Seven CFOs from professional sports teams across football, basketball, hockey and soccer gathered virtually to share leading practices and discuss viewpoints with KPMG as they navigate the complexities of the 2021 season.
“It took everyone time to get used to being locked down; it will take time for people to get used to going back out,” one CFO stated. This was a common sentiment among the group, along with the view that everyone — including fans, staff and media — would have to be flexible during the reopening process.
As fans return to live sporting events, ticket pricing, stringent protocols and expectation setting present challenges. To overcome these hurdles, CFOs discussed several strategies:
Throughout the pandemic, all the CFOs found revenue forecasting challenging. Forecasting expenses was more feasible and within their control. However, returning fans made financial losses “feel more real” once the highly reduced revenue was added back into their ledgers.
With the lack of ticket and in-game revenue, teams are looking to identify alternative revenue sources now and in the future. From creating a marketplace to order and pick up food, to leveraging sports betting in states where it’s legal, teams are finding new streams of revenue that could add a new dimension to the sports experience and help to offset the losses incurred during the pandemic.
Fan confidence in returning to live sports is on the rise, but will that continue if the game day experience, in the words of one CFO, “feels different”? The new normal will very much be specific to the region and city, and could even evolve game-to-game, putting an added emphasis on effective communication. For example, a team with a fan base drawn from a geographic area where vaccination rates are high may be able to get to 100 percent capacity sooner than teams who draw from vaccine-hesitant areas.
Concert bookings are starting to come back for some facilities, which is also a positive indicator. With fans eager to return to in-person events, one CFO predicted that his venue’s concert bookings could be its highest ever in 2022.
What stakeholders consider normal in late 2021/early 2022 will be very different from what was considered normal pre-pandemic. Teams must get creative about how to deliver a great experience for fans in order to be successful in both the short and long term.
To arrange an interview with KPMG’s Shawn Quill, please contact Mike Alva. You can read more KPMG insights into the sports industry here.