May 2020 Issue no. 261 www.sportbusiness.com Getting back to business SPORT COUNTS THE COST AND STEPS CAUTIOUSLY INTO AN UNCERTAIN FUTURE INSIDE THIS ISSUE Ben Pincus on taking Football clubs NASCAR and NHL look to Traditional sports the commercial reins respond to their esports for engagement pivot to Twitch during at F1 communities in crisis and brand building lockdown CONTENTS May | Issue no. 261 17 27 30 44 61 Worldview Events 5 Sports are still trying to figure out what the ‘new normal’ 40 Abu Dhabi – providing light at the end of the tunnel? looks like 6 Human needs drive the desire to attend games again Business Development 7 The Australian business is a contact sport Ironman’s new investors will focus on content and 8 The virtual NFL Draft offers three lessons for the future 44 of post-Covid-19 sports events virtual racing to unlock value Esports Covid-19 48 Online gaming has boomed, but esports isn’t immune to 10 Is playing football behind closed doors always the best Covid-19 medicine? 52 NASCAR and NHL look to esports for engagement and 14 Pro Bull Riders get back in the saddle brand building 30 Football clubs respond to their communities in crisis 54 The NHL on the launch of its players-only esports 34 Tifosy CEO Fausto Zanetton on football clubs surviving competition the shutdown 48 Failure to insure against pandemic will catch out many Governance Asia-Pac sports properties 58 Global Athlete report criticises IOC revenue distribution Sponsorship to athletes 17 Ben Pincus on taking the commercial reins at F1 Marketing 21 Rugby Australia suffers in comparison to ascendant AFL brand 61 “Change is hard” – Los Angeles Rams refresh brand identity to mixed reception Media 27 Traditional sports pivot to Twitch during lockdown @SportBusiness | www.sportbusiness.com 3 Worldview | London Kevin Roberts, Editorial Director [email protected] WORLDVIEW | LONDON | WORLDVIEW Sports are still trying to figure out what the ‘new normal’ looks like (Hannibal Hanschke/Pool via Getty Images) t looks as though this period in history have both delivered live events to feed backdrop and soundtrack and whose will come to be defined by the term their TV audiences. spend on tickets, F&B, hospitality and ‘new normal’, just as previous eras With plans for the Premier League and merchandising is such an important part have been by ‘Cold War’ or ‘Austerity’. LaLiga to get their respective shows back of overall revenues. IBut while those two words may be a on the road and Formula 1 also looking Other research suggests Covid-19 is convenient label for a changed world, to a return, there appears reason to be likely to cost top European football clubs they come up short as a definition. The optimistic about the future. a combined figure in the region of £3.5bn fact is that we all face a different new But we must be realistic. In a recent (€3.9bn/$4.2bn) even if they can complete normal and sport, like more or less every report, Gareth Balch, chief executive of the current season and get the 2020- other area of human life and endeavour, Two Circles, cited research showing that, 21 programme under way. If anything is trying to discover exactly what its new as more and more events fell casualty to prevents a restart, the picture looks even normal will look like. Covid-19, global sports revenues would bleaker. What we do know is that, after months likely fall to less-than-half the expected According to Charlie Marshall, when the news was dominated by level. And he warned us not to expect chief executive of the European Club cancellations, sport is taking tentative that, as the sporting machine cranks back Association, absence of matchday steps towards resumption. Top football into action, it will be like pressing a reset revenue is “the big scare at the moment”. has returned with Germany’s Bundesliga, button. That’s hardly surprising as empty some of golf’s big names have also been Sport may be coming back but it stadiums will cost millions, with the back on the course – albeit in a charity is coming back behind closed doors, proportional impact felt by those with event – while pro bull riding and the UFC without the fans who provide its visual the biggest grounds: Manchester United 4 www.sportbusiness.com | @SportBusiness WORLDVIEW | LONDON | WORLDVIEW stand to lose £140m and Arsenal £122m. and rugby, they have been eyeing up the It’s not just football of course – every potential of Italian football’s Serie A for a sport will suffer. Major League Baseball long-term rights deal. Editor stands to lose up to $600,000 for every And they are not alone. Blackstone is Ben Cronin game played behind closed doors and, also reportedly interested in Serie A, with [email protected] + 44 (0)20 7265 4232 when you consider clubs play 81 home the potential carrot of a cash injection Deputy Editor games in the regular season, that is one for clubs – many of which have already Adam Nelson hell of a hit. borrowed against projected TV revenues [email protected] + 44 (0)20 7265 4234 But at least clubs in the major football – as part of the package. US Editor leagues and top US sports do have There are others who may step up Eric Fisher significant media revenues which, one to invest in sport and, in doing so, help [email protected] assumes, will continue to roll-in so long clubs and others to ride out the current Senior Reporter and Analyst, Asia Kevin McCullagh as games continue to be played. crisis. But logic suggests they will only [email protected] That’s not true of many second- be interested in properties where future Head of Content or third-tier sports that rely almost contracted revenues are likely to be Richard Welbirg [email protected] entirely on their event-day revenues and significant and that they would, in any + 44 (0)20 7265 4233 associated sponsorships. They face a case, drive a hard bargain. This is now a Editorial Director genuine existential crisis and the sad fact buyers’ market. Kevin Roberts [email protected] is that not all are likely to survive. For those unlikely to ever be on the Sub-Editor These are the factors contributing radar of potential investors, the situation Suzanne Swaysland to a major cash crisis in sport. Media is made even worse by the near-certain [email protected] companies won’t pay for rights that devaluation of other assets – in particular, Senior Designer Alex Smith can’t be delivered, and lack of matchday players. The football transfer market is [email protected] revenue is hitting everybody. Add likely to look very different going forward Designer uncertainty over the appeal of television and those for whom transfer fees are Jacklin Kuneva coverage of sports behind closed doors factored into the P&L as a significant [email protected] Production and Distribution Manager and the potential impact on rights fees revenue stream are likely to be left Craig Young and the scale of the problem becomes floundering. [email protected] even more apparent. These are some of the key factors Commercial Director [email protected] The long and the short of it is that the shaping the new normal, but the truth is + 44 (0) 2072 654183 sports economy looks to be at its most that most of them are outside the control Subscription/Information Sales vulnerable right now. Clubs are naturally of the people who run the business of Scott Longhurst/Laurence Burton geared towards anticipated revenues, sport. The return of sport will be decided [email protected] which have simply dried up, while the not in the boardrooms of pro sports Head of Media Sales cost of keeping their businesses ticking leagues but by politicians with broader [email protected] + 44 (0) 2072 654182 over remain cripplingly high even when concerns and imperatives. players have agreed to take pay cuts. And in truth, it is only when the teams www.sportbusiness.com In many cases there is a desperate need of scientists working night and day Published by: for an influx of cash, and we have already deliver a vaccine that the uncertainty SportBusiness, a division of SBG seen what appears to be an upturn in threatening to cripple sport will truly Companies Ltd, Park House, 116 Park Street, London, W1K 6AF private equity interest in new areas. come to an end. While CVC, for example, has a track We wish them every success in their T: +44 (0) 20 7265 4100 F: +44 (0) 20 7265 4220 record in sport with its interests in F1 work. 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