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While much of the country and the world is beginning to reopen, one segment of commerce still being greatly impacted by the COVID-19 pandemic is related to large gatherings of people. Small weddings and entertainment events have found ways to function by implementing social distancing and mandating proper protective attire by attendees. Large venue events that have people congregating in one place after traveling from multiple locations, however, remain one of healthcare professionals’ greatest taboos.
Initially, college and professional sports programs postponed or canceled games and entire seasons. Now, after some early progress, many collegiate athletic programs and professional sports leagues have resumed playing, albeit with a greatly-modified experience for both players and fans alike. The sports programs that have or will soon start the 2020 season do so under heavy testing protocols that make normally stringent testing look like a piece of cake. Due to restrictions, many stadiums and arenas are completely void of fans, not including the cardboard versions that are so often seen on TV. With COVID-19 being a life-threatening pandemic, one could question the importance of resuming something so comparatively insignificant as game playing. The answer, of course, is that whether collegiate or professional, the sports industry is big business, employing tens of thousands of people and generating billions of dollars in revenue each year.
For marketers of sports brands that count on big events for advertising revenue, the losses can be catastrophic. According to a Statista’s analysis of the sports industry, television revenue is expected to experience a $2.2 billion loss. An additional $3.5 billion in fan spending on professional sports could evaporate. Advertisers are finding that survival will depend on being agile and willing to accept new and novel approaches to getting messages out to the millions of fans that are no longer seated in stadiums and arenas around the country. The heavy lifting will most likely fall upon the effectiveness of digital marketing channels in connecting with consumers through a new virtual landscape. The ability to adapt and incorporate innovative platforms and channels and discover new revenue streams, partnerships, and strategies will separate the winners from the rest of the competition.
Before the pandemic, the sports marketing and broadcasting arena was beginning to shift to online, cable and social media channels like Facebook and YouTube. The migration will likely escalate, leaving many unprepared brands behind a relatively sharp learning curve. The new rules of the marketing game will see new adaptations of virtual and immersive technologies and media platforms that mimic a real-venue experience for fans. But the restart has been plagued with misfires of the starting pistol, leading to confusion and increased consternation among many of the most prominent players in the high-dollar ad game. “They’re already shy to spend money right now,” says John Rowady, President and Founder, rEvolution. “Conservative, big companies are going through their own economic and financial issues.” These “Star” marketing players are looking to renegotiate long-term media contracts and hopefully gain an advantage in the long run. “It’s definitely become, at least in the short term, much more of a buyer’s market,” says Joe Zajac, senior vice president of brand marketing at Excel Sports Management. “We are absolutely seeing a lot more flexibility from the properties and also I think a lot more intentionality on the front end in terms of the contract points.”
With a 30 percent reduction in sports advertising so far this season, brands playing to win the championship, or just survive until next season, will need to reallocate marketing spend away from traditional mediums to new and innovative digital marketing opportunities.