13th May 2020
Article by Matthew Mahon | Managing Director Corporate
As professional, semi-pro and grass roots sports around Australia start thinking about warming up for their return to play, one thing is certain: the landscape will change.
The impact of the pandemic on the sports economy has been significant, and has not yet been fully appreciated. The local winter pro sports of AFL, League, and Rugby Union have captured the majority of the attention for obvious reasons – the scale of monies involved, the investment by media in these sports and the high level of access and engagement they have with federal and state governments. Some of these were in a precarious state pre-COVID-19 – one can only imagine the pressures they now face.
The outlook for NSOs and SSOs varies greatly: in a sad irony, the NSOs that have been the best at commercialising and building programs funded by non-government revenues will be worst hit. Those that have failed in this area will still be queuing for their government funding.
Aspiring (and some already selected) Olympians have had their Games postponed. Virtually all competitions globally have ceased, meaning the many hundreds of Australian athletes from all sports who earn a living competing around the world are without an income, and in many cases, unable to train.
At grass roots level, the huge economy of sporting leagues and associations, venues, clubs and coaches have largely ground to a halt. Registration monies may well be in the bank, but the weekly churn that pays the wages and many of the bills has stopped.
Racing has been the biggest winner. No crowds, but TV and online ratings have been up as much as 50%, and the wagering that funds the industry is at Spring Carnival levels. The industry take from the corporate bookies is up – anecdotally 70% with some - and while tote revenues are dented somewhat by the closure of TAB retail outlets, pubs and clubs, the revenue on racing product will be well up online. Racing’s challenge will be to hold on to this audience as other sports resume.
In its “Framework for Rebooting Sport,” the AIS and Sport Australia mapped out the guidelines for return to play, with a staged approach to managing health risks. As a further reminder of how sports-mad we are, this came prior to a similar plan mapping return to work.
But what will sport look like? Certainly some changes will be forced, as sports deal with the financial impacts of the crisis.
Have sports had the resources to take this time to reshape, or has it all been about survival?
What changes will be made proactively, by sports that have spent the sabbatical re-shaping their model?
True fans may well race back to beloved sports, but will consumer behaviour change? Have we found we can live without some of the things we used to do? Have we realised we (or our kids) were not leaving enough time for other things, and now having cut the ties, might we not go back? Will the volunteers that run many of the grass roots sport realise that their time is up?
Now is the time for clever, consistent communications that engages fans and newcomers alike, telling the stories of the sport (not just reruns and Best Of lists).
Sports should be critically reviewing their strategy and operating models, particularly funding and where it is likely to come from into the future, and at what level.
For those who are on top of it, 2020/21 presents a great opportunity to try new thinks and to reshape for the future. It is the time to innovate, and to be brave enough to make the changes required to set up for a sustainable future.
It is the time to be having the hard conversations with traditionalists within sports, key stakeholders and backers and convincing them about the future state.
While the issues vary hugely, this opportunity is as relevant for an international federation as it is for a local club or league. Things to consider include the sport delivery framework from grass roots to elite, structure of elite competitions, athlete needs, media platforms, funding models, development, rules and regulations, coaching and volunteer requirements, stakeholder needs, technology and equipment, and social licence.
The World Surf League has been one of the first to announce change, unveiling a restructured Tour and a new format which will see the world title decided by a surf off.
Who will be next?
Grasping the opportunity (or necessity) to change can be hard. But leaving it to chance is surely a sign of defeat. The time to act is now.