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Volume 26 No. 134
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SBJ Unpacks: Coronavirus -- Olympic-Sized Dilemma

 

The $1 trillion aid package proposed today was a vivid reminder that the coronavirus pandemic is not just a health issue, it’s also a deeply economic one hitting many Americans hard during this national shutdown. Legislators from both sides of the aisle met most of the day about a plan that could pay as much as $1,200 to individuals and $2,400 to couples, helping quickly restore some level of income for idled workers as well as others who are reeling.

Not lost in the economic news was word from the CDC that younger members of the U.S. population could be more at-risk than originally thought, and a recommendation from the State Department for U.S. citizens to avoid any international travel, something that could have continued sports ramifications.

While the nation's capital debated how best to respond to COVID-19, another high-profile case hit close to home in the sports world. Saints coach Sean Payton told ESPN that he tested positive this afternoon, marking the first known case of someone from the NFL world with the illness.

We’re left wondering what tomorrow’s news will bring.

 

 

 

TEAM USA SPONSOR COULD LOOK TO RECOUP ATHLETE FEES

  • New U.S. Olympic team sponsor Eli Lilly & Co. is asking potential Team USA athlete endorsers to give back some of their fees if the Olympics are canceled or postponed beyond its contract term, sources who have seen the proposals tell SBJ’s Ben Fischer. While some decrease in payment is not unreasonable given the widespread virus-related disruption, the company can expect resistance to major givebacks.

  • The request sits at the heart of the dilemma facing Olympic marketers right now. Most Olympic-sport athletes generate almost all of their commercial value during the Games’ two-week window, but the heavy promotional season would start in the next few weeks. An established Olympian might still yield great benefits for a brand -- particularly a health care one right now -- in the coming months even if the Games ultimately are delayed.

  • Olympic deals typically include bonuses for making the team and medaling on top of firm base payments. Lilly signed its one-year deal with U.S. Olympic & Paralympic Properties just last month so its athlete deals are coming together during the virus scare. Lilly is looking for athletes whose families have been affected by migraines, psoriasis, diabetes or breast cancer.

 

AT LEAST FOUR NFL TEAMS DEFERRING SEASON-TICKET PAYMENT DEADLINES

  • The Texans and Jets are the latest teams to give season-ticket holders a reprieve from their upcoming payments, joining announcements earlier this week from the Packers and Giants. “We’ve suspended all payments in March,” said Texans VP/Communications Amy Palcic. “We will reassess at the beginning of April, with regard to this and anything else that’s been canceled or adjusted.” Jets Senior VP/Communications & Content Eric Gelfand said the club hasn’t put a precise date on it, only promising fans that any due dates “in the coming weeks” won’t apply.

  • While the timing of the virus has not impacted NFL games, the associated economic slowdown is coming amid high activity in season-ticket renewals, sales and payments. New Jersey alone saw 15,000 new claims for unemployment on Monday, which Politico reported is 12x its usual rate. With the status of the virus, government-mandated shutdowns and team sales cycles varying widely, NFL HQ in Manhattan has not issued any league-wide guidance on the subject.

 

 

MANY COLLEGE COACHING CHANGES LIKELY ON HOLD

  • College basketball coaches on the hot seat might buy themselves another season because of sensitivities related to coronavirus, sources tell SBJ’s Michael Smith. Many universities are heading into severe financial headwinds because of lost revenue from tuition, housing and sporting events. A costly buyout in a coach’s contract might be enough to prevent a firing, at least for now. If there’s a strong financial implication that comes with a change, “you’re probably going to wait,” one source said.

  • The day after Selection Sunday is typically filled with news about coaches being fired. That wasn’t the case this week. Athletic directors are considering the optics of firing a coach in the middle of a pandemic, in addition to the financial hit. It’s not a good look. “A lot of people are pumping the brakes on their searches,” another source said.

  • There are also logistical components to consider. With travel at virtually a standstill and many people confined to their home, it’s extremely difficult to arrange in-person interviews and campus tours for prospective coaching candidates. “ADs are really focused internally right now on managing their finances,” a source said. Considering the pandemic, are ADs really going to go find $1 million or more to make a coach go away? It’s not likely, at least until something changes.

 

NHL CURATING CONTENT FOR LEAGUE PLATFORMS

  • The NHL will soon release a Netflix-like experience of curated content on the league’s website and YouTube channel, SBJ’s Mark J. Burns reports, in addition to daily programming across other NHL social platforms. As part of what the league’s calling "NHL Pause Binge" amid COVID-19, fans will have access to over 100 classic games from the 1950s to now and behind-the-scenes programs such as "Road to the NHL Winter Classic" and "Behind the Glass," among other content. NHL Chief Content Officer Steve Mayer: “This is something that’s unique to this period of time, something that we felt would be very cool and it’d be one-stop-shopping to binge watch everything NHL.”

  • Mayer explained that roughly a dozen producers and editors, who are now working remotely, are cutting up new material, including weekly motivational speeches from players and coaches that’ll release starting Monday, and a bracket-style competition around the greatest moments from the 2019-20 season, which fans can eventually vote on. Additionally, between tomorrow and April 30, the NHL and Sportsnet will give fans an opportunity to watch on-demand full replays of this season’s games via the NHL app, league website and on NHL Live in Canada.

 

 

DOUBTS OVER INDY 500 CONTINUE TO GROW

  • Doubts over whether the Indianapolis 500 will run as scheduled in late May have grown over the last week -- but today, they seemed to grow by the hour, according to SBJ's Adam Stern. This morning brought the announced news that F1’s Monaco Grand Prix is cancelled for 2020, and SBJ first reported around the same time that Indianapolis Motor Speedway execs are indeed considering a postponement for the Indy 500, which is currently slated to take place May 24.

  • By the end of the day, the AP's Jenna Fryer tweeted that new IndyCar/IMS Owner Roger Penske told her that he was “non-committal" on the Indy 500. "Lots of moving parts. Working on many options. … I am not going to let this short-term issue impact my commitment to IMS or to the league.”

  • Any exact postponement plan that IMS is working on has yet to emerge. IndyCar CEO Mark Miles told SBJ in a text message: “Our objective is to run as scheduled, but we are monitoring all developments and planning for all contingencies." While the May 24 date falls after the expiration of the CDC’s eight-week major event ban recommendation, the race itself is the culmination of not just several weeks' worth of community events around Indianapolis, but also a couple of weeks of practice for drivers.

  • The first Indy 500 was held in 1911, and it has gone on hiatus only twice -- during World War I and World War II.

 

CBS REACHES INTO MARCH MADNESS VAULT FOR PROGRAMMING

  • CBS will run classic NCAA Tournament games this weekend during time slots that would have been devoted to this year’s tournament, according to SBJ's John Ourand. On Saturday, it will show 1982’s North Carolina-Georgetown national championship game at noon ET; 1983’s N.C. State-Houston national championship at 2 pm; and 1992’s Duke-Kentucky regional final at 4 pm. On Sunday, it will air three national championship games: 2008’s Kansas-Memphis at noon; 2019’s Virginia-Texas Tech at 2 pm; and 2016’s Villanova-UNC at 4pm. The following Sunday (March 29), CBS will show three more national title games: 1985’s Villanova-Georgetown at noon, 1997’s Arizona-Kentucky at 2:30 pm and 2010’s Duke-Butler at 4 pm.

  • Without live college basketball games this weekend, TBSTNT and truTV will return to their normal slate of entertainment programming. 

 

LOSS OF GAMES COULD CUT 15-20% FROM ARAMARK REVENUE

  • Aramark has $1.3 billion in cash available to weather the fallout from the global coronavirus pandemic, SBJ’s Karn Dhingra reports. To increase its financial flexibility and liquidity, the concessionaire borrowed $230 million remaining on its $1 billion revolving line of credit to increase its cash availability.

  • It’s still too early to gauge the full impact of the pandemic on the company’s operational results, but an overall drop of 15-20% in operating revenues is expected, due to flexible cost structure of its business model, geographic mix and diversified client portfolio, which includes sports venues. Venues and facilities under Aramark’s sports and leisure line of business generally have mid-single digit operating margins.

  • Among the major concessionaires, Aramark will have the second-most lost games in MLBNBA and NHL and third most in MLS, according to data compiled by SBJ's David Broughton

 

SPONSORSHIP CONSULTANT SAYS OPPORTUNITIES EXIST

  • With games shut down, most of the assets that sports sponsors traditionally turn to are in moth balls. Tickets, arena signs, broadcasts, hospitality -- it’s all inert. But one sponsorship consultant says there are ways for brands to take advantage of some of what they’ve already purchased. “Opportunities are slim, but they are there,” said AJ Maestas, founder & CEO of Chicago-based Navigate Research, a firm that specializes in sponsorship analysis, advising properties, brands, universities and agencies. “For our brand clients and for buyers, what we’re saying is take advantage of that intellectual property that you purchased. Those rights, marks and logos -- they still have that same impact, whether you’re reminded at point of sale or it’s seen online. So there’s plenty of things that are jumping. Social, digital, mobile, television, gaming. These things are taking a leap forward with all this down time. But people still love those athletes. They still love those teams. So if you can remind them of your association, you’ve got a heck of an opportunity there.”

  • For lots more from Maestas, listen to our latest SBJ Unpacks podcast.

 

WEIGHTLIFTING FEDERATION MAKES QUALIFICATION CHANGES

  • Following a two-day online meeting, the Int'l Weightlifting Federation’s executive board agreed upon a new Olympic qualification system and submitted the procedure to the IOC for approval, according to SBJ's Chris Smith. The IWF has not made public the details of the amended process, but USA Weightlifting CEO Phil Andrews says the new system will advance the end of the qualifying period to March 31. With no qualifying events on the calendar before the end of the month, that means the IWF’s current Olympic ranking will effectively be locked in. Competitors who were scheduled to compete at upcoming qualifying events will be able to count those toward the minimum number of events required by the IWF for Olympic qualification. The IOC is expected to approve the new system on Monday.

  • The formation of a new qualifying procedure follows the Wednesday postponement of the Pan American Championships, originally scheduled for April 14-24 in Santo Domingo. That event was the final Tokyo 2020 qualifier that had yet to be canceled or postponed. Continental weightlifting championships in Europe and Africa were previously moved from April to June, but they will no longer impact Olympic qualifying.

  • Under the proposed qualifying procedure, USA Weightlifting would send the maximum eight athletes to this year’s Games. Unlike some NGBs with centralized athlete communities, USA Weightlifting’s athletes are located throughout the country. Andrews says the NGB has been in close contact with members and has informed athletes that their stipends are guaranteed. “We are being very honest and open, with clear communication and lots of empathy for the way their lives have been turned upside down,” said Andrews. 

 

 

SPEED READS

  • The suspension of live horse racing at Aqueduct in Queens comes as a backstretch worker tested positive for coronavirus, SBJ's Liz Mullen reports. The individual, and his roommate, had been quarantined since developing symptoms on March 13 and he tested positive this morning, NYRA said in a statement. This individual, who was not named, lives and works at Belmont Park.

  • Data from comScore shows that despite a lack of live sports, there hasn't been a big drop in traffic to sports sites from desktops and mobile, reports SBJ's Austin Karp. For the period of March 2-15, there were 456.2 million total visits to sports sites in the U.S. That is down only 2% from the prior two-week period (Feb. 17 through March 1), when 467.8 million visits occurred.

  • The Golden Knights today pledged to donate a minimum of $500,000 to part-timers and hourly on-call employees who were scheduled to work the final regular season games at T-Mobile Arena in Las Vegas. Goalie Marc-Andre Fleury kicked off the initiative by pledging $100,000 to the cause, which now makes the Bruins the lone NHL club that hasn’t publicly stated any financial support for TD Garden game day staffers amid the COVID-19 outbreak. 

  • One word to sum up Adam Silver’s appearance on “SportsCenter” last night? Transparency. Jackie MacMullan on “The Hoop Collective” podcast said, “That authenticity showed through. He looked to me like a haggard, worried commissioner. Which is exactly what we would expect he would be, because these are difficult times.” ESPN’s Tim MacMahon: “Silver was everything you would hope a commissioner, or anyone from a major leadership standpoint, would be. He was calm, he was measured. I did think he was as transparent as he possibly could be.” Brian Windhorst: “We let it run on ‘SportsCenter’ for almost 25 minutes, which doesn’t happen for anyone. That tells you how important it was.”

  • UFC being one of the last major sports organizations to cancel events was up for discussion on "Ariel Helwani's MMA Show" podcast, with ESPN’s Marc Raimondi saying, “It was ridiculous when Dana White said on Saturday night that they were trying to move UFC London to the United States and it was basically going to be a makeshift card put together through newly-signed fighters and pretty much whoever was available. To me, that’s not the UFC.” Helwani: “What are we doing here? ... It’s like we’re just trying to put on a card for the sake of putting on a card. That’s when it started to feel weird and it started to feel like we were going back to the early ‘90s where we’re running away from government regulations.” ESPN’s Eric Jackman called Saturday’s fight in Brazil “very strange.” He said, “In the back of your mind, you’re thinking, ‘should this fight really be going on?’” 
  • Jesse Marsch, the American coach of Austria-based soccer club Red Bull Salzburg, has had a unique experience dealing with the sports shutdown. Marsch told SI’s Grant Wahl the club held their most recent training session last Friday, with all players operating off home programs since then. For most players, that means daily jogs on public streets, while adhering to the one meter distance recommendation by the country. Marsch said his top priority is looking out for his players. “We have a lot of 18-, 19-, 20-year-olds from different countries that are living alone right now. … We need to make sure we’re checking in on them and making them feel like they’re still taken care of.”

  • Callaway Golf has replaced their podcast advertising reads on “No Laying Up” with dedicated segments on how to stop the spread of COVID-19. Golf blogger Job Fickett tweeted, “Reading the room and encouraging public health to an audience demographic that needs to hear it. Cheers.” 

 

SBJ UNPACKS -- WEATHERING COVID-19

  • ICYMI: Check out the most recent editions of our "SBJ Unpacks" podcasts around COVID-19:

    • SBJ examines the pandemic's impact on sports sponsorships with AJ Maestas of Navigate Research.
    • Attorney Mikaela Whitman talks about how sports businesses are answering the question, “Am I covered?” and what the insurance market will look like when events return.
    • Joe Asher, CEO of William Hill U.S., joins to discuss COVID-19’s impact on sports betting.
    • SBJ's Bill King and Ben Fischer talk about how coronavirus is disrupting Olympic qualification events and what that may mean for the Tokyo Games.

 

 

 

Something related to coronavirus and sports business catch your eye? Tell us about it. Reach out to Austin Karp (akarp@sportsbusinessjournal.com) and we'll share the best of it.