Sports CFOs remain optimistic on the industry’s financial rebound

Six CFOs from professional football, baseball, basketball, hockey and soccer teams recently gathered virtually with KPMG to share new perspectives regarding the financial impact of COVID-19.

“If there is any industry that is going to bounce back, it’s ours,” the executives agreed. Despite all that their franchises have gone through during the past year, they remained tremendously optimistic that their organizations were, or would be, turning a corner in the near future. 

This feeling was, in part, buoyed by successful technology enhancements that would not only help inspire fans to feel more confident about the safety of attending a live sporting event, but also enhance their experience and ultimately lead to increased revenue. The key areas that underpin growing confidence and optimism are:

  1. Health and safety protocols for fans returning to games: Teams shared their approaches to enabling the safe and effective return of fans to game and how critical getting this right is to increasing capacity. A common protocol discussed in the session was dividing the facility and parking lot into zones. Fans were not allowed to leave their assigned zones in case contact tracing became necessary. One CFO noted a pitfall of zones in a smaller facility was that the sole merchandise shop was inaccessible to half the fans. After listening to fan feedback, the concourse was opened with directional signage indicating permissible routes. Testing was implemented by some teams, especially those with open suites. One team also facilitated testing at its practice facility before games for fans seated near players. In some teams, testing was required if fans were indoors in suite or club seats. Teams are reporting that fans feel safe and word of mouth among the core fan base is reinforcing efforts to bring fans back.
  2. Relationships with local government agencies: There were examples of both great collaborations and frustrating exchanges with state and local government agencies. One team realized a best practice to meet with the city health director after every game to ensure there were no community spikes associated with home games. Overall, as long as teams were following league-mandated protocols, which were very thorough, the executives felt good about the decisions being made. The situation became more complicated if a facility was hosting an event sanctioned by another governing body, requiring operational adjustments. All agreed these relationships were critical to enabling them to maximize and increase game day participation.
  3. Technology enhancements: The pandemic has been a “huge tech accelerator” and teams are finding that fans are amenable to changing entrenched habits. One CFO reported instituting mobile ticketing and parking. The team importantly realized increased spend per fan when it trialed mobile ordering. People ordering concessions had smaller wait times, creating a better fan experience. Others planned to pilot next-generation technology such as separate kiosks with prepackaged concessions and paying via phone apps. Cost was a major consideration as some of the technology, especially upgrades related to an enhanced concession experience, can be expensive, and CFOs are focused on justifying ROI. However, mobile ordering and contactless environments are also opening new sponsorship categories.
  4. Conversations with lenders: The consensus was that it’s best to be proactive with lenders as they will be more understanding, especially in the current climate. The financial shortfalls were not a surprise, and some franchises asked for longer periods of waivers up front. Lenders “knew it was coming.” There was a shared sentiment in these lender conversations that the current situation is temporary and that the franchises will bounce back in the long term. In conjunction with these efforts, CFOs emphasized that cost containment continues to be important and forecasting is a key focus.

New policies and processes implemented because of the COVID-19 pandemic may prevail as new best practices and set the foundation for a sustainable return to sports that is more resilient than ever before.

To arrange an interview with KPMG’s Shawn Quill, please contact Mike Alva. You can read more KPMG insights on the sports industry here.

 

Media contact

Mike Alva

Mike Alva

Director, Corporate Communications, KPMG US

+1 925 878-5488

 

 

Shawn Quill

Shawn Quill

National Sports Industry Leader, KPMG US

+1 201-505-3565

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