cancel the rest of their regular seasons and MLB and Major League Soccer (MLS) miss 50% of their seasons.

The Empty Stadiums

The sports industry is facing various strategic questions in the current situation on the front of simultaneously managing fan expectations and minimizing operational disruption, planning for the future that can sustain the short and long-run repercussions of the breakout. What technologies & channels will help engage the fans during lockdowns? The pandemic is likely to be around for some time, the entire sports ecosystem will need new ways to deal with threats causing financial losses, disrupted cash flows, insurance challenges, and above all, a possible decline in long-term attendance and engagement. One of the most discussed solutions to the ongoing issues related to spreading the virus during mega sporting gatherings of fans has been a broadcast-only approach. One of the major revenue sources for the leagues is from broadcasting on television. While countries like Belarus and Nicaragua have never stopped and others like South Korea and the Faroe Islands have recently restarted, the eyes of the fans were on Germany to watch elite teams of the Bundesliga in action for the first time in over two months. Along with the regular Bundesliga fans, there would have been plenty of new watchers with the Premier League not commencing before June 17, 2020.

But the stadiums were kept completely empty following the safety measures. Borussia Monchengladbach placed cardboard cutouts of fans in the stands, with supporters of any team able to have one of themselves for a €19 (£16.60) fee. Every Bundesliga team were kept in quarantine, just going from a hotel to their training ground for the week leading up to these games, and players were and will be regularly tested for coronavirus. The league allowed a total of 213 people in the stadium – 98 around the pitch (including players, coaches, ball boys and photographers) and another 115 in the stands (including officials and media). Less than 100 other people were allowed outside the stadium for occupational reasons. On the pitch, handshakes are banned, there will be no team photos and there will be no child mascots reported the BBC Sports.

The Indian sub-continent shares no different fate. With IPL cancellation till further notice, the other major leagues and international tours are under the sword of uncertainty, unless the hurdles are taken care of.

“Cancelling the IPL for 2020 meant a huge financial hit for the BCCI in the range of Rs. 4000 Crore (US$ 530 million) or even more”- Mr. Arun Dhumal, Treasurer BCCI

The Corona Virus has really tested the immunity of the Health and Fitness sector across the world; it has been the front soldier to take the worst hit. The sports industry was in shock to see the Gold’s Gym filing for bankruptcy. When the market leader has fallen, we can only imagine the downward spiral of the sector due to the growing uncertainty triggered. The financial mess that the numerous gyms, fitness studios and sports academies are into is beyond imagination. According to reports in the US, SolidCore, a Pilates studio in New York, laid-off 98% of its workforce due to the hit on sales it took from COVID 19. Cult Fit in India laid-off 800 employees across the country and closed a number of its fitness centers to cut costs.

However, it’s not all doom and gloom as the fitness industry finds new ways to reach their audience with a digital push. Many gyms are going virtual with online classes, live streams and conducting personal training sessions via Zoom. The fitness company ‘Beachbody’ has reportedly experienced a 200% growth in subscribers (approximately 1.5 million subscribers) since shifting to online classes, App Annie – the app analytics and app data industry standard reported a 30% rise in the number of fitness app downloads in India during lockdown. However, the acceptability of such personalized online sessions and monetization of such services in India is still a question to be answered.

The challenges and the way ahead for the industry

Workforce Planning – Whenever the doors of the stadia are opened for fans, it will be difficult to ask employees to rejoin work as working in big public groups will not be the same. The manpower requirement is likely go down as managing operations with new constraints and government regulations will be applied. Stringent safety and sanitization measures will be the new normal. There is likely to a surge in demand for newer skills among employees to face the new world challenges mostly in technologies.

New Skill-sets Requirements: The business reset definitely will raise newer challenges, demand new-skill sets from Sports Management aspirants. The broadcast only format will reduce the man-power requirement from physical venues and at the same time will need more technology-savvy manpower to take the sport to every screen possible. Specialized software creation and training industry can capitalize and cater solutions here. Gym and fitness trainers should be learning to comfortably deal with their clients online via user friendly apps, and online & social media tools. Be it online Yoga classes, dance parties, Zumba, or personal training sessions the social media has been integral, more so now. The fitness industry is relying on social media and digital platforms like never before, perhaps inspiring greater accessibility and differentiated content for the future. 

Operating Models: The major disruption caused will make businesses opt for different operational models whether they were planning for it or not. The broadcast only leagues and internet streaming will definitely be on the rise. It will be interesting to see if the player will be able to rise to the level of play they are known for, without the supporters around in the stands?  

Ecosystem Relationships: Rebuilding relationships with the key partners from the ecosystem like broadcasters and sponsors will be paramount for smooth transition into post lockdown sports world. This will test the knowledge and negotiation skills of the new age sports manager in COVID 19 affected sports world.

Fan Relationships: Fan experiences & engagements are to be recreated from scratch with little socially distanced crowd in the stadiums and at restricted public broadcasting open areas or eateries. The social media engagement on Twitter, Facebook and Instagram has seen a steep rise in the recent years and is subject to an unprecedented growth without any doubt. Sports live-streaming platforms including YouTube and OTTs shall enjoy the fruits of their entrance before the COVID world.    

Investments: The rapid shutdowns crushed the cash-flows and created a capital crunch, the much needed investments to face the transition is not going to be easy to find. However, the bigger questions will be, should organizations be diversifying their portfolios across leagues and regions or in the time right to get more into esports?

Comeback Plan: Safer venues for fans and employees will be the priority of the comeback plan. The trust that organizers can build will define their success. An equally robust contingency plan is needed to face uncertainties of another breakout or second wave of COVID-19.

Low Contact Sports in Screen only format: Boxing, Wrestling or UFC can be termed as high contact sports that run a high risk of breaching the social distancing norms between players. However, MotoGP, Formula One, Golf, Gymnastics and Athletics are some examples of sports which can maintain social distancing among players and restart in a broadcast only version to keep business running and fans engaged. Most of them have given June end or July dates to commence business.  

The virus is invisible, mysterious and as yet without a vaccine. It’s a tough opponent to fight with but the sports world is all geared-up to stare it down and return to the ring. As per the ESPN report the US College sports facilities are opening up to their athletes, NFL is starting its training camps with safety measures and in-house. NBA approved its summer camp play-offs at Walt Disney World. Cricket club of Surrey County plans to play in front of reduced capacity crowd at the Oval sooner with only 6000 spectators in capacity of over 25000.

As they put it “Life will knock you down to your knees, whether or not to get back up is a choice” – Sports has chosen to get up!