22 May 2020
This week DRD Partner Pete Bowyer and Senior Associate Samantha Beggs take a look at the immediate effects of Covid on sports as well as its potential long term impact on the industry.
This bank holiday weekend should have seen tens of thousands of fans descend on Wembley to watch their team compete in The FA Cup Final, the traditional showpiece finale to the domestic football season. Hundreds of millions more would have been glued to their sets worldwide, watching dreams come true or hopes cruelly dashed. Instead, we will have to be content with the more socially distant fare of Wolfsburg v Borussia Dortmund in the Bundesliga, or the even more obscure Isloch v Energetik-BGU Minsk in the Belarus Premier League (16:30 this Saturday, if you’re interested).
It would be an understatement to say that Covid-19 has created huge challenges for sport at all levels. Most profound is the financial impact. In the UK alone, sport is estimated to contribute £24 billion to the economy each year, sustaining close to a million jobs. Giving evidence to the Culture, Media & Sport Select Committee earlier this month, chief executives of the English Football League, the Rugby Football Union and the England and Wales Cricket Board revealed they could lose more than £700m between them in the next year. If you add onto that the Premier League, who are potentially facing a TV shortfall of in excess of £1bn if their season does not continue, the sports bill will run into the billions. Last night, Manchester United revealed that the pandemic has already cost them £28 million, though they expect the final figure to be significantly higher.
For many other sports, however, the threat goes beyond immediate financial pressures – it’s existential. Yesterday, the International Olympic Committee President said that the Tokyo Olympics (which have already been postponed) may be cancelled completely if they cannot go ahead next year. UK Sport has suggested that six (unnamed) Olympic sports are facing bankruptcy due to their inability to host events, raise membership fees and provide for sponsors. Rugby League has already received a £16 million rescue loan from the UK Government, particularly important as England is set to host the Rugby League World Cup next year. Rugby Football League Chief Executive Ralph Rimmer said that lockdown had “genuinely threatened the survival of our clubs at all levels.” Although government intervention will come as a huge relief, it is a temporary fix to stabilise the sport.
Covid-19 has brought a near complete halt to sport as we know it, and the effects aren’t just financial. Sport brings people together, promotes physical exercise and has a way of reaching people who are vulnerable, providing a new sense of focus and getting people talking about how they feel, something particularly important as we mark the end of this year’s Mental Health Awareness Week.
Winston Churchill said that you should never let a good crisis go to waste, which is just as true of the Covid-19 crisis as any other. Sport has an opportunity to re-imagine itself, to examine its role in society more fundamentally – how it binds communities and nations together, how it can reach people in a way few other activities can, and how it can create a ‘new norm’ post-pandemic.
There is an opportunity too for policymakers to come together and create a new consensus around the governance and finances of sport. Alison McGovern MP, Labour’s thoughtful new Shadow Sports Spokesperson, believes the recommendations of the cross party 2011 Select Committee report on football governance, under the chairmanship of Conservative John Whittingdale MP (now himself a DCMS Minister) should be built upon.
That report made a slew of recommendations covering all aspects of the national game – including reform of The FA, broadcasting rights, a new licensing model, foreign ownership, the football creditors rule, and the role of supporters – but these have largely gathered dust in the meantime. Now Ministers have indicated a willingness to consider fundamental reforms (and there have even been voices in the game itself such as David Bernstein calling for a regulator), the time might be ripe to forge that cross-party consensus – but it should not be limited just to football.
Sport is too important to the fabric of the nation to be left purely to politicians. What may really be needed is a Sports Commission, led by a respected sports figure, to rise above the political self-interest and at times ‘bread and circuses’ view of sport and associated events. The focus must be on bringing together the myriad varied interests and stakeholders, from fans groups to owners to governing bodies to sponsors. The Commission could map out what the post-Covid-19 sports environment might look like, addressing issues that will be high on the agenda in boardrooms, such as funding structures, governance and sponsorship.
The industry has been hit hard with many sports seeking help to navigate their way out of the financial crisis caused by the pandemic, and it is not just Rugby League. Europe’s top football leagues are also asking for assistance with many investors showing a keen interest for deals in the world’s most popular sport – two private equity groups are already in talks about investments in Italy’s Serie A football league and that’s a trend we’re likely to see continue throughout 2020 and beyond. Sport needs to make sure that it has the governance structures in place to deal with that nature of investment.
Once things settle down into a new normal, it will then be the time to tackle some of the other thorny issues that sports were starting to grapple with pre-crisis such as mental health, environmental sustainability, diversity, sporting integrity, gambling, obesity and the rise of e-sports to name just a few. Like all sectors, sport will have to adapt and respond to the immense challenges Covid-19 has created, but if it doesn’t think big, leaving nothing off the table, then it runs the risk of missing an historic opportunity to define itself and what its true value to society is. That’s to come, hopefully soon, but for now we need to concentrate on navigating our way around the Belarusian Football Federation YouTube channel.
DRD’s core mission is to build, manage and protect our clients’ reputations at moments of challenge and of change. There has been none greater in our lifetime than Covid-19. Our innovative and dedicated sports practice has significant experience across a broad range of issues that impact on sports. For more information, get in touch with us firstname.lastname@example.org
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