Big Sports lose in stoppage time
TROUBLED TIMES With big leagues and top governing bodies set to face financial fallout, sports business may have to make a return to less profligate times
NEWDELHI:THIS is not just the era of sports, this is the era of Big Sports. And, for the moment, it has come to a complete halt. The billion-dollar broadcast deals, the millions of viewers, the mega sporting events that transform entire countries (for better or for worse) are all in limbo. Every tournament, every league, every team and every sporting organisation around the world will have to cope with the immense financial fallout of this stoppage. FIFA, world football’s governing body, is already working on plans to assist the football industry.
UEFA, the sport’s European governing body, has lost $300 million by having to postpone the Euro 2020 by a year. They will also incur huge losses in sponsorship fee, broadcast and marketing rights because of suspension of the Champions League. The Tokyo Olympics are in the same trajectory—delayed by a year, they are looking at estimated losses of $5.94 billion. The Indian Premier League is holding on to the improbable hope that they will be able to reschedule within the year, but if they are unable to do so, they are staring at a $1 billion loss, spread across various stakeholders (according to consultancy firm Duff & Phelps). This is not to mention the hundreds of small clubs and leagues that depend entirely on gate sales.
Sports business has emerged largely unscathed through past crises—none of the great financial difficulties in the past few decades made much difference to its growth into a financial behemoth. Look at football, for example. In 2000, Portugal’s Louis Figo signed for Real Madrid for the then record transfer fee of (roughly) $40 million dollars. By 2017, the record transfer fee stood at around $243 million, paid by PSG for Neymar. In the next one year, there were four more transfers worth $100 million or more in Europe. When the Covid-19 pandemic passes, the world of Big Sports will face its toughest ever challenge; it may have to make a return to less profligate times.