Current Root Cause – Corona/ Covid-19

What’s missing in traditional sports businesses during the current crisis? Totally right – (live) sports. No business without the product itself!

Think about Coca Cola, Pepsi or Red Bull trying to make a dollar without being able to produce and ship a single bottle….Hard to imagine.

Risk as Opportunity and Enabler

That’s why (live) sports have to be brought back on the road again! Could this be risky under the current circumstances? Most likely, yes. However, the risks can be assessed, calculated and managed. This is called “Risk Management”.

COSO II defines Risk Management as “a process (…) designed to identify potential events that may affect an entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.”

ISO 31000 simply defines risk management as “coordinated activities to direct and control an organization with regard to risk”.

Traditionally, “risk” has a negative connotation but if you look closely, the term “risk” refers to both, positive and negative “effects of uncertainty on objectives”. When done properly, risk management can therefore help organizations identify opportunities as well.

Identification of Risks & Risk Treatments

Currently, sports organizations should pay special attention to the following risks and identify adequate treatments together with key stakeholders:

Risk: Perception of (live) sports as “special” within society and development of negative attitude towards sports

This is a tricky one from a psychological point of view. On one hand, (live) sports have been a kind of “balm to the soul” since the old Roman Empire. Sports distract from daily problems, provide a source relaxation or just an excuse to get together with family and friends. On the other hand, professional sports, especially football, are seen by critics as too dominant. Any special treatment or exceptions for sports competitions or organizations in times of Covid-19 lock-downs could reinforce this prejudice and threaten sports and their protagonists in the long run.

Potential Risk Treatment: Other stakeholders, such as theaters, musicians and cinemas etc. need to receive permission to perform as well under certain circumstances to create a cultural balance within society.

Risk: Displacement of other sports by a dominating football/soccer industry

The world’s number one sports football/soccer could gain more attention than ever if permitted to continue operations before other sports, especially in Europe, Africa and Asia. Therefore, football organizations would be in a prime position to maintain existing sponsorship relationships and arrange additional deals whilst blocking cash volume for other sports.

Potential Risk Treatment: Sports organizations receiving permission to continue operations and earn money could establish a solidarity fund to support all non-performing sports.

Risk: Insufficient medical testing kits for clubs and teams

Especially, in contact sports, such as football/soccer, American football, rugby, basketball, ice-hockey etc. frequent testing against the virus is essential. Possibly athletes and employees need to be tested several times a week. However, during a massive pandemic, these medical test kits seem to be rare at certain peak times. Professional sports representatives have to consider the responsibility of organized sports, ensuring that sufficient tests can be conducted at all times.

 Potential Risk Treatment: Operations can only be resumed if adequate testing capacity is available to ensure the well-being of players and staff. Organizations and governments should closely monitor the availability and interact with manufacturers to estimate testing capacity.

Risk: Restrictions of training in teams or large groups

In times of social distancing, it is still prohibited to gather in large groups in most countries. However, professional team sports athletes need to train -team dynamics, the essence of most team sports. Physical contact on and off the pitch however can increase risk of catching the virus, threat players’ health and as a consequence the existence of a functioning team. Each athlete’s personal way of life and potential social contacts further impact the successful implementation.

Potential Risk Treatment: Quarantine camps by each club, e.g. in dedicated hotels. As an option, athletes could bring their families to stay with them.

Risk: Restrictions to operate matches in stadiums

Assuming the training process is under full control and risks are managed adequately, matches in the stadium have to be organized minimizing health risks for (potential) spectators, match day staff and players by applying constant physical distancing as well as all required hygiene routines. Acting as role models for their fans, professional athletes would have to control their behavior on the pitch. From experience we can tell that is sounds relatively easy but “exceptions prove the rule”.

Potential Risk Treatment: Definition of minimum number of employees required to run the show. Again, quarantine camps for all staff involved could be a feasible option to contain possible infections.

Risk: Illegal fan meetings during matches

Regardless whether fans will be allowed to enter stadiums on match days, supporters will most likely gather in groups to watch and celebrate their teams. In times of a highly contagious virus, you just have to do the math to feel this won’t have a good ending for all.

Potential Risk Treatment: Continuous education from clubs/leagues/associations involving the star athletes in social awareness campaigns.

The above risks are examples to showcase requirements for sports organizations and operators to help bring back (live) sports during the Corona/Covid-19 crisis and beyond.

Considerations for key stakeholders

Professional Athletes need to realize that they are the center of interest, more than ever. Every word will be counted, every move will be watched. Therefore, they should be educated how to behave on and off the pitch in times of crisis. Athlete behavior can seriously help influence fans and society as a whole in a positive manner.

Professional Clubs should educate their athletes since they are ultimately accountable for them. Furthermore, clubs need to keep track of their fan engagement and shape an authentic vision for the time during and after the crisis. Asking for money (e.g. using creative fundraising campaigns) is acceptable as long as there is a real value for fans.

Professional Leagues need to ensure safe competitions. Therefore, they should develop health and safety concepts and monitor measures taken by their clubs. Also, finding suitable options to amend existing deals with all kinds of right holders will ease the pain for clubs and athletes.

Professional Associations should support the leagues’ competitions, e.g. with their medical experts, in order to have a realistic chance to run national team competitions again. Also, they need to keep grassroots sports engaged in terms of awareness for the current situation and readiness to resume operations as soon as the situation allows it.

Get in touch with us if you would like to learn more about risk management for sports organizations.