The coronavirus pandemic has brought the sports world to a standstill. It is already known that the Tokyo and Euro 2020 Olympics have been postponed to 2021, with the suspension of all sports, races and tournaments. Estimating the losses is practically impossible, because it is not known how long the pandemic will last. For some clubs the suspension of the competition for a longer period of time may mean practically liquidation, also sponsors will renegotiate contracts. - Until we see how the sports market will survive the first wave of the economic tsunami, we are not able to determine what will happen next," says Grzegorz Kita, President of Sport Management Polska.
- The coronavirus pandemic has in a way annihilated the world of sport. It is rare in the economy or in any activity for revenues and activities to suddenly fall to literally zero, and the sports industry has encountered this type of phenomenon. Games and sporting events have been massively suspended literally from one day to the next - emphasises Grzegorz Kita, President of Sport Management Polska in an interview with Newseria Biznes agency.
The coronavirus torpedoed women's Olympic qualifications in football and tennis Fed Cup with the participation of China, Taiwan, Indonesia, South Korea and Uzbekistan at the beginning of January. February and March brought another, initially postponed and then cancelled events. To begin with, UEFA decided that the European Football Championship would take place a year later, in 2021. A similar decision concerning the Tokyo 2020 Olympic Games was made by the IOC. To this must be added the completely halted football, tennis, NBA or Formula 1 competitions.
- The losses will certainly be enormous, calculated in billions of dollars or euros. However, at the moment it is difficult to calculate them precisely, because this situation is too new and dynamic. In the case of the Olympic Games it is said that their postponement to 2021 is currently a loss for Japan of 5.5-6 billion dollars. - indicates Grzegorz Kita.
According to calculations by SMBC Nikko Securities Inc., if the Olympic Games were to be cancelled completely, the Japanese economy could record a loss of as much as 1.4% of GDP, i.e. around 68-73 billion dollars. However, it is not only Japan that will lose - for example, the American media company NBC Universal collected advertising orders for 1.25 billion dollars.
- The suspension of the NBA's games for about two months from mid-March is a loss for the league alone of 1.2 billion dollars. The suspension of MLB, the American baseball game, is already costing 2 billion dollars, but this is all calculated in the belief that in one and a half to two months' time these games will start. If it is not possible to bring the season to an end in many games, these losses will be even greater - says the president of Sport Management Poland.
In principle, the problems have affected all disciplines, but in some of them the losses will be huge. Those that generated the biggest income will lose the most. Especially since some of the events were cancelled at the last minute, such as the Formula 1 race in Australia, cancelled on the eve of the start, or the Indian Wells tennis team cancelled after the drawing of the ladders, when all the tennis players were already in place. Just before the start, the organizers also decided to cancel the halfmarathon in Paris.
- The second type of losses are problems that result from the suspension of current activities in the case of sports clubs, both football and basketball or volleyball. These are mainly the proceeds from the match day. There are no supporters, no ticket sales, no income from catering and merchandising. The clubs don't make any money and are in a very difficult situation because they still have fixed costs, especially regarding salaries. Sponsors also cannot benefit from contact with fans - explains Grzegorz Kita.
The clubs' losses have already been felt by the players themselves. Most of them have decided to reduce their salaries, and some have decided to give up part of the fee themselves. For example, the Slovak club MSK Żylina went into liquidation - at first, it exempted the best-earners from contracts, and from April it ceased to function.
- The third group of losses are all kinds of renegotiations and contract reductions. If there are no matches, no sports competition, the TV will not pay for those matches or league queues that have not been played, either. But what's more, every sporting entity and every federation faces such a problem that sponsors will probably also have the right to renegotiate contracts and reduce their payments," says the expert.
Representatives of individual sports are also in a difficult situation. One of the tennis players, a leading doubles player, tried to make money by giving tennis lessons. While for the best, a few months' break from this sport will be time for rest and training, for the slightly weaker ones it may mean
/ Source Newseria