Discussing the Impact of Covid-19 on the Sport Industry

On Friday, April 3rd, 2020 the President of Cosmos Sports and Entertainment, Cary Kaplan and Gavin Roth of Gavin Roth + Associates Revenue Consultants Inc. sat down to discuss the impact of the 2019 Novel Coronavirus Pandemic or as it is better known today, Covid-19.

Featuring a panel of experts, Gavin and Cary walk listeners through the effects Covid-19 is having on the sponsorship and sports/entertainment marketing space as a whole.

Below is a transcribed version of the interview and discussion highlighting some of Cary’s key points on the pandemic. To listen and watch the full episode please visit: https://rothrevenue.com/podcasts

Gavin: 

So from an impact standpoint, why don’t I just start with, How are you all doing? Like this is a crazy new reality we’re facing.

Cary, what are your thoughts? I’ve known you for a long time. You’re an optimistic guy. 

Cary: 

I think it’s hard not to agree with what Sarah’s saying. I think probably World War II,  which I believe predates all of us, was probably the last time that the world wasn’t prepared. This is bigger from a world perspective. 9/11 impacted the States and us and yes, and plane travel for a while, but right now every single country in the world is in essence, on lockdown. I think it’s just health first. I think it’s almost not right to even, as you stated Gavin at the beginning, it doesn’t feel right to even have these conversations without saying, let’s be healthy. It hit a million people last night! I’m in sports and entertainment so that industry closed, like it’s officially closed in the entire world. I said to Gavin, there is inter-squad baseball in South Korea, and that is the closest claim to optimism in the world of sports entertainment. So yeah, of course, it’s affecting everybody.

Gavin:
Cary, how are things different, like in the way you’re conducting business today? What are the dynamics you’re facing that you didn’t face then?

Cary: 

I mean everything’s turned upside down, it’s totally different. I mean, the simple thing is the way we’re communicating is all virtual. I was not a star at video chat, but now I’m doing eight of them a day. I still have to do some work on my part, but that’s the practical side of it. 

I don’t even know if this is exactly answering your question, every industry in every organization is affected differently. I think what we’re trying to do as a company and then with our clients is to avoid panic. Some of you know, there’s some people that have to panic, you know that they don’t see an out and maybe they’re in a certain amount of debt, but I found certain sports organizations, for instance, have handled it very differently. Some groups have closed or laid everybody off or laid massive amounts of people off and others have tried to I think, Ian and Sarah you guys both mentioned this. Obviously, the hope and the feeling is it’s a moment of time. We don’t know how long the moment is, if it’s two months or four months, but that something is sort of thinking okay, what’s your 2021? 

I think that the that the end we’re trying to keep people as best as we can from panicking, and as a business saying if you can be strong and weather the storm, which is an apt expression, I think it’s a funny/awkward word to use but there’s opportunity for those people who can effectively weather the storm. In our industry we’re seeing that it’s a big range. There are a lot of companies, entertainment, events that are on full shutdown, or  lockdown panic. I think if you can avoid it, our recommendation is if you don’t have to go that route. There’s a lot of good people in a lot of organizations. 

Just the last part, I think most people want to work as opposed to if you got the exact same money to be laid off versus working. I think most people want to work and I think we’re trying to find ways to encourage groups, again, not to panic.

Gavin:
Yeah. And Cary you and I’ve talked a lot about this, that we feel there will be, and I think it’s consistent with the comments we’ve heard, is there will be this desire, this pent up demand to reawaken/rebirth. It will bump up against some of the anxiety about returning to mass gatherings. But, it does spell opportunity, doesn’t it? 

Cary: 

Yeah, I think it’s a bit of an optimistic call, which is nice. I think because Gavin sometimes pushes me that I can be overly optimistic in these situations. But I will be.

Pessimists always say they are realists by the way. People do that all the time. “I’m not [a pessimist], I’m a realist”. Every time somebody says they’re a realist, they’re consistently pessimists. I think one of the things that you have time to do during this time is a lot more research, I’m doing a lot of googling and looking at the search engines. So I found something, to me, that’s really optimistic. I’m going to flip the tables on you here, does anybody here know who the highest paid athlete is? Factoring inflation, who the highest paid athlete of all time is?

Ian: 

Babe Ruth?

Cary: 

That’s a good guess. you are in the ballpark, but you need to go further back.

Sarah:

Oh wow.

Cary:

I only found this a few days ago. I’m actually not even gonna say the name because I can’t pronounce it properly, but it’s a chariot racer.

Gavin:
Ben Hur? 

Cary: 

In that era, yes. Also the other thing, the largest crowds in history were not Michigan State. They were chariot races. There were 250,000 people watching live.

A week ago I didn’t know that but the reality is that live sports are not going anywhere. Like I would argue that this is still a small blip in time, you know, even if someone works 40 years, three months is about half of 1% of their work career. Let alone over a 100 year period. Every time there’s a lockout in hockey people all said they won’t come back but it didn’t take them very long. There’s always thousands of people saying ‘I’ll never watch again’. 

And even with 9/11. I think there is a percentage of people that will be nervous. I don’t have numbers or any data on this, but I would argue there is an equal number that may want to come back so badly that they may go to four concerts. Ian had suggested, you’re going to lose those three months. You’re right. But I think there’ll be some people that go to four concerts in October, that may have gone to one in April, June, August, and October. That’s on the front of the curve, but that’s the hope, and again, that’s the optimist in me. I do think that as Sarah said, there’s nothing like large gatherings, there’s always a talk of, you can have a giant screen TV or replicate it in a bar or restaurant and there’s no resemblance. It’s not the same. It’s just not, there’s no similarity. So I think it’s human nature. My feeling is that it’s all coming back. It’s just a matter of time. 

Gavin:
A couple things. What surprised me a little bit is that I expected at this point the network’s to have come up with more innovative ways of staying engaging for giving consumers content because we’re still seeing and Listening, I’ve worked for Rogers Media I’ve worked in the Bell Media family. So this is just an observation that right now we’re still seeing replay after replay after replay and plays of the decade. I’ve joked that I’m only slightly less nervous watching the Raptors championship run the second time. My daughter and I were watching Game seven against Philly and she still grabbed my arm as Kawhi was rounding the bend. It was hilarious. But I expected some innovation from that group in terms of maybe doing virtual panel discussions and things of that nature. I hope they’re hunkering down, and planning that. The other thing I’m wondering about is what are the discussions happening in MLB’s office about what kind of protection as a property, what is our role as a property to offer fans a safe environment because when we returned from 9/11 there were greatly enhanced security protocols. I envisioned greatly enhanced sanitation and concourses filled with stations to sanitize your hands and maybe offering masks. I don’t know if they’ll be supplied. Does the virtual table here have any thoughts on those comments?

Ian:
None of us have done our jobs before in a pandemic, so we should give ourselves a little bit of room there. But I think in crisis comes innovation and I think as we get into week three, week four, we’ll see the really special things come out of brands and come out of properties that are really going to resonate. In terms of our experiential practice we’ve already set in our protocols for how we will come back in terms of how we engage with consumers. We don’t plan to give away premiums for maybe up to 12 months. We’re thinking about how we use technology and touch points and that sort of thing. Where sort of content used to be king now it’s content first, how to be more digital. If we’re giving away a premium, can it be a digital premium? Can it be a gift card? Can it be something like that? But I think the key distinction is that people’s psychological safety will be more important for long after their physical safety is addressed.

Cary:

This one is a relatively recent precedent to me, which is security after 9/11 and I think that was an example at sporting events. My wife and I went to New York City to go to Times Square in 2000.

Sarah: 

Well you’re crazy.

Cary: 

Well, yes, but see that’s as you say that right now. 

Sarah: 

I would have said it then too.

Cary:
Maybe, that’s the funny thing about it, we would never have gone and we realized on about September 12 2001 how crazy that was. The one we went to was still the largest group that’s ever been there because two years later that changed; 3 million people in Times Square and limited security. Never again, right? 

We can’t conceive the craziness that we went to then and I think September 11 did that with everything, with the way airport security is, the world and I think people in general are in fact probably much more comfortable. If you went to an airport now and there was limited or no security, you’d be really uncomfortable. So to me, it reminds me of that. 

I think the way everything will be treated relative to sanitation and health to me will be that to me is a model of sorts, in North America anyway. I’m not sure if that resonated to the same extent in Europe, but I think we live in a post 9/11 world, you know. I think our millennials can’t relate to that, but for us, I think, as well as you guys. Ian you said that in particular, it’s deciding “what does that look like” and people will expect it. I think people will want to go to a Blue Jays game where there’s 40,000 people but they are sure as heck going to want to make sure that every possible thing is in place so that there’s no risk of contamination. So I think it’s a good model. 

Gavin:
The luxury of time in sponsorship discussions often gets hindered by the pressure of time and scrambling, the events coming up and properties are trying to get a partner engaged. Now we have maybe the luxury of pausing doing what’s right in a time like this and then restarting the conversation at the right time with ample runway. Maybe we will do it differently than we would have, if we would have been rushing to just fit in the 2020 version of whatever that event would have would have meant. 

Cary: 

Yeah, I think it’s just echoing what everybody is saying. Sincerity will win the day. I think the mistake for anybody, if it’s a property or a brand, is if you feel like a “by the way statement”, in other words, “here we’re doing something for healthcare workers or providing credit on phones by the way, would you like to…”. In other words, if it comes too soon, or it’s in the same message it’s not sincere. I think the brands that generally do a great job are Bell Let’s Talk or Kraft Hockeyville, they don’t talk about Kraft Hockeyville and mix it in with your cheese slices. And I think that the bigger scope here is that people will know that Bell sells phones or McDonald’s sells hamburgers or Toyota sells cars or the Toronto Rock sells lacrosse tickets, they’re not going to forget that. So the mistake that I think some brands are doing and some organizations are doing is they’re too tightly mixing the two things. Whereas I think now is the time to listen and focus on one specific thing that to me shows sincerity more than anything. As if you just park your sales objectives entirely. Because it’s going to circle back and this period of time will be relatively short but I think there’s still a fair bit of by the way mentality. People are too smart and sensitive right now if they feel like somebody is doing something, but there’s really a hidden ulterior motivation in any way, they’ll know. That’s the key in my mind.

Gavin:
We’re seeing so much right now as to what brands are doing, whether it’s Bauer releasing the technology so that their face mask technology can be good or so that products can be mass produced. Sarah you gave some great examples of brands, but what can properties be doing right now? How can they be helping at a time like this? Cary, have you seen any of your property clients? I’ll give you one thought: I know some stadiums have been really well. 

Cary:
Yes. I was gonna answer a different way. But I would say the first things like what Bauer is doing is paramount and I think that people will remember that. I think if you’re in a position where there’s something tangible you can do that will make a difference it should be done. So you turn your stadium into a hospital or anything for safety first. 

I would say secondly, if you can’t do that, or you don’t necessarily know how to. I can tell you we had a call; we’re doing some training calls. The Brampton Beast Hockey team is a very small brand in Brampton and we have a staff of 10 and some interns. Our objective is to reach out to everybody in Brampton. Not Brampton Beast fans, not sponsors, and not former sponsors. We’re going to start there, but our concept would be to reach out to people that have zero relationship with the hockey team, just to say, “how are you”? Those conversations won’t have anything to do with the hockey team or who we are. I think organizations that have properties that still have people there and are able to do that, should. What we have found, which I could say is a really positive thing that we’ve learned in the last 10 days, is people love having these conversations. Our guys are having long conversations with people who want to talk. They’re at home in this situation, their world is upside down. There are so many people who want to talk, maybe more than any time I can remember. So I would say it’s a bit of a funny answer here. But I think if you can communicate, listen and have meaningful conversations with people about life and their reality and their world, it seems to be more important than ever. If you’re not able to do that, I think just listening and having meaningful conversations, I think is very powerful. 

Gavin: 

Before we move to the last topic, are there any other brands or properties as well, it could be celebrities, it could be people, but more so try to keep it in the sponsorship marketing realm, which includes brands and properties, who’s standing out to you right now and is doing great things. Sarah, you gave some good examples in your initial answer. Please anybody, just chime in with any thoughts?

Cary:
I would say that there are brands that can do something in the current climate. I don’t know, I noticed Uber Eats and Skip the Dishes, and as Sarah mentioned Bell and Rogers. If you’re doing something that doesn’t relate to COVID the strategy is probably going to be hollow. So Bauer’s or GM are making face masks, I think those examples being relevant and the whole world is dealing with one situation. I would say that Ian made the point too, I think the IT people are trying to figure it out really fast. To Sarah’s point, we played a hockey game on March 10. There were no issues, there wasn’t even any consideration of not playing that game. You think of how quickly this has happened in some ways, we’re not even through a month. I think that adjusting is pretty tough, pretty quickly.

I just want to add one quick thing I think we were talking about a lot, which is obviously the primary thing, being relief to health and the immediate second to this one is financial.

Everybody needs financial relief, tier two, I think Sarah made the point, I didn’t know that Bell and Rogers lifted the billing. I had somebody that was a big issue yesterday, we were talking about how Loblaws was charging a delivery fee for groceries. I don’t know if they are or not, to be honest but I think organizations that are lifting the financial burden is a second, but at the same time it’s unparalleled. If that’s a second way that companies that maybe can’t be Bauer and make masks or can’t help physically, the second way is that they can stop their billing. I think a lot of companies are in positions to do that, where they can suspend payments or make adjustments. By the way, just real quick Sorry guys. I’ve found a mix, we work with a lot of companies and some are very understanding and others are a bit business as usual. Maybe it’s somebody in the credit department but it reflects poorly upon the organization. Like when someone is asking for $1,000 that normally was due and if they’re not prefacing it. Some big companies are really poor at that right now, where there’s still a bit too much business as usual. So I would say that’s important too. 

Gavin:
Cary, if you want to start, with some silver linings that are coming from this; maybe as the unintended consequences of a global pandemic.

Cary: 

I think, again, it certainly seems somewhat awkward to use those words, but I think they’re important. I think we’ve become better, a lot of things are happening that we’re not talking about. People aren’t talking about wars between countries for example, there’s a lot of other things as well, but there’s no other news. There’s very few other conflicts that are relevant anywhere. There’s a real sense like we’re in a movie, which is a part of this whole moment. But I think there is a sort of banding together, I think that’s very empowering and makes you believe in the future. I think we can sort of band together to do that. 

A couple of you said it, it’s a moment in time, which when you’re in the middle of it, it’s the great line and it’s “darkest before dawn”. It’s very hard to see it but nothing in this pandemic suggests that there isn’t an end date. You know, it may scare people when they hear it’s 18 months. But nobody’s saying it’s 18 years, and there’s an end. So there’s an end and we’re gonna get there. So I think if we take this as an opportunity to plan ahead and realize that there will be tremendous pent up energy for live entertainment. Let’s be better and figure it out. 

But I think it is important, what I would  leave with is a lot of people, Gavin, I think you said it, particularly I think people that are younger that haven’t been through anything like this. A lot of people are lost, and I think that if we can bring some of that optimism, I think it’s extremely important. I think a lot of other people don’t start with optimism, they are all doom and gloom, like “I can’t go outside”. I’m sitting at my computer and we have a lot of people working with us that are in their 20’s and it’s a bit surprising to be honest, they’re struggling. I’m generalizing but more so than those in their 40’s and 50’s and 60’s, I find that they don’t know what to do with themselves and I think if we can make sure that the message has a lot of optimism, it is really important.

Gavin:
Great insights and wishing you health. Be grateful for all those little things. Have a great weekend. And we will connect soon, thanks so much. 

Cary:
It was a great conversation, I appreciate meeting Sarah and Ian, it was a really nice conversation. So Gavin, thanks for putting tog

Leave a Reply

Your email address will not be published. Required fields are marked *