04 Mar 2021
Posted in Sport
The predictions of a ‘bounce back’ for the sports industry are exaggerated, says GlobalData
While the sports industry is optimistically predicting a bounce back as COVID-19-related restrictions ease, the hardship currently being felt by the sports industry is going to continue for a little while longer, says GlobalData, a leading data and analytics company.
Conrad Wiacek, Head of Sport Analysis at GlobalData, explains: “Sport has been severely impacted by COVID-19. There was a near 30% reduction in the volume of sponsorship deals being signed in 2020, with deal value falling by 41% year on year.
“With over $10bn being wiped from the sponsorship sector alone, many are not taking into account that other struggling sectors that utilize sport sponsorship will likely restrict marketing spend, which will have a knock-on effect on the sports industry. For example, the airline sector, which was previously spending $761m* per year across various sports sponsorships, will unlikely be a viable target sector in the years ahead.”
In terms of event attendance, significant restrictions in terms of travel and attendance are expected – with the 2021 Olympic Games likely to go ahead in front of a domestic audience only.
Wiacek added: “While the public appetite for ‘public event’ sport may be there, public health restrictions will limit the number of tickets being sold for all event types. As a result, games will likely continue to be played in half empty stadiums and arenas, which will further impact the media rights market.”
The media rights industry has several significant contracts coming up for renewal, with the NFL in the US and England’s Premier League taking their rights to market over the next 18-24 months.
Wiacek notes: “Broadcasters are likely to play it safe and will not make significant investments in a time of uncertainty. Essentially, empty stadiums are simply not a product for which they will want to pay.”
In the case of the NFL, ESPN parent company Disney is already warning the league that rights fees might drop, as the company has seen significant losses due to their parks being unable to open and cinemas remaining closed. Further, Germany’s Bundesliga saw a drop of 20% for the international media rights when securing its deal in March 2020 (prior to the full impact of the pandemic becoming known). The likes of the NFL and Premier League should prepare for a rights fee reduction and cut their cloth accordingly.”
* across 62 airlines