CAPE TOWN – Last year, we spoke to Junaid Moerat to hear his thoughts on how the business of sport would be impacted by the Covid-19 pandemic as well as his views on the future of sport. Now, just over a year since the coronavirus outbreak, we sat down with Moerat again to assess what the impact has been, how organisations have adapted, how accurate he was in his analysis of sport post-Covid, and where to from here.
Saying there have been many changes since the pandemic hit would be a gross understatement.
On a sporting front, we have seen cancelled, postponed or amended competitions, empty stadiums, and bio-bubble environments become the norm. Players’ and teams’ training schedules and sessions have been altered according to the ever-changing Covid situation and restrictions. Uncertainty has become the only certainty.
But how have we done in adapting to some of the biggest changes that have – or should have – prompted a shift to a more technology-savvy sports environment?
“The entire sports ecosystem has changed. With many traditional revenue streams disappearing virtually overnight, sports organisations are scrambling to remain financially solvent,” Moerat, who has worked in the digital-sports marketing industry for over a decade, said.
“We’ve seen the effects on broadcasting deals and commercial agreements, through to the match-day revenues. The continued suspension and cancellation of fixtures is causing major disruptions and leaving huge gaps in broadcasting schedules. The lifeblood of any sports organisation or team is its ability to create and participate in a commercially viable and attractive competition. The inability to do this means that sports organisations are unable to meet prior and future commitments to broadcasters.
During Moerat’s interview with IOL Sport last year, he anticipated a big change in content consumption due to the impact of Covid and called for sports organisations to increase their focus on the ‘revolution of content’.
“This disruption of live sports content should have prompted a major shift in the mindset of our sports organisations. We have seen an increase in fan engagement with OTT (over the top) and streaming platforms due to the large amounts of archived content available on demand. According to Delloitte insights, more people have at least one streaming subscription (68%) than traditional pay tv subscription (65%).
“Despite being able to stage fixtures exclusively for TV in more recent months, the restrictions on travelling have hampered the ability to create the necessary content. Additionally, broadcasters are experiencing a decline in ad revenues as the wider effect on the economy is felt. We will probably experience a short-term decline in the value of broadcasting deals which will ultimately lead to a decline in broadcasting revenues for teams.
“With stadiums being closed to fans, match-day revenues have practically been wiped out. This includes ticket sales, private suite sales, food and beverage, hospitality, amongst others. If this continues for much longer, how do we connect with fans that are not there? How do we recreate the experience at home?
“When analysing the impact of the pandemic on commercial revenues, there have been some positive aspects specifically related to sponsorships. In the previous article I spoke about sponsorships evolving into partnerships. In terms of major sponsorships, brands have largely honoured their sponsorship agreements during these uncertain times. This is significant as these partnerships and the revenue generated from them have been key to the sustainability of the teams. The relationships between sponsors and sports organisations have evolved to true partnerships that also focuses on value creation and social good.”
Moerat went on to explain that – given the unpredictability of the current situation – sporting organisations have to be geared to handle various scenarios in terms of putting out a product and going about business.
“With so many variables still in play, it has made it almost impossible to make definitive plans for the future. Instead, it will be a matter of keeping a range of scenarios in mind. What organisations can do and should have done prior to Covid, is invest in digital capabilities, from OTT platforms, virtual reality, artificial intelligence, and solutions that unlocks innovative revenue generation possibilities and enhances fan engagement all year round.
“Sports organisations will be competing harder for the same revenue that’s been taken for granted, however, those that continue to move their business to a digital, interactive business are going to be the ones that benefit more from the increased demand that exists once we move back to normalcy.”
When asked whether any factors over the last year has strengthened his stance on the need for acceleration in embracing the benefits of technology in sport and, by extension, the business of sport, Moerat explained: “Joe Favorito, the veteran sports communications specialist and Columbia University professor said, ‘we have to look at this, definitely, much more as a marathon than a sprint’. One thing for sure that we could not have anticipated was how long this pandemic would last, or for how long it would affect sport. This unique situation continues to put strain on sports organisations and will continue to do so in the coming months.
“Two things that we cannot ignore and that we have an obligation to recognise relates to the innovations and growth in female sport and athlete activism. This crisis has disrupted life as we know it and has shifted consciousness at every level of sport. Female sport has been on the rise, with increased participation rates, media coverage, sponsorships and significant investments being made.
“Athletes are leveraging their ‘influencer’ status to make it clear that sport should stand for more than just wins and losses. While many teams stood behind their players during protests around issues related inequality and injustice, there is still a lot of work to do. The sports world has been transformed by social justice and it has become a key tenet of the culture and brand of many teams.
“The ability to replace a big portion of traditional revenue streams with new revenue streams becomes an imperative for every sports organisations. The catalyst here is undoubtably the digital revolution of sport and our ability to grasp it.”
Read Moerat’s first interview here: The Future of Sport post-Covid-19