NEWS: Sports Events to Bear COVID Scars “for a decade”

07 Jul 2020

Adam Nelson, from the Europe office of SportBusiness, looks at how major sporting events are likely to bear the scars of the COVID-19 pandemic for the majority of the coming decade, though in the long-term the sector should recover to full health, according to experts.

Throughout the first few months of this crisis to date, sport has acted as both a bellwether and as a punching bag. Liverpool’s Champions League fixture with Atlético Madrid in March – held while lockdown conditions were already in affect in many countries and just days before almost all football across Europe was suspended – was blamed for a cluster of cases in the city, with Uefa branded irresponsible for allowing the fixture to go ahead with fans present. A little over two months later, the return to action of the German Bundesliga was hailed as a watershed moment, a signal of the country’s successful handling of the virus. 

Tempting the public back into crowded venues may be a challenge in the immediate term, though green shoots are already visible there: Hungary, Australia and New Zealand have already been inviting limited numbers of fans into stadiums, with the latter two already looking further into the future following their successful bid to host the FIFA Women’s World Cup in 2023. 

Precisely how that World Cup will look and what affect COVID-19 will have on it remains uncertain, though issues of public health and safety will inevitably be even higher in the minds of organisers than usual. It is events that fall into that medium-term timeframe which will be most significantly impacted by the pandemic’s aftermath, and the next two years in particular will be decisive in shaping the future of major sporting events.

‘Tactical’ changes

For the most part, industry experts do not predict radical change to the events sector in the long term.

“Our experience of the marketplace at the moment is that actually there is very little slowdown in interest in events from 2023 onwards,” says Angus Buchanan, Founder and Managing Director of The Sports Consultancy, which works in an advisory capacity with rights-holders and cities on planning for major events. “The knock-on effect of the cancellations and pushbacks into next year is meaning there is a glut of events available over the next two years, and hosts are currently merrily filling their calendars with itinerant events that have found themselves homeless. That’s leading to an unpredictable environment for 2021 and 2022, but we’re fairly confident that rights-holders who can see out those two years will be able to get back into a normal rhythm and that by 2023 the shape of bidding for and awarding events should be back to something like normal.”

Lars Haue Pedersen, Managing Director at Burson Cohn & Wolfe sports practice, concurs, but adds that the fan experience on a micro level is likely to be significantly different for at least the remainder of this decade.

“My basic view is that what worked before the crisis, I don’t see why it should not work after the crisis. Things will change, there will be discussions, but it is my opinion that there is no need to hit the panic button – those things people loved before, they will continue to love and want to come back to.”

Pedersen expects most change to be seen in tactics rather than strategy.

“What I mean by this is, in the manuals of an event organisers, there are those various sections that have been there for a long time: transportation, accommodation, ticket sales, security, accreditation. Now, there will be a new chapter on health, meaning the health of the spectators, officials, and athletes. Should spectators clean their hands before they enter a venue? Should they wear masks? Should players? They may have to increase the distance between seats, or make sure crowds enter and exit the arena at different times. There will be hand sanitiser available. These things will last for some time until people feel completely safe again, if they ever do. But these kinds of questions are what I call the ‘tactical level’ of running an event. On a strategic level, I don’t see why something that has been extremely successful and growing for the past 10 years should change too dramatically.”

Iain Edmondson, Director of the International Association of Events Hosts, which represents 41 event-hosting cities and regions around the world, adds: “My perception, from speaking to colleagues in the industry, is that long-term not too much should change. People aren’t imagining massive systemic change to the way the world works. If a government was looking to bid for the 2030 World Cup, for example, then that’s probably still on the agenda. The general feeling is that major events are still relevant, and people will still want to travel, as long as the host has the capability of staging a safe, well-produced event.”

Medium-term instability

What has changed is the outlook for the medium term, in which there is significantly less confidence that the world will be ready to go back to major events. June saw Brazil and then Japan withdraw from the race to host the 2023 FIFA Women’s World Cup, with the former citing the uncertain outlook due to COVID-19.

Edmondson notes that one problem for event hosts may be that their sources of funding for bids have been devastated.

“Particularly in North America, a lot of those bodies are funded directly from tourism revenues and hotel taxes,” he says. “When there’s no revenue there, as there hasn’t been this year, there’s no money to fund the organisations, never mind fund a bid.”

For events scheduled for 2022, 2023 and 2024, which would currently be running bidding processes under normal circumstances, Edmondson cautions that there will be far more scrutiny from event hosts.

“Even if they can afford it, is it necessarily going to be the right thing to do? There will be feasibility studies in greater depth than before, there will be people having looked at potentially bidding or had already started actively getting involved in targeting particular events in a particular year, that then have to make a grown-up decision to say they can’t now do that. That obviously opens opportunities for other hosts who may feel they are more capable of staging a major event in that period, though.”

Buchanan agrees that in this period, some countries and regions may take the opportunity to push further on hosting.

“The Middle East shows no signs of slowing down in its appetite, and we’re seeing a tonne of activity out of Asia and in particular China, which is extremely active in terms of event hosting,” he says. “We also know that a lot of South American markets are already thinking about how they stimulate tourism with sporting events, though clearly Brazil isn’t one of them. So there are going to be bright spots and dark spots globally, but I’d be looking closely at which areas recover from the pandemic most quickly, both in general and in economic terms, and looking to see whether they try and take advantage and get ahead of the curve a bit.”

A signal of re-opening

In his capacity as an advisor to event hosts, Pedersen says his current guidance is simple: “stay the course.” 

“We have to adapt, of course, we have to listen to what’s happened in the world and adjust accordingly. Don’t be tone deaf, but stay the course, keep doing what you were doing that has been successful so far. For places that have begun to deal with the pandemic, now is the time for them to announce plans to host big events. They don’t need to organise them right now. They just need to announce that they will organise them soon, because that will capture the public’s attention and make people realise this city is opening.”

That hints at why cities and regions are likely to continue bidding for events once the immediate danger of the virus is over. As much as providing direct economic stimulus, a desire to show the world that a city has ‘re-opened’ may become justification enough to hold major events.

“Take an example like New York,” says Pedersen. “Tourism has dropped, people see the images of what the pandemic has done in New York and they don’t want to go. Even a place like New York, that everybody knows, and everyone has been to at least mentally, needs to tell the world: ‘we are open’. They can spend money on advertising, saying ‘come to New York’ on CNN, or they can host some events at a lower cost, start to generate some spending, and bring people back that way. While the event industry is really hit very hard now, it’s also a chance for them to play a very important role when this hopefully turns.”

Cities are likely to turn to events in order to aid their post-pandemic recoveries for two reasons, he says: “One, because an event, if it’s good, has huge media coverage. But two, and more importantly, because an event is not only talking. It’s not just saying, ‘we are open’, it’s demonstrating, it’s showing what a place can do and how it works. Even well-known and major tourist destinations are going to have a huge need to show the world they are open and have recovered, to say, ‘come to us as a tourist, as a high-skilled worker, as an investor, as a student.’”

Despite the high costs associated with major events, Pedersen still regards them as the most cost-effective way for a city to achieve these goals. 

For that reason, in the short-term, cities and regions may look at hosting more home-grown and domestic events, minimising the need for international travel or huge spend on infrastructure. This will have a knock-on effect on the way hosts assess and measure the success of their events. 

“I don’t think the metrics will be driven by the expectation of bringing in 5,000 tourists or selling X amount of hotel beds, at least not in the short to medium term,” says Edmondson. “They’ll justify it through people seeing normality returning through broadcast images and digital and social media, and at the same time, cities will be doing something good for the local population that has also been missing events. I have spoken to a client that said they specifically wanted televised events that show there is life after COVID.”

Buchanan believes tourism will eventually return as a key driver in justifying expenditure on major events, though only after a period during which citizens have come to terms with the pandemic and feel comfortable with an influx of visitors. 

“After the 2008 recession we found that there was significant government stimulus to generate tourism, so we have to assume that that that will be the case, especially as we’ve seen governments seem to be getting pretty comfortable with just printing money and parachuting it in, so we expect that will continue. Tourism is such a big driver and always has been. Something like the Olympics brings 10,000 people just in terms of athletes, so while local populations may have to get used to the idea of tourists returning to their cities, it’s something that’s going to happen because nothing else drives economies like it, and major events are a huge driver of tourism.”

Public health

Buchanan also adds that the pandemic may accelerate government thinking on public health, adding that if event owners and hosts can make the case that their events encourage physical activity and reduce obesity rates, “sport has nothing to worry about.”

“In 2020, the cost of obesity and related illnesses to the NHS is around £6.5bn annually,” he says. “By 2050, that’s predicted to rise to over £12bn. The cost to the wider economy today stands at £25bn. There is speculation that the reason death rates from COVID in the UK are higher than elsewhere in Europe is due to higher rates of obesity and unhealthier lifestyles here. Public policy and public health agendas will be very focused on increasing participation and improving public health. That clearly is something that sport can deliver. And if sport is on to that, it doesn’t need to worry, frankly, about economic impact and driving tourism, because there would be enough of an argument and an investment case around public health, even before you get to destination place marketing and tourism and economic impact and those things.”

Making that case, however, is not going to be straightforward.

“It’ll take time. It’s been done, but it’s been done piecemeal, there are no accepted and standardised methodologies for measuring impact in a compelling way. But it’ll get there, because those kinds of arguments are going to be very powerful.”

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