The FA, EPL and EFL issued a joint statement way back on 20th March that professional football would cease. Other major sporting events followed suit, culminating in the difficult decision to postpone The Olympic Games until July 2021. The repercussions of these decisions have since been felt, not only through sport, but through industry too, as businesses that rely on the glued eyes of sport fans also began to feel the pinch. For sponsors who rely on sport to communicate to consumers, covid-19 has hugely limited opportunities to activate their rights and assets and stripped back guaranteed large-scale awareness that their brands would normally receive.
Although sport will suffer in the short term, it’s not all doom and gloom. Many of the big sporting events that attract major sponsors like football, tennis Grand Slams, F1, The Open etc. will still be able to draw large audiences through broadcast coverage. Already we have seen the opening of tennis and golf clubs, Roland Garros is considering a tournament behind closed doors and the PGA have targeted a June restart, also without spectators. Meanwhile, the return of the Bundesliga has seen huge viewing figures as top-flight executives watch the tentative steps towards some form of recovery.
For the broadcasters, the return of sport represents a boom time, with more people watching TV than ever before. For sponsors of major events and clubs, it opens up opportunities to activate around the TV coverage through advertising, break-bumpers and online content that supports the live action. TV audiences will rise as fans return, desperate to break their sporting drought. Big audiences bring bigger awareness figures and media values for sponsors.
Inevitably we can expect to see the huge TV rights fees that are already being paid by broadcasters increase further, as major leagues and rights holders pitch new rounds of TV broadcasting ‘rights. Streaming behemoths like Amazon, Netflix and Disney + have been the major winners during the pandemic. Netflix added 15m subscribers in March this year and Amazon’s shareprice increased by 38% between March and May. Both have flexed their muscles in the competition for sporting TV rights, so it won’t be a surprise to see them heavily involved in the next round of bidding. Sky Sports, who paused customer subscriptions, will be looking anxiously towards a green light to restart coverage and entice new subscribers to the channel. Add to this the increased appetite from international audiences for English sport (Swedish Media Giant NENT paid a record breaking $2BN to the Premier League for a six year TV rights deal back in January this year) and it’s clear to see that TV rights will swell. Good news for the sports that are able to attract the big audiences.
Meanwhile, the lockdown strugglers will be the smaller clubs who rely heavily on ticket and merchandise sales. With no live audiences, sponsors will soon switch off. Many clubs have furloughed staff to make savings, but concerns remain that they simply don’t have the resources to bounce back. Playing behind closed doors will bring in very little broadcast money for those clubs lower down an increasingly wobbly pyramid. Other smaller sporting institutions involved in netball, gymnastics and athletic, will suffer greatly from lack of subscriptions, major competitions and ultimately, media coverage.
One ray of sunshine for the smaller sporting governing bodies and clubs at this time is the rise in OTT television or content that is broadcast straight to the web. Unable to attract a TV rights deal, many sports will create their own live content or partner with sport streaming specialists like DAZN or Eleven Sports. While OTT audiences have grown in recent years, governing bodies will be hoping that the appetite for their own sports will drive audience numbers and subsequently revenue from advertising and sponsorship. Time will tell.
For now the hope is that brands recognise the shift from a purely commercial deal to a ‘White Knight’ deal. Tottenham’s Harry Kane has led the way here by sponsoring his local club, Leyton Orient, whilst placing the logos of his chosen charities on their shirts.
In a similar vein, UEG is currently working to secure partners for the online version of the Edinburgh Festival, which is raising money for the many venues and artists that will suffer financially after this year’s Fringe was cancelled.
What is clear, is that clubs and governing bodies will need to work harder to find sponsors, and sponsors will need to work harder to find audiences. But for now, most of them will be watching the telly.