Sports transformed

One of the best performing segments of the entertainment and media industry in recent years has been live events. Within this, sport has done particularly well, especially as a means of engaging the younger crowd at a time when it is ever less common to watch live linear TV.

COVID-19 disrupted the global sports industry, derailing sports properties worldwide as matches and live sports broadcasting came to a grinding halt. Revenue streams dried-up and sponsorships vanished.

But the good news is, the virus failed to dampen fans’ passion for sports, fuelling up sports properties’ resilience and catalysing game changing strategies by most industry players. This natural resilience of sports properties has led to positive sentiments across the industry - over 70% respondents in PwC’s Sports Survey 2020 expect the sports industry to fully recover to pre-COVID-19 levels by 2022-2023.

This report, a prelude to our annual Global Entertainment and Media Outlook 2021–2025 launching later this month, aims to cover an overview of the industry. We deep dive into the impact of the pandemic on the global sports market and investigate how sport properties around the world have responded, survived and thrived with successful strategies in the face of this global health crisis. We believe COVID-19 has accelerated the transformation that could prepare the sports industry for the years ahead.

Short term revenue disruptions

The pandemic had caused most sports events globally to be cancelled or postponed. Match day, sponsorships and media revenue are dependent on live events. Today, restrictions required to resume matches have placed immense financial pressure on sports properties globally.

Despite resumption of events from June 2020, gate receipts remained below pre-COVID-19 levels. When TV broadcasting of live events resumed, the collective resumption of events previously postponed caused overscheduling. However, the revenue impact is expected to be short-term. Positive sentiments indicate full recovery by 2022/23.

Varied impact faced

Impact based on business models: Sports that have completed a higher proportion of games prior to lockdown and those with a lower proportion of match day revenue are less affected.

Impact based on sports profile: Compared to indoor and contact sports, outdoor and individual sports typically have lower COVID-19 transmission risks and require fewer precautions to resume.

On road to recovery

In the later half of 2020, live sporting events resumed with precautionary measures, allowing for TV broadcast and sponsorship advertisements to continue. TV viewership picked up rapidly, whereas match day revenue may take longer to recover.

Rapid development and implementation of vaccination could help accelerate this progress. There is positive sentiment across the industry for a full recovery by 2022-2023.

How sports properties responded to COVID-19 impact

Navigate the short-term adversity
Do it differently, do it digitally
Unleash the potential to thrive

Navigate the short-term adversity

Following COVID-19’s disruption to live games, sports properties were faced with immense pressure to preserve income while exploring potential cost optimisation. However, with the introduction of vaccines, leagues around the world started rolling out various innovative measures to facilitate and accelerate the return to normal. The sports properties:

Resumed live games with the necessary precautionary measures for business continuity
Accelerated in-person attendance recovery by embarking on campaigns to encourage vaccination and testing
Recreated in-person viewing experience for live content such as artificially created stadium sounds and commentary
Utilised game archives in live content vacuum
Optimised cost with salary negotiation and cash flow management.

Do it differently, do it digitally

As viewing and engagement increasingly shifts online, sports properties have taken the opportunity to accelerate their digital transformation. The sports properties:

Expanded digital revenue streams through tailored content, new channels
Enhanced digital fan engagement and user experience through virtual livestreams, tailoring content with creative programming across different digital touch points, maintained active social media activity for fan engagement and conducted virtual fundraising efforts for social causes
Expanded e-commerce offerings in athleisure and digital invigoration of collectibles.

Unleash the potential to thrive

Many sports properties have turned towards new revenue streams beyond the traditional sports business model to grow. Many capitalised on their brand IP and diversified into new content formats. The sports properties:

Branched out into non-match content genres for the younger audiences (i.e. on-screen documentaries)
Explored and leveraged growth opportunities in esports
Accelerated augmented and virtual reality adoption in sports to enhance traditional sports viewing experience
Pursued international expansion opportunities, especially into emerging markets.

Three key considerations for sports properties to emerge stronger in the new world

Build business resilience

Anticipate challenges and potential threats to formulate a crisis contingency plan.
Formulate guidelines and plans as countermeasures.
Build flexibility into the business model and diversify revenue streams.

Expand the digital experience

Expand digital revenue streams on the back of current and emerging trends.
Explore new digital touch points with the fan base, leverage existing assets and technology.
Formulate a holistic digital media strategy, tailoring programming and format to suit audience profile on individual platforms.

Embark on growth opportunities

Explore new growth opportunities, including creative storytelling for non-live sports.
Activate, engage, and cross-sell to the younger audience.
Consider international expansion opportunities to unlock long-term growth potential.