From the way sports organisations have responded to the initial outbreak of the coronavirus, to predicting the scenarios of recovery, SportBusiness spoke to leaders and executives in the Asia-Pacific region to find out what impact the epidemic is having on their organisation and their partners. Most spoke under condition of anonymity, so as to share deeper insights on the challenge that’s going to define 2020, in the sports industry and beyond.
Apac regional sports marketing agency executive – sponsorship sales manager
Operational impact:
“Operationally, it’s had a significant impact for the last two-to-three weeks. In very simple terms, we’re working in ‘flexi’ mode. I’m at home right now. Many of my staff are at home. My mainland Chinese staff…all had to be quarantined for 14 days. So it’s had a significant, very practical impact, and to be honest it’s been quite frustrating…
“[But] by and large that’s been solvable. My guys are all on Zoom. We’re chatting, trying to keep spirits up. I’ve got the whole team out to my place on Friday and we’re doing team-building. So we’ve just changed gears a bit operationally.”
Impact on sales:
“What we can’t avoid is the fact that in any sales world, especially one with a deadline which is cycle-based like ours, not being able to move and progress for, let’s call it a month at the moment, and the uncertainty in the marketplace – it’s not good, it’s not great. We’re in a world where we need to develop conversations constantly, and having this time out and having uncertainty in market could well put downward pressure on our pricing. There’s no doubt about that…
“Can we maintain pricing in the short-term at the level that we were expecting? And at the level that we were achieving prior to Chinese New Year? And how does that then impact what we do now? Because we don’t want to rush back into the market and reduce our pricing, especially given we have people already on board that have already paid very strong fees. But at the same time we need to fill spots, we need to build case studies. So we’ve got to think very carefully about whether we rush into bringing people on board as soon as the market reopens.”
Territorial impact:
“China is, I would say, dormant at the moment. I wouldn’t say it’s gone backwards, I wouldn’t say that it’s now in ruin, but we just don’t know and any leads we had going on prior to Chinese New Year are now in a ‘hold’ mode. My sales staff are just talking, continuing relationship discussions, but we can’t move anything forward.
“More broadly around Apac, due to restrictions on travel and general uncertainty, people are less likely to make decisions and progress things in the last few weeks, and I suspect in the coming few weeks…”
Apac regional sports marketing agency executive
Event cancellations:
“Sports events that are ad hoc or less clearly linked to an established calendar are more at risk, in particular things like golf events…you could cancel a lot of golf events and it wouldn’t impact the overall calendar too badly. You cancel a Champions League football match or a Fifa World Cup qualifier, and it throws the whole thing out, it doesn’t work.
“So certain established, fundamental players in the sports landscape need to keep going and are less at risk [of cancellation] than those that are running ad hoc events or events which are easier to dice up in the calendar…
“Events which rely less on in-venue revenue are more able to play behind closed doors, and still achieve business objectives. No one wants to see an empty stadium, but football, for example, can do that and survive in the short-term.”
Beijing-based sports marketing agency executive
Overall impact in China:
“The sports business world has stopped for a while. No one knows when everything will get restarted, when the football league will get restarted, when the marathons will get restarted. When the [National Congress of the Communist Party of China – the party’s highest decision-making arena, which takes place every five years] will get restarted – it was supposed to be held this week, but it was also postponed.
“Things are starting to be stabilised, but it’s still worrisome because no one knows how exactly the virus is [transmitted] and it’s quite…One person can infect dozens, so maybe we see now its getting better but if we loosen things…everything might become worse again.
“A lot of companies are working from home even though the government said it’s safe now to go back to work. We are all working from home until we see a clear sign, we feel safe and good enough to go to [the office]…
“We do a lot of conference calls. Sometimes someone has to go to the office to do a job, to print, to stamp some documents…We avoid going to the office at the same time.”
Living under strict measures:
“More than a few people gathering at the same time is not even legal now. You cannot meet your friends and sit down for a beer. You cannot go to restaurants with more than a few people. So it’s quite strictly controlled in China, right across the country.
“I just came back from Japan and I’ve been asked to quarantine myself in-home for two weeks. I can go nowhere. All food, vegetables, whatever, I have to order for delivery. I cannot leave the house.”
Some projects halted, others continue:
“We were doing some proposals for Olympic-related marketing. Some were ready to go, but we have had to postpone. Everyone is looking, waiting to see…There are rumours that Tokyo 2020 might be postponed or cancelled – all kinds of rumours – we don’t know, so our client is waiting.
“We are also helping some of our clients to purchase some Olympic hospitality packages, including the opening ceremony. But, again, that’s been put on hold.
“We have a client that is a sponsor of the Chinese Super League [football league]. The Super League is on hold now, so obviously that project’s stopping, and the payment also stopped…
“But we have to move forward. We’re doing a lot of things that are not being affected by the coronavirus. For example the [online sponsorship platform] we’re developing… That is under normal procedure because the programmers work from home.”
Looking to H2:
“Most of us believe that things will start to move from June. I think everyone is planning for the next half of the year…the expectation is the second half of the year will see a huge jump in consumption…with marathons being cancelled and postponed and the football league being postponed…they will have to make things happen in a shorter timeframe.”
Closer attention to force majeure in future:
“Maybe, after the virus, in the sports business in China, everyone will pay more attention to force majeure terms. Previously, no cares about this…it is far away from the commercial terms, at the end of the contract…But, after this, everyone should be thinking that if something happens, like a disease or a big change in the society, and if someone cannot deliver, what are the terms for everyone in the contract?”
Apac regional sports marketing agency executive
Sponsors hold off:
“Probably every sponsor under the sun is considering their investment and their budget and postponing investment decisions and sponsorship decisions. That is happening already. People really don’t feel comfortable starting on things right now – they’d rather sit, wait and see.”
Running a major sports event in Southeast Asia in Q4:
“We’ve got a little bit of time on our hands still. But we still need to plan ahead for it. And, again, we can’t have a conversation with a sponsor right now, where we say this is definitely going ahead, we can definitely lock in the budgets now, we can definitely decide this, that or the other. They’re asking us for deadlines for when we would call it off…that hadn’t even crossed our minds.”
Apac regional sports marketing agency executive
Selling sponsorship for an event in Australia in Q1 2021:
“One of the brands we were talking to said: ‘We can’t sign…It seems to be a long way away, Australia is a long way away. But as a company we’ve got to be really mindful that we’re not putting anyone at risk…we can’t also expose our own staff now for pre-site visits…’ – all sorts of stuff that hadn’t even crossed my mind yet.”
Ambassador pulls out of activation:
“One of the configurations was for an ambassador to come and participate in one or two events that the brand was hosting in Asia. The ambassador said he was calling force majeure: ‘I’m not coming in the next two months until this is sorted. Happy to come at a later stage, I’m not pulling the pin, but I’m not travelling now. Not where you or the brand want me to go at the moment – I don’t think it’s safe’…And this is even in countries there was no travel warning.
“I said to the [brand], you don’t want ambassador who’s unhappy or scared. It doesn’t make for a good look on camera! Secondly, I think don’t even try to fight it legally because he’s got enough reason to say everyone else is cancelling everything so why should he be travelling? I said let it go, don’t push this because it just makes no sense, there’s no point twisting anyone’s arm.”
Personal impact:
“It affects us personally. It’s daily life. My wife said, ‘If we go here on holidays, will we be let back in, or will the kids be under quarantine afterwards?’ It’s not just about looking at it terms of the sports industry, or an agency point of view, it just concerns everything we do now, day in day out. As a family man, as a father, I’m looking at what the school does and everything else, travel plans and holidays…it’s far-reaching.”
Event cancellations:
“Anything that gathers more than five people together in a room has something to answer for if things go wrong…If you’re [an event organiser], you really have to ask yourself is [going ahead] the right decision to take?…I think the responsible thing can only be to follow all recommendations from the World Health Organisation, from local governments, and whatever else. Really just think twice about hosting or staging anything until there’s a clear message that everything is sorted.”
Television audience bump:
“This is nothing new, this is what everyone has said for decades – pay-TV is crisis-proof. The last thing you give up on is your pay-TV sub. You’d rather save the money at the pub than the 10 dollars for a pay-TV sub…
“If this is now a result, that maybe more television is being watched…it’s perhaps a nice side effect temporarily. But, to be honest, it’s going to be a very short-term win…I don’t see too many benefits for anyone coming from this at all. It just affects everything, and the more industries that are affected, the less money there will be in the sports industry.”
International federation senior official
Threat to Tokyo 2020:
“Two weeks ago, I would have said we saw Zika coming up in Rio and everyone was talking about the question mark it put on Brazil hosting the 2016 Olympics…this kind of felt the same. But if you see the [coronavirus] spread now in Europe and all over the world, it’s a little bit more of a complicated story than Zika…Now it’s probably the biggest concern the IOC will have had for some time in terms of hosting an event…
“They’ve never postponed but I wonder if this could be a first. Everyone wants an Olympics. I think the Japanese want it. The IOC want it. Federations want it. So if it came to a vote – not that it does come to a vote – would you take postponement over cancellation? You’d probably choose postponement if it was feasible. It’s not easy, I’m glad I don’t have to make that decision.”
Pay-TV executive
“At the end of the day, when you have any of these viruses or scares, people stay in their homes and watch more TV and watch more sport. So there is a silver lining for us from that point of view.
“The biggest issue is broader economic impact. GDP will be hit, and there is a trickle-down effect that affects platforms and spending power of consumers. But this will be short-lived. We saw it with SARS – it blows over.”
Apac regional sports marketing agency executive
Positioning for recovery:
“Right now, for any medium which is pushing social gatherings, pushing people coming together, it’s tough. Especially in China, the government is actively against that. But as soon as this improves – and it will improve – we believe that our events will be an extremely powerful platform to bring people together again.
“Brands will need to come out. Brand will become more important – development, positioning, association, the creation of stories are going to be even more important given the sentiment in the market…
“We believe that we could have a surge in interest if we play it right and if we’re smart about how we position that. And we must be sensitive – we can’t look like we’re trying to leverage what is a terrible situation…
“I think as an industry we need to think very carefully about how we, in an appropriate and sensitive manner, talk to the market about how sport, sports sponsorship, sports attendance and sports storytelling is actually a hugely powerful way to help what is now a global community that feels detached from each other, nervous and scared. How do you tell that story, champion that story – because it is a story that I believe in – without sounding like you’re insensitive and trying to leverage a crisis? We shouldn’t be afraid of doing that – we should be confident of explaining why promoting ourselves, people spending money with us, people coming to our events, is part of solving the problem, healing from that crisis…
“That’s a big challenge, because it could be taken the wrong way. [We should] engage with stakeholders, probably including government about how to position that. The majority of sports organisations, especially federations, are inherently conservative and risk-averse. There are good reasons for that. But I feel there could be an opportunity lost if there isn’t discussion about this topic. And when I say ‘opportunity’ I don’t mean that from a selfish perspective of revenue, I mean from genuine perspective of sport healing, and brands and fans come back and re-engaging through sport.”
Apac regional sports marketing agency executive
Media response:
“The media needs to also play their part in maintaining a level of balance in what and how they are communicating. High levels of negativity only deepen angst, so where they can provide greater objectivity, that should be the case. And where events are proceeding behind closed doors, then, taking the spirit of [pay-television broadcaster] Sky in Italy, to broadcast on terrestrial TV is a significant way forward in ensuring the masses can still access the games they want to watch and create positive sentiment.”
Internal company response:
“The coronavirus is an unknown entity in terms of the extent to which it will impact the business. We are carefully monitoring the situation and contingency planning all potential scenarios from this point forward through to the end of year. The purpose is to gauge the impact on the business based on the current perspective/projections, relative to what may fall away – particularly any work being delivered in the live event space and how we can mitigate against any potential losses.
“We are closely liaising with the brands that we work with and associated rights-holders in relevant markets to review, discuss and determine associated impact and to align on any major decisions being made that would result in a cancellation.
“So far we remain in a good place, however, cognisant of the pace at which changes are taking place, and how rapidly we may need to review and respond in terms of scaling the business and ensuring we have the appropriate plans to deploy as necessary…
“The end is far from in sight and there will be plenty of twists and turns along the way, all eyes will be very much closely watching Tokyo and any further announcements or comments coming from the IOC.”
International federation – Badminton World Federation spokesperson
Overall impact on the federation:
“So far, a few tournaments have been impacted – either cancelled or postponed – but COVID-19 has mostly affected attempts to ensure the health and safety of all participants. This has had a moderate impact on costs and human resources. But we have not, at this stage, experienced any major impact on our general business.”
Sticking to calendar as far as possible:
“The Badminton World Federation is aware of all implications affecting the badminton and wider sports community in relation to COVID-19, particularly in regards to implications of non-participation of nations in tournaments and the effect this may have on rankings in relation to the Olympic Games.
“The BWF recognises that players and officials from these nations and territories may not be able to participate in some BWF-sanctioned tournaments easily. However, no concrete decisions have yet been made in response to these implications.
“These circumstances create a range of challenges, and because of the fast-changing nature of the situation, the BWF is working very closely with key stakeholders such as Chinese Badminton Association, all Member Associations, tournament hosts, sponsors, as well as the International Olympic Committee and International Paralympic Committee to align on global and regional measures being put in place.”
Advice to Member Associations:
“The BWF has asked all Member Associations and hosts to contact their national health authorities to make them aware that international players will be arriving in their country and to seek advice on prevention and necessary courses of action should an incidence occur.
We also recognise that each Member Association’s national health authority will have its own rules and procedures which differ region to region.”
