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SPORT BUSINESS INTELLIGENCE

Hans Westerbeek

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In a disrupted world, can a return to sport (business) provide hope and perspective?

(with Rochelle Eime, a shorter version of this article was published in the Herald Sun on 22 May 2020)

Unlike the definition of disruption, which reads along the lines of ‘a disturbance or problem that interrupt…’, it seems that during the last decade the world has quietly slipped into a comprehensive state of disrepair. Only when the worst bushfires in modern history hit the South East of Australia this year, did some people start to wake up to the reality of ecological disruption. And then COVID-19 hit, a human health crisis predicted by few and expected by even fewer. The pandemic has laid bare the global disruption that has crept up on humanity like a sniper, and hit us straight between the eyes. Suddenly post-neoliberal erratic political disruption has combined with economic depression, ecological disaster, social distancing and digital transformation – the latter the only force for the good in the current crisis (for the time being). All in all the perfect storm. 

Many industries have been hit hard as a result of having to socially distance individuals and communities in order to avoid health system overload. One of the most immediate, and still worst hit areas of business and community activity has been sport. Professional spectator sport and community-based participation sport had to stop operating overnight, and what seemed to be an untouchable and perennially healthy business model, was laid bare by the pandemic to be utterly vulnerable when being shut down. For community sport, the absence of weekly competition structures and development activities shut down community organised sport business immediately. As competitions are driven by State and National Sports governing bodies, and funded by individual player membership or registration fees, no competition means quick evaporation of cash flow. In professional sport, with players not playing there are no spectators who pay and no media to report, then there is no business to be done.  

However, some have argued that the pandemic offers the best opportunity to, for once and for all, advocate the fundamental place of sport in society. The pandemic is an advertisement for why physical activity, being physically active, and engaging in playful or competitive sport-like activities is vital to maintain or improve one’s physical, mental and social health and wellbeing. Since schools and businesses have been forced to send students and employees home, and health and fitness operators have not been allowed to open their doors to the public, one of the overriding (government and health) messages has been to remain physically active and engage in frequent exercise. Exercising has been one of only four reasons for Australians to be ‘allowed’ outdoors during stage 4 pandemic restrictions. Health promotion experts have long been crying out for politicians to focus on physical activity as a public health priority, to combat a range of chronic diseases that are crippling our health system and the health of individuals. But never before have so many people longed for the days that the parks and sporting fields could be utilised at will, and not in modern history have families engaged together in walking, running, cycling or park fitness than during these pandemic times. 

So being able to play sport and being physically active is important. Ironically, sport has not before been in a better position to showcase the value that it adds to communities. Sport organisations have the chance to be among the first to deliver hope and perspective to individuals and communities that are getting tired, anxious, impatient and stressed as a result of forced isolation from what was considered a normal life. The lifting of pandemic restrictions will only partly answer the question of how sport will return? Which sports will return first to baseline operations, and how will we play sport throughout ongoing social distancing measures? What are the risks, rewards, opportunities and challenges? Some of those questions will hopefully be answered when we complete a research project that is run by Victoria, Federation, and Flinders Universities investigating the physical, mental and social health of active and non-active Australians before, during and after social distancing measures were put in place. 

Some further answers are provided by David Hughes, who is the Chief Medical officer at the Australian Institute of Sport, and one of the architects of the Framework for rebooting sport in a COVID-19 environment. In this Framework a roadmap is presented for how sport can re-start its operations. The AIS Framework recommends a staged approach (Level A, B, C) where every level requires a risk assessment management, an analysis of safe environments and education of participants. It must be noted that the AIS Framework is about the ‘how’ and ‘when’ of returning to sport, it is not about how sport business can and will be conducted in the near future, nor does it consider the underpinning business models that fund and deliver sport.

In that regard and for what it is worth, wespeculate that community sport clubs will return first to a base level of business operation. As they are mainly run by (parent) volunteers, they will also have the immediate capacity to get children and adults back on the field to start training and engage in informal competition. This will not require massive funding injections. State and national sport governing bodies will be confronted by difficult (community) questions of what the immediate value is that they add to sport and that community members pay registration fees for. Those clubs that return to the core business of community sport – to play, enjoy playing, socialise together and connect the community – will thrive and outperform clubs and associations that focus on performance, premierships and player payments. 

Government, but also the health (insurance) and education sectors will more than ever realise the value that sport delivers to their business. Resilient communities, lower health costs and higher educational (and job!) performance as a result of being physically active may well stimulate structural investment in safeguarding community sport delivery from external shocks such as a pandemic. For example, government may decide it has to invest in the back office operations of sport governing bodies, and put government employed staff on the payroll to ensure the continuity of service to community sport clubs during times of extreme disruption.

Elite or professional sport will have its own challenges. Already there is widespread talk about the salary costs of professional athletes having to come down, or if nothing else, partly invest player payments in crisis funds that are kept by the league or player associations. In various professional leagues there is serious debate about the size of player lists and if there really is a need for the high number of specialist high performance department staff and also those in the administrative back office. Lean, mean and agile may well become the key concepts of sport business model transformation. 

In the end, we believe that communities will flock back to sport, and that demand for sport may increase (at least temporarily). If done right/well, sport can provide a unique opportunity to individuals and communities to come together, to play, to help each other, and to build resilience and resistance, first when social distancing is further relaxed and eventually post-COVID-19, to improve individual and community health. As for any good crisis, sport should not waste this one to expand its societal scope to include health, a ‘new’ focus that sport has largely neglected at the expense of building highly paid star player lists and striving for premiership flags. 

From a sport business perspective, it will be interesting to see which sports will ride this wave and which sports will drop off the back of it. This will partly be on the governing boards and executive managers but also be determined by the rules and format of the sport (game) itself – how easy is it to play the game and also, does the sport offer scope for social distance? Some sports will be better suited to offer health, fun, hope and perspective, and shall rise to prominence as they show to be more fail proof than others in times of disruptive crisis. 

Some of the issues raised in this article are debated on the 26thof May, when the Sport Australia Hall of Fame and Victoria University, in partnership with Sport Australia and the Australian Institute of Sport, organise the 5thNational Sport Integrity Forum. The Forum is hosted on the Zoom platform and livestreamed on Facebook. The theme for this year’s Forum is ‘a return to sport: risks, rewards, opportunities and challenges’. 

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