There are three key strategic issues that sports organizations should consider, to recover from the crisis while making a bold play for a thriving future.
The continuing COVID-19 crisis is creating enormous uncertainty and change—and questions with no obvious answers: Which changes will persist? What will the new world look like? How will people and firms adapt? Even as technology, media, and telecommunications companies focus on responding to the global pandemic and its immediate repercussions, they will soon need to pivot toward recovering from the crisis and setting themselves up to thrive in the next era. Sudden change can loosen old foundations, creating opportunities for greater progress. Companies should reassess what and how they sell, how they operate, and how they can forge stronger and more direct relationships with customers.
This series will frame a discussion and explore what’s changing, what strategic issues to consider, their impacts, key actions to take, and questions to ask. There are many different scenarios, and we may not have all the answers yet, but we can act with foresight to better position ourselves for a stronger and more resilient future
There are three key strategic opportunities that sports organizations should consider, to recover from the crisis while making a bold play for a thriving future:
When US sports leagues began suspending their seasons in early March 2020, it underscored the seriousness of COVID-19. Mandatory social distancing radically affected the US sports industry right away. Live sports have taken the largest hit, shutting down games and ending broadcasts for millions of fans. Live game revenues—media, sponsorships, ticket sales, and in-venue sales—are gone, and staff are taking pay cuts or being laid off.
It is unclear when and how they will return. Not only may players and fans likely be hesitant to congregate again on courts and fields and in bleachers in the near term—the economic shutdown may also bring lingering financial challenges to teams and fans alike. Deloitte’s US Economic Forecast sees a 50 percent probability of a recession and a 30 percent chance of a financial crisis, depending on how quickly the virus is contained. A severe downturn will likely disrupt the sports value chain, from fans to investors.
A thoughtful recovery can expand on existing strategic opportunities that may not have been previously prioritized, but are now essential to stay connected with fans no longer brought together by league calendars and tournament brackets. Franchises can leverage modern media services that reach more people, and they can innovate on content and fan engagement while live sports are suspended. All of these can help guide sports organizations into a thriving and durable future.
The recovery phase presents an opportunity to reconstruct the sports industry—not just to rebuild it as it was, but also to design the next phase of the industry that can help it thrive for decades to come.
The COVID-19 crisis is unprecedented. Many things will likely change, and uncertainties are mounting each day. As sports organizations respond and recover, they have an unprecedented opportunity to reevaluate the way things have been done and to build a new future in which they can grow and thrive. To do so, leaders should be bold, willing to experiment with ideas previously considered too difficult. This disruption offers a chance to get back to business while changing the business for the better; to build organizations with the competencies and mindsets to push forward; and to rebuild portfolios and processes that move the industry forward while enabling sports businesses to absorb failures, weather changes, and roll with the next black swans.
When sports venues reopen and crowds return, it will likely be a big signal to the world that the crisis has passed and we can come together again. But until then, under the shadow of COVID-19, it will be a different world, one beset by continuous change even before the pandemic confined fans to their homes and canceled entire tournaments. Such a world may be best met by businesses that have strong connections with their customers, robust sensing and modeling capabilities, and the ability to keep reinventing how they think and operate