Staff Writer
Aug 18, 2020

Emerging from Covid-19: 5 reasons to be optimistic about the sports industry

Adrian Staiti, APAC President of sports marketing agency SPORTFIVE challenges the cautious outlook for the sports industry and suggests how a better normal will flourish once markets come out of the pandemic.

Emerging from Covid-19: 5 reasons to be optimistic about the sports industry
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It was October 10, 2001, only weeks after the terrorist attacks of 9/11. I had managed to secure tickets to the first game of the American League Division Series between the New York Yankees and the Oakland Athletics in the Bronx. On that chilly autumn evening, there was a palpable sense of energy as people filled the stadium and settled into their seats. With a mix of anxiousness, excitement and an eagerness to reclaim the familiar feelings of playoff baseball, America was desperate to make its way back to normalcy. 

There was a moment of silence to remember the fallen – a symbolic silence that muted an entire city, and perhaps an entire nation watching on television. It was an emotional moment for New Yorkers and Americans as the utterly symbolic all-American game of baseball resiliently continued with resolve.

When the first ball was thrown, the deafening roar from the crowd felt like the weight of sadness and anger had come off a country’s shoulder. The MLB playoffs were back, and in that unifying moment, sport not only healed but provided hope and a much-needed escape from what we had endured.

This may have been a very “Americana” setting, but as parts of the world ease their way out of the Covid-19 pandemic, I expect this same electrical spirit of unity in stadiums from Vietnam to New Zealand, Japan to Australia and beyond, as fans rally behind their teams after months in lockdown.

With global sports sponsorship spend expected to fall somewhere between 35% to 50%, live attendances mostly cancelled, and sports-related media revenue generation expected to drop by some 35 per cent for APAC to the tune of US$2 billion, we could be forgiven for buying into a “doom and gloom” narrative about a sports industry that will never be the same again.

A snap poll by The Guardian indicated that fans will be less passionate when they return to sport. Others have indicated that brands will or should continue to take a more austere approach to spending, marketing and sponsorships. Some say there will be a “new normal”, that is more digital than physical, and that there will be long-term anxiety among fans about attending live events and being among crowds.

There is validity in these observations, but they also overlook the power of sport to conjure the human spirit together on and off the playing field.

As countries transition to a post-lockdown world, we should not resign ourselves to a gloomy “new normal” in sport, we should commit ourselves to creating a “better normal”. This means better broadcasts, better live event planning, better opportunities for partnerships, better experiences for fans, better all-round entertainment and engagement, and a greater focus by governments to use sporting events to rally their citizens.

It is not going to be an easy road in the short-to-medium-term as the pandemic pans out. But I do not expect the sports industry will remain where it is now. Sports will come back better and stronger than ever as governments, leagues, broadcasters, players, rights owners, sponsors and marketing agencies put fans at the front and centre to welcome back a better normal.

Sport is a formidable force, and we can count on it to unite societies all over the world again.

Here are five aspects that I think will be important in the months and years ahead:

DIGITALISATION AND BREAKING THE FOURTH WALL

Technology and next generation storytelling are going to be very crucial. The global lockdown has inadvertently sped up many things we expected from live sports and broadcasters.

Players from the NBA to the EPL have staged online competitions among themselves and with fans to keep them engaged during lockdowns. Players like Lebron James and Neymar asked fans to join them in online home challenges. The International Table Tennis Federation called on fans of the sport to submit videos of themselves to stitch together the world’s longest rally. Juventus used the stop in play to reach out to fans in China and grew its base of Chinese fans exponentially.

This activity has set a new bar and fans will be expecting more of this direct-to-consumer communication and breaking of the fourth wall.

If leagues and players can continue this engagement, it will create interesting opportunities for brands and sponsors to be part of what are organic conversations with fans.

ESPORTS, THE BOOM AMID THE GLOOM

One sector which is growing exponentially despite the pandemic is esports, which saw significant pick-up in user engagement during the lockdown. Revenues for gaming companies, console makers and streaming platforms hit highs almost overnight.

The shutdown of traditional sports turbocharged the esports and gaming industry, and sparked interest from non-gamers and non-endemic sponsors. Korean esports team T1, which is represented by SPORTFIVE, penned deals with BMW, Samsung, Nike and Logitech all within three months this year at the height of the pandemic, signalling the synergetic potential between the sport and brands looking to engage a younger crowd.

I expect more brands to pay attention to the tremendous potential of esports and diversify their marketing and sponsorship strategies as they engage directly with younger more digitally connected fans.

GOING LIVE AND LOUD

People are itching to go out and live their lives again, and we can expect live sports and entertainment to be even bigger than it was, not just in terms of attendance but in overall interest, engagement and production.

This will drive organisers, stadiums, venues, teams and sponsors to rethink the way they deliver live shows and sporting events, and how they can extend their marketing pre-, mid- and post-show through more quality content while adapting to more innovative platforms.

In early June for example, football in Vietnam returned to packed crowds as the Covid-19 threat in the country abated. In one of three opening V.League 1 games played, the 40,000-seater stadium in Nam Dinh packed close to 30,000 fans, an unprecedented return for a stadium that averaged 12,000 spectators a game in previous seasons.

With growing confidence to return to live events, stadiums should start equipping their infrastructure to deliver enhanced fan experiences. Meanwhile, event owners can continue to look at ways to implement augmented and virtual reality on ground with concurrent live streams on social channels to supplement the live experience and to reach larger audiences.

BIG HOPES FOR CHINA

In China, where lockdowns have been largely lifted, SPORTFIVE and its clients have been back in their offices for some time already, looking at the opportunities ahead in the sports industry. We project the sports and sponsorship scene in China to have big run over the next three years, with brands looking to move forward with activities around the Uefa Euro and Summer Olympics in 2021; the Asian Games, Qatar World Cup and Beijing Winter Olympics in 2022; and the AFC Asian Cup in 2023.

China will continue to be a growth market for international rights owners and navigating the complex landscape of creating a fan base in China would mean a continued growth of digital consulting and activation work for agencies.

GOVERNMENTS TO EMBRACE THE SPORTING SPIRIT

As governments try to kickstart their economy and pick up the pieces, sports and live events will be a rallying cry for them.

We see potential for some great synergies between leagues, rights owners, venue operators, sporting authorities, ministries and event companies to put on fantastic sport and entertainment events if they can work towards finding a symbiotic relationship that is focused on driving the national spirit and keeping citizens engaged.

Sports events can be a perfect marketing play to get countries back under a positive spotlight, and play into themes including tourism, investment and nation-building.

This article was first published on SportBusiness titled: “Adrian Staiti | Five reasons to be optimistic about the sports industry post-Covid-19”.

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