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Covid 19

COVID-19: How to Win

By: Swapneel Mehta

June 24th 2020

The COVID-19 global pandemic has caused a level disruption never seen before in our modern economy. From the rapid acceleration of self-serve technology adoption, to the looming crash of commercial real estate as remote work becomes the norm, every industry has been impacted in some way. The sports industry is no different. However disruption is not necessarily a negative. Disruption forces organizations to innovate, and innovation often increases efficiency and maximizes value generated. In my previous article, I looked at how COVID-19 has impacted the pro-sports world in 2020. In this article I aim to illustrate how sporting organizations can survive and thrive coming out of this pandemic. I am going to focus on three main areas where sporting organizations can adapt to handle the new environment: Fan-less events, Event Bubbles and Fan Risk Mitigation.

Short-Term: Virtual & Fan-less Events

Fans in stands will be a rare sight in 2020, and possibly well into 2021. Government regulations in many countries are prohibiting large gatherings, and while there are a few exceptions (NASCAR and the NFL namely), most professional sporting leagues and events have decided that the risk isn't worth the reward. The reward itself will not be as large as it once was. Even if fans were allowed at events, how many would actually show up? 

The short-term solution to this is pivoting to hosting virtual and fan-less events. Virtual events involve replacing the in-person event with a simulation of the experience. A great example of this is the NASCAR iRacing series. NASCAR was able to re-create their race track experience without requiring any of the staff or fans by having their drivers virtually race against each other through the iRacing platform. This served as a great live-sports replacement in April, driving an average viewership over 1 million for FOX networks.

 

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Non-competition events are also a great area of revenue and exposure generation that can be easily converted to a virtual setting. The NFL held its entry draft at the end of April, during the heart of the pandemic. Rather than the traditional fan-filled arena and the chest bumps between excited draft picks and Commissioner Roger Goodell, the 2020 version was held in a more modest setting, Goodell's house. Teams, players and even fans would video conference in as the commissioner announced picks from the comfort of his own home. The result was undeniable - ESPN and ABC broadcast the event live and viewership skyrocketed up 35% compared to 2019. The NFL's quick thinking and willingness to try something new, paid off. The question is: which league will be the next to try a virtual draft?

Holding live competition events without fans has its drawbacks. The lack of crowd noise, the visual sight of an empty stadium and the sheer economics of holding a sporting event without ticket and concession revenue all make the idea quite grim. While in some circumstances it may be truly unfeasible to host an event without in-person fans, many leagues have the opportunity to adapt their business model to take advantage of this. Turner networks hosted the sequel to "The Match", a charity matchplay golf event featuring Tiger Woods and Phil Mickleson. However, this year there would be no fans and limited media and staff. No roaring applause or crowds lining the 18th green. What replaced it however was a viewing experience unlike any other. Hearing the players talk freely and comment about their last shot, or what the next one looked like, gave at home fans a new perspective on the game. The results were positive: The Match II had a peak viewership of almost 7 million and was the #1 program on TV that day.

Medium-Term: Event Bubbles

With many professional leagues planning on resuming their seasons this summer, event bubbles have become a leading debate topic in the sporting world. Will they work? Are they too expensive? Are they necessary? All of these questions will be answered in the coming months as different leagues test different options. But what is an event bubble?

The goal of an event bubble is to isolate all required stakeholders in one location. The NBA is planning on keeping all players, officials and staff on a campus at Florida's Walt Disney World. The NHL is creating two bubbles, one in Edmonton and one in Toronto. The MLB and NFL are not currently planning event bubbles.

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Event bubbles need to be able to house all individuals that are in said bubble, including lodging, entertainment, food and other essential services. A robust testing plan will need to be rolled out to ensure that the bubble is not compromised, and if a positive test does appear, the appropriate protocols will need to be followed to minimize exposure. Leagues will have to decide on how to handle support systems of the bubble attendees. Family, friends, trainers and other staff are all considerations that leagues will have to manage. While players will want as much of their support system with them as possible, the higher the number of individuals in the bubble, the higher the risk and the higher the cost. Event bubbles, if done correctly, can allow for the return of professional sports in a safe and sustainable manner. If the NBA and NHL are successful, they could easily dominate the sporting media market for the rest of 2020.

Long-Term: Risk Mitigation

Eventually fans will be allowed back into sporting events. It will be the responsibility of sporting organizations to minimize the risk that their fans are exposed to when attending events. Public health organizations have provided people with measures that they can take to mitigate their own risk in their everyday lives. Similarly, it would be expected that public health guidelines around sporting events would be developed as we move closer towards allowing large gatherings. However there are a few obvious measures that sporting organizations can begin to plan for as they look to create a low risk environment for their fans.

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Masks and PPE availability will be a must for any sporting event in the near future. Staff will require sufficient PPE to serve fans in a safe manner. Providing fans with masks would also help reduce the chances of virus transmission. Governments may mandate masks for any large gathering making mask procurement a necessity. Distancing at the event would also be required to ensure a low risk of virus transmission. Current guidelines suggest that a six foot distance should be kept, which would require the blocking of certain seats to ensure fans are able to distance from one another. Disinfecting stations to allow fans to wash their hands / disinfect any items would also be a valuable addition to a low-risk sporting event. While the cost of these measures would be high, it will become a necessity to build enough confidence in governments and fans themselves that these events will be a safe place to attend.

Disruption always leads to innovation. However it also distinguishes those that are willing to innovate from those that are not. For sporting organizations the choice will be clear: either innovate or risk not surviving the changing behaviors and attitudes of their customers. There will be a few big winners coming out of this, the question is not if, but who.

Interested in learning more about moving forward in the post-COVID world? Let's connect and discuss how VantagePoint could help you. 

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