Necessity is said to be “the mother of invention,” so it should come as no surprise the COVID-19 pandemic forced innovation across the pro sports landscape. From new brand placement opportunities to the creation of virtual experiences, leagues (and their media partners) did their best offset lost revenues, appease sponsors and engage fans as games were played behind closed doors. But with vaccine distribution ramping up (more than 1.7 million Americans are being vaccinated per day) and the fans’ return to venues nearing, we thought it was an opportune time to explore advancements arising from—or accelerated by—the pandemic, which are likely to carry forward in a post-COVID world. Conversations with a handful of senior-level team executives, league executives and venture capitalists lead us to believe the following sports business trends are here to stay.
New brand placement opportunities
Since last March, MLS has given their clubs permission to add a secondary sponsorship patch on game-day shorts, and both the NHL and PLL have begun placing sponsors decals on team helmets (presumably in an effort to offset lost revenues/provide existing sponsors with additional value). Mike Rabil believes there is going to be even more sponsorship integration “on the field, on the sidelines, on the coaches and on the players” in a post-COVID world, as leagues look to capitalize on underutilized assets. The PLL CEO said his league is working to introduce several new sideline partnerships in time for the upcoming season and is considering adding a third sponsorship patch to the game jersey (Ticketmaster adorns the back of every uniform, and four teams also have a patch partner on the front). “We’re likely going to remove the number from the arms of the jersey so we can sell sleeve patches,” Rabil explained. “That’s valuable real estate because the camera angle is shot from the side of the field.”
Teams behaving more like media companies
Historically speaking, said New Jersey Devils president Jake Reynolds, “Corporate sponsors and partners have been heavily invested and interested in in-game, [on-ice], at-the-event assets. But one of the elements [sports] has shown during this time is the value (see: eyeballs, engagement) that can be driven from the digital side–both around the games (think: second-screen experience) as well as with ancillary programming.” At the time of the 2020-2021 season opener, the Devils had not played in 310 days. Reynolds explained how the club “reinvented tactics” that would both keep the fan base engaged and meet their partner needs. The three-time Stanley Cup champions ended up producing a series of virtual events during the pandemic, including a draft-day party (presented by Geico) that drew 18,000 fans. Reimagining live experiences those at home is “part of [a greater] transition we’ve seen, of sports teams thinking of themselves more as media companies,” Reynolds said.
The need for teams to communicate among themselves—and with their fans—during a time when shelter-in-place orders were in effect forced the adoption of new technologies. Meredith McPherron (CEO, Drive by DraftKings) explained during a recent Sportico webinar, “Sports Investment in Technology,” that initially the inability to interact in person presented “a big challenge from a technical standpoint for sports teams and live entertainment.” But she said, “It was a lightning strike really for the entire industry that accelerated an adoption of technology that was badly needed. [The inability to engage in face-to-face communication] created an impetus to experiment with a lot of different technologies and fan engagement experiences (like watch parties) that has kind of unlocked a powerful solution for the future.”
The video-game industry thrived during the pandemic as people were stuck in their homes. While no one expects the number of hours spent gaming to remain flat once society at large resumes “pre-pandemic normal” lives, the overarching premise that gaming “carries over into the offseason and can help [a league] capture and engage a younger audience” isn’t going away, Rabil said. As a result, look for pro sports leagues to continue with/accelerate their video-gaming initiatives. The PLL CEO indicated the pandemic served to reiterate the need for his league to introduce an in-console game.
Focus on fan safety
Fans are starting to return to venues in some locales, and many of the operational and fan safety precautions in place today are likely here to stay—at at least for the distant future. “Whether it’s fan entry [procedures] or touchless forms of purchase [or ticketing], giving fans the confidence that when they walk in the building it’s going to be as safe as if they were watching in their living room is going to be a focal point,” Reynolds said. Warriors owner Joe Lacob stated during a recent Sportico Live event focused on “the fan experience in a post-COVID world” that “airflow ventilation, masking and testing” are the three things teams can do to make patrons feel safe.
In pre-COVID times, Big East presidents would meet three times a year—in person—to discuss athletic endeavors. Challenges brought on by the pandemic have forced them to meet nearly 20 times since last March, though none of those encounters have been face-to-face. Conference commissioner Val Ackerman said she expects there to be less “non-game” travel within sports moving forward. “How we do things is going to get re-adjusted,” Ackerman said. “I just look at all the time I’ve spent over the years getting on an airplane and traveling somewhere for a two-hour meeting. In our line of work, we travel weekly, and a lot of it can be cut back. Zoom may be our savior in many ways. Not to eliminate the in-person stuff. But to cut back on it in some way.”
Smaller stadiums and arenas
“Stadium capacities might be smaller [moving forward],” Sam Porter (chief strategy officer, D.C. United) theorized. Remember, attendance figures were on a steady decline before COVID-19 hit, and with club owners now having to weigh the very real possibility of a pandemic that could shut down their venue indefinitely, it’s fair to wonder if they’ll have the appetite to construct increasing expensive venues. The DCU exec surmised if team owners realize they “can build [a new stadium or arena] for 35% less and have scarcity on tickets rather than 20% of the building empty, you could see [downsizing].”