Pandemic shows sport has been following the crowd for too long
Pricewaterhouse Coopers believes that the growth of the sports market will slow to 3.3% over the next three to five years because of the pandemic, according to its 2020 PwC Sports Survey. Some sports organisations will face a drop of 30%-40%. Some believe the market will only begin to recover in 2023.
Meanwhile, in Europe, the top five football leagues have spent a staggering £2.5bn on players. England led the way with just more than £1bn spent since July 27 as clubs below
— the Premier League struggle for survival.
The Bundesliga took a 20% cut in TV rights. In the southern hemisphere, SA Rugby have shown New Zealand and Australia a toffee and are off to Europe apparently, while New Zealand is throwing a strop with Australia for being the Grinch of Christmas, and having an utter frothy over some leaked report of a meeting they claim is illegitimate ”. Around the world, salaries have been cut, broadcast deals shaved, sponsorships abandoned, competitions and tours cancelled, decisions stalled or ignored. The pandemic has ripped up sport and sent it into the corner to think again.
Like all industries predicated on events and mass gatherings, the unprecedented health crisis brought about by Covid-19 has impacted the sports market at its very core,” PwC reported
The sports sector is just not “used to external crises, as its major blowbacks often come from within the industry itself [for example corruption and doping]. This has shaken the sense of security and untouchability in which the sector has wrapped itself in recent years.
In many instances, risk management and contingency plans were not in place. Shortsighted funding, cash flow and cost management practices were drastically exposed.”
Short-sighted is a polite a way of putting it. The future, that undiscovered country, was never going to happen the way sports administrators have been acting. Change, innovation and reinvention were words given lip service. The safety net of the traditional model of TV, sponsor and stadium income was the be-all. Will that all change now?
Historically, the industry has drawn its commercial value from live sports. The Covid-19 shock has weakened this, fostering the adoption of alternative content formats. This new pattern pushes sports properties towards shaping their content strategies beyond events, paving the way for omnichannel and multiplatform storytelling,” the report read.
The acceleration in cordcutting, piracy and audience fragmentation are putting tangible pressure on the value of sizeable, exclusive media rights deals. This underlying threat raises important questions on how rights owners should approach exclusivity. We predict the near-term adoption of more diversified content distribution models, shaping a liquid market.”
Most of the respondents to the report believed there would be a change to the amount of importance placed on live sport. The growth will come in the consumption of match highlights and short-form content. Athlete-generated content and documentaries will show growth, as will social media platforms, OTT (overthe-top) and streaming services direct to consumers.
That said, most of the respondents said live sport would continue to generate the majority of income over the next five years, though the live sport experience would need to adapt, becoming more immersive and interactive ”.
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OTT has seen a growth of 205% in the past five years. Sport will need to put on a bigger show, become better story tellers.
Barcelona have launched Barca TV+, an OTT platform for members only. They have already produced original documentaries screened on Netflix and have partnered with Sony Music on a fictional animated series for children.
SuperSport seems to be moving in a positive way, upping its documentary count, bringing back US sports and ESPN. The SABC is in a different place, though Gary Rathbone, the new head of sport, is a canny operator. He will have to do a lot with a little.
The crisis has opened the cracks some SA sports have been papering over and ignoring for years. Cricket SA is on the verge of collapse, others are just clinging on. The PSL look to be in a safer space than expected, SA Rugby are making moves. Perhaps there is hope.
PwC had a warning for all. Beyond the structural risks inherent in the industry s
’
natural ties with crowds and events, the crisis also brought systemic weaknesses to the surface, suggesting prospects for profound change. Indeed, the then-weak
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signals related to shifting consumption behaviours, mutation of revenue models, as well as the arrival of external investors have now become tangible trends. It s vital that
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sports organisations fully address these issues with the perspective of turning them into opportunities.”