SBJ Unpacks: Coronavirus -- The State Of The Industry
During an interview that aired during today’s CAA World Congress Comes To You -- a virtual presentation of the annual SBJ event originally scheduled for this week in Dana Point, Calif. -- Verizon Media VP & GM of Sports Geoff Reiss captured the ambitions of many -- both in the sports world, and out. “There's nothing I want more right now than to be able to go with my family to a ballgame,” said Reiss, who led Yahoo Sports before its acquisition by Verizon, and before that oversaw the launches of ESPN.com, NFL.com, NBA.com and NASCAR.com. “That is like the North Star, that for me is hanging out in the distance. When can we go to a game together? Because that means we're together, and it means we're doing something we love.”
Those who best understand what it takes to staff a sporting event -- moving fans in and out of a venue, seating them in close proximity to each other, serving them food, taking their payments -- would say if that day is on the horizon, it’s a distant one. When games resume, they almost certainly will do so, at least initially, without spectators. And when spectators are welcomed back, some may find themselves uncomfortable sitting shoulder to shoulder. People get twitchy passing each other in the bread aisle at the grocery store. How do you think they’ll feel about packing into Section 108?
New York Gov. Andrew Cuomo said today that the state’s restrictions appear to be slowing the virus there. The Senate finally reached agreement on a $2 trillion stimulus package. The markets responded positively. Elsewhere around the globe, the news was horrific. There is only so much solace you can take in today’s updates being ever so slightly better than yesterday’s.
But that’s the thing about the North Star.
The darker the night, the easier it is to find. And no matter how thick the clouds, you know it’s still there.
Thanks, Geoff. That quote is making the rounds.
-- Bill King
ANHEUSER-BUSCH HAPPY PARTNERS ARE OVER-COMMUNICATING
- Anheuser-Busch InBev VP/Partnerships, Beer Culture & Community Nick Kelly praised its league and team partners during this time of uncertainty for “over-communicating everything” to the brewer in regard to their situation, SBD's Lucas Smith reports. “They’ve been extremely responsive and proactively calling us and telling us, ‘Hey, I just don’t know,’” Kelly said today during the first session of the CAA World Congress Comes To You virtual conference. He added the smooth process has been helpful in providing guidance, because league officials are “learning it at the same time we’re learning it.”
- Kelly emphasized the importance of communication at this time, especially since the impact on A-B InBev’s overall business potentially won’t be known for months. “We just want to be able to help you if there's a way for us to help you,” Kelly said. “The other part is just be able to empathize with what you guys are going through, so we're not asking you a hundred questions or we're not putting you in a position to prioritize us over something that's far more important.”
- A-B InBev today announced it is redirecting just over $5 million from its sports and entertainment investments to the American Red Cross. So when will the brewer re-enter the marketplace? “Most of our brands don't take themselves too seriously, so it's figuring out what is the right time to provide a level of levity, of fun, of poking fun of being stuck in the house, of providing value through entertainment or looking forward to when we get back,” Kelly said.
- Kelly said the “biggest word is patience, and it is across the board,” when it comes to navigating the current landscape. “It's being patient to figure out what the best time is and the right messaging to get these big events and venues back up and running,” Kelly said. “It's also patience with all your partners and all your fans that, the ability for them to roll over and buy another year of season tickets after they may be directly impacted."
RIOT GAMES PIVOTED EARLY WITH CHINA OUTBREAK
- Riot Games Head of Global Esports Partnerships & Business Development Naz Aletaha noted her company was “one of the first” to be impacted by the coronavirus outbreak, “because we own and operate a very large league out in China,” notes SBD's Andrew Levin. Speaking during today's virtual CAA World Congress Comes To You event, Aletaha said that after Riot's League of Legends competition was suspended in China in late January, the game publisher "quickly realized, just globally, that this was going to be a situation that would likely expand to other regions, if not all regions.” Aletaha: "We knew it was something we needed to prepare for, and because our leagues are set up in such a globally integrated way, we quickly were able to share best practices.”
- Aletaha noted at present, Riot's four biggest regions -- North America, Europe, China and South Korea -- are all "back online and they're able to continue to deliver to fans.” She added, “What's been exciting to see is the shifts in how we actually produce our broadcast. We've been able to move to an online-only format, and so, you're going to see our competitions continue. You'll see pro players competing at home -- from their homes -- same with the crew, same with our on-air broadcast talent. Everybody's going to work remote.”
TOM GLICK EMPHASIZES IMPORTANCE OF LIVE EVENTS
- Tepper Sports & Entertainment President Tom Glick, whose company operates the NFL's Panthers and expansion MLS Charlotte club, believes that while the sports industry is coming up with creative at-home viewing experiences during this pandemic, those innovations "cannot be at the expense of the live event" once sports returns, SBD's Lucas Smith notes. “We're social animals, sports are shared experiences. It's about being part of memories with friends, with family. I don't see that changing and I see people investing more money in experiences going forward.”
- Glick noted the onus will be on the sports industry to make sure at-venue experiences “stay fresh and innovative and convenient and affordable and all these things.” He also shared a couple of messages on navigating the current landscape. “Stay solid and take care of your people, your teammates,” Glick said. “Make sure that your organization is solid, that your people are reassured that they're staying balanced, that they're staying accessible and switched on to each other.” The other message was to get ready and be prepared for when the pandemic subsides, as “people are going to be looking to us to return to playing games and doing the things that they love about our industry.”
USATF CEO CREDITS NIKE DEAL FOR STABILITY IN CRISIS
- USA Track & Field CEO Max Siegel says his organization is less exposed to the economic ravages of coronavirus than most Olympic sports because of its 23-year, $400 million sponsorship deal with Nike, which earned Siegel rare public criticism from his predecessor and other critics for its length. “For all of those people that criticized me for doing a long-term Nike deal, this is the reason why,” Siegel said. “While I never could have predicted coronavirus, I was in NASCAR in 2008-09 when the economy tanked, and sponsors left, and they never came back like they were. The teams that had foresight to do long-term deals, it really gave them the financial stability where they didn’t have to panic.”
- Like many Olympic NGBs, USATF’s cash flow has trickled to a standstill. Sanctioning income, membership income and merchandise sales all depend on the 8,000 competitions USATF sanctions or organizes annually, and those have totally stopped. The delay of the Tokyo Olympics will further hamstring NGBs. The annualized value of the Nike deal is nearly half of USATF’s 2018 total revenue of $33.4 million.
- Siegel said he cannot rule out layoffs or other staffing reductions, but they are evaluating expense reductions from a position of relative calm. “We’re going to do what’s prudent and responsible, but we have enough solid footing we’re not in panic mode,” he said.
DELAWARE NORTH PLACING MANY EMPLOYEES ON TEMPORARY LEAVE
- Delaware North starting April 1 will put two-thirds of its 3,100 full-time employees on temporary leave because of the pandemic, SBJ's Karn Dhingra reports. The company, owned by the Jacobs family, operates a massive concessions business and owns the Bruins and TD Garden. Full-time employees placed on temporary leave will receive medical, dental and vision benefits for eight weeks and a full week of pay for the first week on leave.
- Delaware North’s remaining employees will take an indefinite reduced rate of pay and thousands of the company’s frontline part-time employees at more than 200 sports and entertainment venues, restaurants, casinos and parks in in the U.S., U.K. and Australia are no longer being scheduled to work. The company’s airport locations continue to operate, but at a reduced scale.
UNITED CENTER BECOMING LOGISTICS HUB DURING CRISIS
- United Center will serve as a hub in Chicago’s fight against the coronavirus as the arena and surrounding campus will be used as a logistics hub, SBJ's John Lombardo reports.The venue will be used as a food distribution center, first responder staging area and medical supplies collection center. “On behalf of the Chicago Bulls, Chicago Blackhawks, our athletes, our front offices and our dedicated United Center personnel, our thoughts and support are with the people of this great city and state. Together, we will get through this,” said the teams announced in a joint statement.
WOOD MEMORIAL POSTPONED AS PART OF AQUEDUCT CLOSURE
- The New York Racing Association has suspended live racing at Aqueduct through at least April 5, SBJ's Liz Mullen reports. As a result, the Wood Memorial has been postponed to a date yet to be determined. Historically a major prep race for the Kentucky Derby, the Wood Memorial had been scheduled for April 4. NYRA suspended live racing on March 19, following the confirmation that a backstretch worker who lived and worked at Belmont Park tested positive for the coronavirus.
- Meanwhile, Churchill Downs Inc. announced the suspension of horse racing at Florence-based Turfway Park in accordance with Kentucky Gov. Andy Beshear's "Healthy at Home" executive order issued today. Turfway Park was scheduled to end its current meet on March 28. The track's backside will remain open for training because it falls under the “life-sustaining business” category as it provides “food, shelter, and other necessities of life for animals.”
ARAMARK CONTINUES TO MOVE UNUSED FOOD TO NON-PROFITS
- Major U.S. concessionaires continue to donate food to non-profits in their local communities to help those in need during the pandemic. Aramark recently sent 25,130 pounds of food from venues across the country with postponed or canceled games and events to non-profits. Notably, the concessionaire sent 10,000 pounds from NRG Stadium, which hosts the canceled Houston Livestock Show & Rodeo for three weeks in March, to Second Servings of Houston, a non-profit that redistributes leftovers from food businesses to fight hunger.
- The concessionaire also sent food from Rocket Mortgage FieldHouse (Cleveland), PPG Paints Arena and PNC Park (Pittsburgh), RingCentral Coliseum (Oakland) and Wells Fargo Center (Philadelphia).
- William Hill U.S. CEO Joe Asher said he will contribute his entire salary to a foundation set up to lend financial support to about 600 employees that the company recently furloughed, SBJ's Bill King reports. Asher also encouraged staff who kept their jobs to do the same. Sportsbooks worldwide have seen steep declines in revenue during the shutdown, which stripped their sites of the most popular betting options.
- The AP reported this afternoon that the NHL has now extended its request for players and hockey staff to stay away from team facilities until April 6. Originally, the league and its union told players to head home through the end of March. To date, only two unnamed players -- both with the Senators -- have tested positive for the coronavirus.
- WaitTime, an artificial intelligence tech company used by the likes of AEG, Legends Hospitality, Levy, the Heat and Sabres to improve wait times in concession and bathroom lines, has been enlisted to battle the pandemic, SBJ's Karn Dhingra reports. WaitTime Founder & CEO Zachary Klima said the New South Wales government in Australia has mandated a project to monitor the real-time occupancy of coronavirus testing facilities with the company’s tech. WaitTime deploys cameras in concourses powered by algorithms that can count the number of people in an area or line and determine if they are waiting in line or passing through. Venue operators have a back-end analytical dashboard, where they can make decision to make lines more efficient.
- Esports Observer's Graham Ashton reports the upcoming ESL One Dota 2 tournament in L.A. will now be played entirely online in response to COVID-19. The event will now take place March 28- April 19 and will feature five regional leagues with a best-of-three round-robin format. The event had originally been scheduled to take place over a few days with all teams on-site.
- Warriors coach Steve Kerr, who was set to be an assistant under Gregg Popovich for USA Basketball at the Tokyo Games, said he’d been texting regularly with the Spurs coach about a potential postponement, which both coaches agreed felt “inevitable.” Kerr told Bleacher Report’s Howard Beck, “Disappointment for sure. … But you have to couch any sort of disappointment professionally with the perspective of what’s happening in the real world.” Kerr said he’s spending the shutdown in San Diego with his wife, three children and their significant others, which makes for a full house. “Highly recommend the jigsaw puzzle in these times. We just finished Wrigley Field.”
- The N.Y. Times reports that Gov. Andrew Cuomo said New York City’s social distancing measures will include a "limited pilot program to begin closing some streets to automobile traffic to give pedestrians more space outside, and to institute new rules to limit density in the city’s playgrounds.” The sports tie: “No basketball,” Cuomo said.
SBJ UNPACKS -- WEATHERING COVID-19
- ICYMI: Check out the most recent editions of our "SBJ Unpacks" podcasts around COVID-19:
- Jim Kahler, Executive Director of the Center of Sports Administration at Ohio University, to discuss the impact of the coronavirus on distance learning.
- Venue Solutions Group’s Russ Simons discusses how the coronavirus has impacted the facilities industry.
- Tom Farrey of the Aspen Institute's Sport & Society Program talks about the impact of a pandemic on youth sports.
- SBJ examines the pandemic's impact on sports sponsorships with AJ Maestas of Navigate Research.
Something related to coronavirus and sports business catch your eye? Tell us about it. Reach out to Austin Karp (firstname.lastname@example.org) and we'll share the best of it.