The coronavirus outbreak is a serious human tragedy, affecting hundreds of thousands of people. More than 175 countries and territories have reported cases of COVID-19. It is also having a growing impact on the global economy with real recession fears in the short to mid-term. Sport has not been immune to this either. The abrupt suspension or in some cases even cancellation of the competitions caused a shock in all major sports, not only from a sporting perspective, but also in terms of its economic impact, especially on clubs.
In European basketball, the (possible) impact is estimated to be significant, mainly due to loss of game day as well as commercial revenues incl. sponsoring. While this can lead to budget cuts in the short to mid-term, the impact on the liquidity of the clubs can be devastating and existential, especially for the small and mid-sized clubs competing in Tier 2-4 European competitions as well as domestic leagues. Some of these clubs might become bankrupt and cease their basketball operations.
As of today, unfortunately there is still no slow-down in the number of infections in certain countries and it cannot be argued that the curve has begun to flatten, meaning that the uncertainty about the future scenarios is still high. Mainly there are two recovery scenarios that are deemed likely by some experts: delayed recovery and prolonged contraction. In the former scenario, the spread of the virus shows signs of slowing down by mid-/end of April, having a seasonal character and no major number of infections in other parts of the world. In this scenario, the recession will still kick in during 2020, however a genuine recovery will start in Q4 this year. In the latter scenario, the contention and mitigation of the pandemic takes more time, expanding its economic impact to a longer period of time. Initial signs of an economic turnaround will be observed in Q2 2021.
Good news is, without underestimating the seriousness of the situation not even a bit, at some point the humanity (and the basketball community) will win this fight and go back to normal. This is directly dependent on how we are reacting to this extraordinary situation. Besides adhering to preventive measures like staying at home and reducing our social contacts to the absolute minimum, there are certain responsibilities that every individual or institution in life need to resume.
In this article, we are focusing on the responsibilities of the (basketball) clubs. It is fully understandable that clubs are fully concerned about their financial situation and are going through a tough period with extremely high level of uncertainty. Figuring out the exact impact of the pandemic to their basketball operations is for sure currently on the top of their agenda. On the other hand, the suspension or cancellation of the competitions have given the clubs an unexpected break from their extremely busy schedules that were overfilled with trainings, games, sponsoring activations, media days etc. Now, the life has slowed down a little and is providing us with the opportunity to think about what is really important in life. In that context, following thoughts and actions might be worth revisiting and reflecting on for the (basketball) clubs.
Remembering the core function of clubs within the European model of sports
In the European model of sports, sports clubs are not profit-maximizing enterprises, but rather represent an essential institution in the society, namely an “association” whose main goal is to create an environment of social interaction and solidarity for its members and fans. This aspect cannot and shall not be disregarded, especially in such critical and challenging situations, when the society needs good examples of solidarity and leadership. Keep in mind that your communities desperately need your support in these days. Clubs may be going through a difficult phase from a financial standpoint. However, this does not (or should not) impair their ability to undertake actions for the benefit of the society. This can be done in different forms, such as organizing donations for the institutions/people in need, creating awareness and demonstrating gratitude for all the great efforts of people working in critical roles such as the doctors, nurses, other healthcare personnel, people working in supermarkets and other organizations to ensure a smooth supply of essential goods and services despite all the challenges, social institutions such as homeless shelters and any other similar jobs that are serving currently the humanity. Clubs can and should become a social platform, a catalyst for strengthening the collective moral and playing a leading role in showing solidarity.
Communicating with all your stakeholders… everyday!
One aspect of this solidarity is keeping the communication channels fully open and active. In these uncertain times when nobody really knows how and when this emergency situation will come to end, it has an enormous importance to keep in regular contact with all key stakeholders, obviously adhering to the rules of social distancing. Your key stakeholders include but are not limited to your fans, members, employees including players and coaching staff, business partners as well as sponsors. Speaking of the latter, sponsors are among your key partners. Some of them, depending on the industry they are engaged in, are and will be going through some difficult times. Make them feel you are fully standing by them. Obviously some of the sponsoring contracts might be cancelled, however this may not be always the best solution. Other alternatives, with mutual benefits, should be on the table and discussed by both parties with full acknowledgement of the current situation. Different stakeholders have different needs, but one is common: solidarity and mutual understanding!
Exploring new ways of interaction
Digital technology is offering a great opportunity to enhance social networking while keeping the social distancing. There are quite a few very good examples of clubs that are embracing this great opportunity and increasing their level of engagement and communication primarily with their fans via social media and also e-sports. There are endless opportunities in this area some of which can even compensate the loss of sponsorship revenues from game related activities. Digital communication can by no means fully replace the personal interaction. However, in case of such severe limitations of social life, it can literally be a life saver. This experience should also bring an “aha”-effect for several basketball clubs. Those clubs who neglected investments in their digital infrastructure are definitely more severely impacted by the crisis than the ones who are capable of keeping their dialogue with their fans intact through different means.
Spending time for (re-)thinking about the vision, mission and future strategy of your club
Nowadays existential concerns, especially for some of the clubs, might be overwhelming. It is still important to find the time during this “break” to revisit your clubs’ vision, mission and strategy. Going back to the roots, reflecting on the founding principles, values and the main reason for the existence of the clubs will ensure a rebuild and strengthening of your clubs’ fundament. This extremely unusual period of time can, in that regard, represent a great opportunity for learning and development for the clubs. Once the pandemic is over, which will be the case sooner or later, clubs should be able to operate on a more sound basis and be more aware about their mission, role as well as their responsibility for the communities that they are living in.
Coronavirus pandemic is for sure a very unfortunate event for the entire humanity that nobody would have wished to experience. However, ultimately it is up to us how to react to it. For clubs, despite its devastating impact, it can be a “blessing in disguise”, if they manage to keep calm, interact with all key stakeholders on a regular basis and focus on what really matters.
Stay safe and healthy!