Performance Research expects event cancellations to cost US economy US$6bn a month.
It would be “a mistake” for event organisers in the US to expect the same marketing strategies used prior to the coronavirus outbreak to attract fans when live sport eventually resumes after the health crisis, according to Jed Pearsall, the president of Rhode Island-based agency Performance Research.
Sports events in every corner of the globe have been brought to a halt to contain the spread of coronavirus, which is already having a significant financial impact on organising bodies, leagues and teams around the world as they miss out on ticket revenue and other sources of income. Pearsall, though, does not believe that sports event organisers should count on fans coming straight back through the door after the pandemic. Instead, he says fans might be tentative at first and could need convincing to return to live events.
“I think it’s about welcoming people back, it can’t be business as usual,” says Pearsall, whose company carries out analysis across the event, sponsorship and experiential marketing industries. “I think it would be a mistake for event organisers to think once they’re clear to open their doors from a safety standpoint that people will just be coming back the way they were before.
“It’s been typical in the United States that event organisers have had the upper hand with ticket pricing, and I think fans have always put up with it knowing that they’re going to pay excessive fees to get into events that are sold out. But I think now fans will have a little more sense of, ‘let me decide how badly I really want to go to this’.
“I’ve seen some articles with event organisers saying there’s going to be a big pent up demand for live events, but I actually think it’s going to be more of a wading back in than diving straight back in.”
Bill Doyle, who serves as vice president of Performance Research, notes that while most sports will currently be “caring for the immediate needs of what to do”, such as rescheduling, discussions will soon shift to how organisers can make fans “feel safe and secure” enough to come back to live events.
Doyle says that could mean responding to changing behaviours in the wake of the pandemic as people become more conscious about things such as their personal hygiene.
“There’s now a new threat, so events have to adapt to this,” says Doyle. “Those types of things that seem very minor are going to play a part in people’s decisions whether or not to go back to events. How sanitary is it? How close am I? Am I crammed in next to people? There’s now a whole new reality that events are going to have to think about, things that no one ever thought about as being a barrier to attending events [before].
“I think events are going to have to realise this and do everything they can to welcome people back and show that they’re aware of what’s going on. They can’t ignore it and say the lights switched off and now we’re all safe.”
While sports in particular will have to prove themselves to be socially aware when they return to action, Pearsall adds that it will also be important for sponsors to strike the right tone rather than try to turn the health crisis into a business opportunity.
“Sponsors that go out and just plaster their own message about themselves will risk being ignored,” he says. “People are very emotional right now and I think it’s going to last for a long time, and to just go back to normal will be too awkward and be distasteful.
“So I think there will be a wave of sponsorship that is more about community and doing good and incorporating more civic initiatives into the programme that show they’re not just there for the dollar, but they’re there for society as well. That’s a shift that’s been happening anyway, but I think this will accelerate that.”
Pearsall and Doyle were speaking to SportsPro after Performance Research, which provides consultancy to companies that spend a combined US$500 million on sponsorship each year, released a study claiming that the cancellation of US-based sports and events through April had caused economic losses of some US$6 billion.
The figure only accounts for major, nationally recognised US sports that had been called off, such as the National Basketball Association (NBA) season and Nascar races, but Doyle says he would expect the economic impact to “easily double and triple” if local professional sports, college conferences and regional events were to be factored in.
When asked about the continued impact events cancelled due to the coronavirus will have on the US economy, Doyle paints an equally bleak picture.
“If we’re talking about just the big major national events that our government would recognise, I would expect that it could be US$6 billion a month throughout the summer,” he said.