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Let’s be honest on ‘new normal’

The 2020s didn’t start with a whimper. No, the new decade went off with a bang as the sporting world slammed into the first global pandemic since the 2002-03 SARS outbreak hit more than two dozen countries and led to nearly 800 deaths.

Although its onset was gradual, COVID-19 quickly made SARS look like a meaningless preseason game. We saw millions of cases and World Health Organization projections of 3% death rates. That was horrific.

In response, global governments, health authorities and municipalities frantically sought to control the disease with quarantines, lockdowns, closed public places, fines, jail time, travel bans and social distancing. Overnight, the pandemic body-slammed us.

It’s true. In sport, we’ve been gut-punched as hard as any sector out there. No practices, scrimmages, games and very few events. No activations, hospitality or VIP treatment. Nada.

It easily exceeded everyone’s all-time worst-case scenario. 

We saw postponements, cancellations, layoffs and, for the XFL, outright demise. Government reports on labor markets in the U.S. and Canada showed devastating losses, with Statistics Canada reporting sport was the hardest hit of all industries with a loss of 59% of all employment (positions and hours) from February to April.

As North America’s summer approaches (with MLB bravely suggesting its intention to restart in July), we should get serious about the “new normal” and pandemic “truth.” 

In sponsorship circles, this uppercut delivered eye-gouging financial implications. Event registrations were refunded or kicked to the future, travel was obliterated, activations tossed, revenue projections buried, agency billings vacated and cash flows pounded.

To help you navigate this WWE ring of pain, we’d like to offer some considerations (think of it as the Undertaker’s spring cleaning) that might help. First, for sponsors who invested in properties but saw activations canceled or moved, consider the following:

1. Keep prioritizing employee, athlete and spectator health. And don’t compromise the welfare of suppliers, contractors, partners or direct stakeholders. Consider investing or reallocating your sponsorship resources toward areas related to COVID-19 (i.e., food insecurity, front-line health care).

2. Allocate what funds you can from canceled deals to alternative programs or future programs that can achieve the same sponsorship objectives. For instance, if you planned on-site activations at a now-canceled mega-event, consider moving that activation to a future digital activation reaching the same consumers (e.g., Nike’s “Play for the World” campaign).  

3. Create new opportunities for digital activations by leveraging unallocated funds toward revised objectives. For instance, esports consumption with males under 35 and over 60 jumped notably during the pandemic.

4. Monitor government (federal, state, county, provincial and city) and health organization decisions for wage subsidies, event subsidies and support for hard-hit industries, including sport.

5. Take a long-term approach toward building digital and streaming activations for 2021 and beyond. COVID-19 accelerated this shift. Don’t ignore it. For instance, work with co-sponsors (where properties are shared) to build these activations for the post-COVID-19 world. 

Second, for properties, which are faced with postponements or cancellations, think harder about making your sponsors (or potential sponsors) happy. They have needs and will eventually find dollars for creative solutions. While never easy, try these thought-starters:

1. No matter what, keep building scenario plans. Design Plans D, E and F and count on unexpected decisions rewriting each of your scripts. COVID-19 realities change daily, so get proactive.

2. Take major precautions to over-protect your fans, participants, staff and suppliers during the pre-vaccine window. For fanless events, protect the players like a grocery store protects its customers. 

3. Launch a digital version of your primary product. Many people fear leaving their houses. You may have to bring the game to them. 

4. Build pandemic-proof digital activations that sponsors can build programming around. For instance, if your sponsor planned extensive product sampling around an event, consider online activation delivering product trial via postal or delivery services.

5. If you must postpone or cancel, offer partners attractive options for the next version of your event/activation. A reduced deal? Enhanced benefits? Free rights fees for the next version?

Finally, for agencies (and one of us authored a SponsorshipX study noting sponsorship agencies were among the hardest hit), keep in mind the following:

1. Prioritize the health and wellness of your agency, particularly individuals you retained or anyone implementing pre-vaccine activations in public spaces.

2. Bring your clients creative ideas on sponsorships with digital elements (esports, fantasy sports, sims, video games, online music concerts, etc.). Additionally, offer platform concepts they’ve never considered (create a video game, build websites, prioritize social media, generate educational content, etc.).

3. Offer clients activation ideas that don’t include public events. Consider co-sponsorship, unique digital assets or anything supporting front-line health workers.

4. Allocate staff time for deep strategic thinking and out-of-the-box research that build off ideas found above. Do it for the short and long term of “new normal.”

5. In each of the above, leverage COVID-19 as an opportunity to develop products or activations that are streaming/digital-only. Simply put, don’t seek one-time Band-Aids. Go for longer-term solutions. Pivot if you must. Mandate that your firm conduct aggressive forecasting that includes unimaginable scenarios.

In the end, recognize that sport organizations must allocate scarce resources carefully, communicate with newfound awareness and start preparing for the likelihood of future pandemics.

Why? Because the “new normal” started months ago.

Rick Burton is the David B. Falk Professor of Sport Management at Syracuse University. Norm O’Reilly is director of the International Institute for Sport Business, University of Guelph.

Questions about OPED guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com

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