A Deep Dive Into Sport, Money and COVID-19
How have businesses and the business/economics of sport managed COVID-19?
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In this recent podcast by CEDA, Hans Westerbeek, Professor of International Sport Business and Head of the Sport Business Insights Group at Victoria University joined CEDA CEO Melinda Cilento and CEDA Chief Economist Jarrod Ball to discuss all things sport, money and how the COVID-19 pandemic has impacted the business and economics of sport at both the professional and community level.
Here are some of the question posed to Hans:
1. Do you think that we were getting the sporting balance right? [00:02:37]
It took us a year to really fully realise how serious the pandemic really was (and is). Coming to terms with it, we’ve now seen various options which sport can take, both at the community level and at the professional level; and there’s examples of best practise around the world, and examples of relative ignorance still happening as we speak.
2. Do you agree with this view that the pandemic bought a much needed change and reset for a number of sports? [00:05:15]
Sometimes we need these disruptive forces to be confronted with what is a unilateral business model that sport was applying to its sustainability and progress.
Sport has for far too long focussed on the one thing they do better than anyone else (to put a spectacle on the field), and because of the importance of that spectacle, and every revenue source derived from on the field performance, sport has been blind-sighted and myopic about the value which sport can create off the field.
3. Where does the money come from, and how you think tennis has adapted to this challenge? (Regarding the Australian Open, and the greater impact of the event to Melbourne’s economy) [00:10:09]
Without the sport activity, there is no sport business. All the value created, including the extended value in tourism, hospitality, accomodation, travel, mechanise, etc., is all centred around the fact the you have content on the field/pitch/court.
It’s about brand Melbourne. Whilst there was a lack of direct benefits to businesses this year, going forward with the Australian Open allows us to centre this word ‘MELBOURNE’ on every court which is being broadcast to 150 nations. When business opens up again post COVID, Melbourne is on the top of people’s mind when they start booking their flights again.
4. Is tennis where is needs to be in terms of making the most of the spectacle for those who are seeing it only on TV? [00:19:40]
Tennis Australia has significantly invested in digital innovation and producing science behind the performance and the media broadcast to make the product of tennis, both in stadium and on television more attractive.
5. Do you think that the Olympics are actually going to happen given the logistics, and just how big it is? [00:34:25]
The IOC, and to a lesser extent the Japanese government cannot afford for it not to go ahead.
They’re looking at different scenarios from business as usual, to no public, to spreading the events, to various other options that will allow them, if nothing else, to broadcast.
6. Community sporting clubs have their backs against the wall in terms of not being able to attract fees from players, etc. This is an important part of economics, the local economy, and the community. Are we doing enough to support that? [00:39:00]
Some research by the Australian Sports Foundation showed that 70% of local clubs will be in financial strife, and will not be able to maintain their operational expenditure in a way they were used to.
In many ways community sport, more so than professional sport, has been confronted with a business model that is solely dependant on their ability to put action on the field.
7. Which sport do you think has handled the pandemic the best? [00:43:30]
At the professional level, the NRL was best in terms of their responsiveness and the calculated risks which they took.
At the community level, cycling and golf have done particularly well. However, this partly because of their specific characteristics, and being more conducive to being conducted in a socially distanced way.