While these content pivots helped to transform fan engagement, this model falls short of delivering commensurate returns on sponsorship spend.
Without the spectator and viewership numbers that live sport attracts, corporate sponsors cannot justify their investments, which will likely place future spend under pressure. And a lack of sponsorship and broadcaster revenue will be financially devastating for federations, with significant knock-on effects for professional sports.
“It will be a massive disaster for any sporting code if revenues dry up,” explains former Springbok flyhalf and rugby commentator, Joel Stransky.
“No games mean no TV revenue and no gate money. While many sponsors continue to pay to retain valuable naming rights, without a return to live sport in the near future, it becomes a question of how long will they be willing to pay?”
The estimated cumulative revenue loss for the global professional sports industry in 2020 from missed event-day operations, media sales and sponsorship rights is a staggering $61.6 billion, according to a report
by the sports marketing agency Two Circles.
In response, federations have announced cost containment measures to ensure their survival during the Covid-19 pandemic.
For example, SA Rugby announced an industry financial impact plan to cut R1.2bn from its budget by the end of the year. The plan was collectively designed and concluded by organisations representing SA Rugby, provincial unions, players and rugby industry employees in South Africa.
“The group identified our collective areas of financial risk and what savings had to be made and then identified a plan to mitigate those risks,” explains Jurie Roux, SA Rugby CEO.
“We have put together a plan that will ensure the industry will be positioned and resourced to get straight back to action as soon as we are permitted.”