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Volume 21 No. 39
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How terrorism could be ultimate disrupter

Disruption is something that we spend a lot of time discussing — on these pages, in conference hallways and in my classrooms here at Wharton.

Most of these conversations focus on the media space, with emerging technologies, distribution methods and business impacts, and with opportunities of said disruption the focal points. But, unfortunately, global events keep leading me back to what I believe would be the greatest disrupter of all: a terrorist attack at a televised sporting event.

The terror attacks in Paris, including a thwarted attack during the France-Germany soccer match, once again highlight the nature of the world in which we have lived since 9/11. While the security in place at the stadium in Paris worked effectively and prevented the suicide bomber from entering, it is not hard to imagine the scenario in which it had not.

Enhanced security measures in the face of terroristic threats must balance the fun game-day experience being marketed to fans.
Photo by: GETTY IMAGES
I’m certainly not trying to be a fearmonger, but what if, instead of the blasts from outside of the stadium being heard inside during the match, it had occurred in the seating bowl? The human toll would have been catastrophic, with horrific images being beamed live throughout the world. The global response would likely mimic the path that has followed other terrorist attacks, including an outpouring of sympathy and anger, a call for swift military action against the perpetrators, an uprising of patriotic fervor, and impassioned calls for us to carry on living the way in which we live, lest we let the terrorists “win.”

Hark back to the outpourings of emotion at games played at Shea Stadium and TD Banknorth Garden after the attacks in New York and Boston, with these events at public gathering places serving as important moments in the healing process and the beginnings of a return to normalcy. But those were community responses to attacks outside of a stadium, not inside. I am of the mind that an attack inside a sports facility would have a devastating impact on the sports industry. It would, in many ways, crater the business of sports.

Why? We go to games for entertainment, as a distraction from whatever is transpiring in our day-to-day lives and not to be scared or worried about what might happen. Think about it: It is already difficult enough for the industry to address the delta between the at-home versus the at-game experience without these fears. How much would this difference increase if fear became a heuristic we associate with going to a game?

How so? The disruption to gate receipts, premium seating, concessions and other facility-driven revenue would be immediate. Even if only one in five people stayed away — a 20 percent decline in attendance — the outcome would be impactful, with a typical big four league suffering a nine-figure revenue hit. The industry would become even more reliant on media and sponsorship revenue. But what about the optics of games being played in front of more sparsely attended stadiums and arenas? Would there be an additive effect on the remaining facility-driven revenue? Would the disruption be temporary or permanent? Would the industry be able to effectively reimagine its business model to accommodate the changing nature of its revenue? If disruption leads to a business opportunity, how will this be manifested for the sports industry?

And while stadium security measures continue to become more sophisticated, none can be fail-safe, especially when we are rightfully cognizant of balancing safety requirements with the fun, vibrant game-day atmosphere that we are selling. No one wants a police state, yet everyone wants to be safe.

Though a terrorist attack on a sports facility is hardly inevitable, it would seem prudent for the industry to prepare for the worst.

Scott Rosner (srosner@wharton.upenn.edu) is a practice associate professor in the legal studies and business ethics department and the faculty associate director of the Wharton Sports Business Initiative at the University of Pennsylvania’s Wharton School. He also is the co-host of the “Wharton Sports Business Show,” which can be heard on Tuesdays from 4-5 p.m. ET on SiriusXM Channel 111.