SPORT INDUSTRY FIASCO IN 2020

ABSTRACT

The study examines the impact of the coronavirus pandemic on each category of sports industry actors. The main purpose of the article is to identify ways to restore and further develop the sports industry. The article reveals the scale of the material and non-material losses of the industry and gives an idea of sports life at the height of the pandemic during the lockdown period. The study concludes that there are at least 3 complementary ways of developing a sports society.

Keywords: sports industry, the impact of the pandemic on sports, cybersport, online training, cancellation of sports events, self-isolation of athletes, AR and VR in sports.

Every sector of the sports industry, whether it's high-performance sports or sports journalism, has been impacted by the COVID-19 pandemic. In terms of the impact on sports, the spread of COVID-19 was the most significant event since the Second World War. For example, in its entire history, the Olympic Games have never been postponed [2, 5-14] (and their cancellation occurred only in connection with world-wide military conflicts). In addition to exposing the structural risks of the industry caused by the dependency on mass events, the crisis also revealed the need for systemic changes in sports organizations. What used to seem like the trend of the future – digitalization, AR and VR - is now a new reality. It is important that sports organizations fully analyze these trends and turn them into opportunities.

How did the sports industry cope with the pandemic?

After realizing the seriousness of the pandemic, all the actors in the sports industry tried to find the best way out of this situation. Athletes tried to keep in shape, using the space of their apartments, houses. To see the training process of famous athletes at home during the pandemic was even easier than in normal times. Athletes willingly shared their training programs in social networks (figure skaters Alina Zagitova and Evgenia Medvedeva posted video clips of home workouts with fitness bands; Formula 1 driver Romain Grosjean kept his head with a two-kilogram helmet in a horizontal position to train the neck muscles [7]).

Coaches and Employees of such sports studios as World Class, SM Stretching Russian and others recorded training sessions and arranged live broadcasts for everyone who wanted to lead a healthy lifestyle, even in conditions of self-isolation.

The organizers of competitions and sports events arranged online championships in Cyber sports, Cyber-football, Cyber-tennis and et cetera. Thus, pandemic has encouraged an active process of sports events’ virtualization. For example, Formula 1 created a virtual Grand Prix, where cars on the game tracks were driven by real people, including real drivers Lando Norris, Nicolas Latifi and so on [9]. As a result, cyber-sports helped not only to raise funds for the organizers of sports events and athletes, but also to some extent to compensate for the lack of the real communication during the quarantine period.

To what extent did the sports industry suffer?

The sports industry missed out on more than 60 billion dollars in 2020. The calculation is based on the forecasts of analysts. At the end of 2019 they estimated the profits from the competitions planned for 2020 at 135.3 billion US dollars. But the number of actual events held in 2020 was 53% less than the number planned. So, the revenue was approximately 73.7 billion US dollars [10]. Moreover, the projected growth rate of the sports industry for the next 3-5 years fell by around 3% in 2020, comparing to the year 2019 (while the difference between the actual and the expected growth rates is almost 5%) [2, 20-30].

Moving on to the details, the pandemic has affected the closure and bankruptcy of some private sports centers (XFL, California-based Yoga Works, Flywheel Sports filed for bankruptcy and the latter temporarily laid off 98% of its employees due to the financial strain [3]).

Moreover, not only many competitions were postponed in 2020 (the greatest case was the transfer of the Olympic Games in Tokyo), but some of them were completely canceled (the Ice Hockey World Cup 2020, the Wimbledon Tennis Tournament).

Also, the athletes who violated the self-isolation regime suffered reputational and monetary losses (tennis player Novak Djokovic has been heavily criticized, including threats and unacceptable wishes against him for violating the quarantine at the tournament he organized; professional boxer Artur Beterbiev was fined for violating quarantine).

Finally, athletes missed the chance to perform at the peak of their form, which affected both their psychological state and their finances. Financial losses are explained by the facts that some countries pay athletes money from the state budget for awards received at the Highest Championships; for some competitions, athletes receive high prize money; sponsorship and advertising contracts also bring them profits – and all this was missed. "For an athlete, it's not simply moving a flag in the calendar. You bring yourself to the peak of the form for the Olympics, somewhere underperform, sometimes sacrifice something, withdraw from the start, where you could earn - and all this for nothing," said Nikolai Yaremenko, editor — in-chief of the newspaper "Soviet Sport" [6]. He also added that for many athletes, participation in the Olympics was a dream that might never come true (because of the age or because of the participants list).

What are the ways of the future development of the sports industry?

The coronavirus pandemic is driving the development of the video game industry. Well-known companies, as BMW or Intel Cor. in recent years have begun to actively invest in this area. A rapid growth in the popularity of esports is observed: in March 2020 the total viewing time on the Twitch streaming video games platform increased by 60% compared to March 2019 [5]. The curious fact is that people have also began to watch esports competitions. All in all, it is possible to say that AR and VR as a global trend in sports strategy has risen its popularity sharply in the pandemic times.

The widespread isolation has also accelerated the development of online platforms for training at home. Mobile apps become an integral part of everyday life and help organize your daily routine, proper nutrition, individual workouts. The Ministry of Sports of the Russian Federation has launched the Internet portal "Train at home" to keep fit at home [4].

Finally, many sports associations and organizations were able to develop new strategies. The result was impressive:

• Russian Prime Minister Mikhail Mishustin approved a new Strategy for the Development of Physical Culture and Sports in the Russian Federation until 2030, which included provisions to fight the consequences of the pandemic.
• The International Association of Women's Professional Tennis held a large-scale rebranding campaign, involving after-quarantine fans engagement activations.
• The NBA used a partnership with Microsoft to attract fans to the virtual stand.

References:

1. Department of International and Regional Cooperation of the Accounting Chamber of the Russian Federation. "Sports in the context of the COVID-19 pandemic". Digest, 2020, p. 5, 16-18, 34-38.
2. PricewaterhouseCoopers AG. “Sport industry: system rebooting”. PwC’s Sports Survey, 2020, p. 5-14, 20-30, 46-56.
3. Sport Centers Filled For Bankruptcy [Электронный ресурс]. – Режим доступа: https://www.businessinsider.com/fitness-sporting-goods-retailers-filed-bankruptcy-liquidation-closing-stores-2020-9
4. Министерство Спорта Российской Федерации Запускает Акцию «Тренируйся Дома. Спорт – Норма Жизни» [Электронный ресурс]. – Режим доступа: https://minsport.gov.ru/press-centre/news/34807/
5. Просмотры Twitch во втором квартале 2020 года превысили 5 млрд часов [Электронный ресурс]. – Режим доступа: https://cyber.sports.ru/games/1087318970-prosmotry-twitch-vo-vtorom-kvartale-2020-goda-dostigli-5-mlrd-chasov.html?utm_source=yxnews&utm_medium=desktop.
6. Разная боль спортсменов и организаторов. К чему приведет отмена Олимпиады [Электронный ресурс]. – Режим доступа: https://360tv.ru/news/tekst/otmena-olimpiady/
7. Российская газета – Федеральный выпуск №75 [Электронный ресурс]. – Режим доступа: https://sportrg.ru/2020/04/07/kak-sportsmeny-podderzhivaiut-formu-v-domashnih-usloviiah.html
8. Спорт, который сильнее вируса: как спортивная индустрия переходит на онлайн-форматы [Электронный ресурс]. – Режим доступа: https://www.forbes.ru/biznes/397427-sport-kotoryy-silnee-virusa-kak-sportivnaya-industriya-perehodit-na-onlayn-formaty
9. Счет побери [Электронный ресурс]. – Режим доступа: https://www.kommersant.ru/doc/4637610.