Coronavirus steals live sport's crown

Spectator sports flourish where elite athletic displays meet cheering fans and financial support from broadcasters and sponsors. In this paradigm, live sport is king.

And in a world starved of sporting action, fans across the world rejoiced when certain sports resumed play in June. 

But the contrast was stark. The Covid-19 pandemic has progressed at different rates in various countries. Infection rates are also at different stages based on the containment approaches adopted by governments. 

As such, while the German Bundesliga football tournament kicked off in spectator-less stadiums and the PGA teed off in Texas without fans on the course, the innovative new Investec Super Rugby Aotearoa tournament launched amid sell-out crowds, to record viewership figures.  

Talent retention vital to deliver spectator value

Amid these cost-cutting measures, a major concern for federations and teams is their ability to keep their most valuable assets – their players. 

Rugby unions in South Africa experienced a player drain when the Covid-19 pandemic activated an escape clause in contracts, and the lure of foreign currency proved too lucrative for some players to pass up.

“The concern is that when teams lose top players like Malcom Marx, not only is the team significantly worse off, but you weaken the local system. This means that you not only lose a mentor who can nurture younger talent, but the franchise also loses a financial drawcard. This will detract from the game and the ability to pull crowds,” elaborates Stransky.

When the dust finally settles and play resumes in some form, the key to a rapid return to sustainability and profitability will be delivering rugby games that fans want to watch.

The tournament pits New Zealand's five Super Rugby franchises – the Crusaders, Blues, Hurricanes, Highlanders and Chiefs – against each other and will run for 10 weeks. Each team will play a home and away game against all opponents for a total of eight matches. The team that tops the table at the end, wins the tournament.

It's a boon for international rugby fans, who are hungry for live sport, and for broadcasters like SuperSport, which will televise all the games, and the tournament's headline sponsor, Investec. 

According to Peta Dixon, Head of Sponsorships, Investec continued to support NZR as it worked on various contingency plans for the possible resumption of Super Rugby and the Rugby Championship in some form.

“The NZR had four different scenario plans for Super Rugby and the Rugby Championships, which they adapted as the situation evolved. We continued to engage and collaborate with the union to find out what they were planning. Our partnership approach and commitment has resulted in the great sponsorship opportunity offered by the Super Rugby Aotearoa tournament amid the crisis.”

And the figures speak for themselves. When the Blues hosted the Hurricanes, over 43,000 spectators packed into a sold-out Eden Park. According to media reports, it was the largest crowd for a Super Rugby match in New Zealand for almost 15 years. 

Similar scenes have played out at other stadiums across New Zealand, where attendance at the first four games averaged 26,000 – an increase of more than 105% on the wider Super Rugby tournament before it was shut down due to Covid-19, commented NZR chief executive Mark Robinson during a recent media conference call.

Dixon is confident that this innovation will deliver ROI on Investec's sponsorship and unlock additional value at a time when live sport has been decimated globally.

“Ultimately, the value of TV rights is about the product and the viewership numbers – one needs the big games. Getting the most eyes on games is the fundamental principle in the sports industry's ability to generate advertising revenue and deliver business value,” adds Stransky, who believes that the impact of Covid-19 is the perfect catalyst for change.

“The current need to limit international travel may prompt a change in competition structures, or may require a complete overhaul of the rugby season and where teams play. It might even encourage a return to traditional rugby tours, which would promote rugby enormously by taking the game and its stars to areas outside of major centres,” says Stransky.

A new model for sponsorship value creation

Ultimately, the survival and long-term sustainability of the sports industry will require a collaborative effort between federations, rights holders, broadcasters and sponsors.

“While sport will remain a massive passion point, the pandemic has forever changed the sponsorship landscape. The depressed global economy means federations and rights holders will need to relook their pricing, and increase value add and maximise ROI to retain or attract sponsors,” continues Dixon.

“Sport sponsorship must evolve beyond branding on a jersey. It needs to become a financially viable commercial offering because sponsorship money will be in short supply after the crisis.”

As a consequence, sponsors will increasingly demand multi-platform solutions. These should leverage traditional media at live events, on-the-ground supporter engagement, and engagement via digital channels that extends reach and impact beyond match day. But this will require investments from sports federations and broadcasters, at a time when many are cutting costs to remain sustainable. 

In addition, federations and rights holders will need to recalibrate media rights to reflect the market conditions and ensure that broadcasters can afford them amid shifting consumer spend and content consumption preferences, which are increasingly fragmented.