Leagues will have to prepare for changing habits when sports finally return

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KEY POINTS
  • Marketing executives and investors say sports leagues around the country should use the coronavirus work stoppage to form new ideas about surrounding sports consumption and experiences.
  • “If anyone is looking to do things differently, break some rules or traditions that they felt were antiquated in today’s time, this your chance,” said Tony Ponturo, CEO of Ponturo Management Group, a sports marketing consulting firm.
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GP: Empty seats Fenway Park 200402
Empty seats are shown as the sun rises over Fenway Park on what would have been the home opening day for the Boston Red Sox against the Chicago White Sox at Fenway Park on April 2, 2020 at Fenway Park in Boston, Massachusetts. The game was postponed due to the coronavirus pandemic.
Billie Weiss | Boston Red Sox | Getty Images

Innovation.

It’s one of the most used words circling the sports world during the work stoppage across major sports leagues expected to last at least another month.

Sports teams are already feeling the economic impact from the shutdown now that games and TV revenue have all but dried up. But at the same time, experts and investors agree leagues and franchises should use the stoppage to contemplate new ideas to bring sports to the masses once we’re on the other side of the crisis.

“If anyone is looking to do things differently, break some rules or traditions that they felt were antiquated in today’s time, this your chance,” said Tony Ponturo, who served as vice-president of Anheuser-Busch global media sports and entertainment marketing for 17 years.

For leagues to return, it will depend mainly on the coronavirus’ curve. Currently, too much uncertainly is making it difficult to forecast when to resume, and a lost season seems more and more likely for the National Basketball Association and National Hockey League, which had to suspend play mid-season.

Meanwhile, Major League Baseball settled its affairs with players in case its season can be rescued.

But though league commissioners have made it clear health is the top priority, there will be another side – business and economics. Leagues will need to get creative in a recession, and address what could be new consumer habits that could affect revenues across sports, as fans elect to stay home due to virus fears.

“Is this the time when you’re living room experience becomes a revenue source?” asked Joe Favorito, a longtime public relations and marketing executive.

Investing in technology

For the living room to be monetized, leagues will need to increase investment in industries like esports, something the NBA does well.

Monumental Sports & Entertainment, the owner of the NBA’s Washington Wizards, led a charge to increase the NHL’s presence in esports, an industry that grew to $1.1 billion in 2019, according to the Wall Street Journal.

“The opportunity in this crisis is that video games will become this accepted form where for so many years it was rejected,” said John Fazio, the CEO of esports company Nerd Street Gamers. “It’s really about reaching a demographic that might not be playing [sports] but who can also be a fan.”

NASCAR also sees success in the esports field. It recently attracted nearly 1 million viewers to its eNASCAR Pro Invitational iRacing Series on Fox Sports’ FS1.

George Pyne is the former COO of NASCAR and the current CEO of Bruin Sports Capital, a sports investment firm. Pyne advocated for more leagues to explore the esports industry, adding the moment is wide open for innovation.

“As content consumption changes, are you going to adjust your product,” Pyne said. “This is an opportunity for everybody to innovate and get better. Sports are no different.”

Leagues should also invest in more virtual reality experiences, according to Fred Schonenberg CEO VentureFuel, a New York marketing firm. Schonenberg said the XFL should be the first to explore new tech featuring volumetric video, suggesting leagues look into tech companies like TetaVi.

“This is the opportunity where they can move faster than a [National Football League] or an NBA,” Schonenberg said.

NFL’s Nickelodeon experience

Speaking of the NFL, the only league still operating, it wasted no time officially announcing that owners approved a reformatted playoff structure that will add two new games.

According to Sports Business Journal, the deal grants the league an extra $70 million-plus per season, with NBC Sports and ViacomCBS airing the additional contests, which will include a simulcast-on Nickelodeon.

Schonenberg noted the NFL is too conservative to incorporate too many broadcast changes, but it’s here the NFL can display can get creative and may have to. How will the NFL transform a violent sport, filled with horrific injuries, enough to appeal to a Nickelodeon audience?

An NFL spokesperson said CBS would decide on the Nickelodeon telecast. SBJ also reported “talent and specific formats” would be revealed at a later date.

“The youth demographic is very important — there are plenty of young fans, and we want to continue to bring the game to the young fans,” Brian Rolapp, the NFL executive vice president of media told reporters. “What we expect it to be like, we’re not sure yet. There’s a lot of planning and work that will go into that, and CBS Viacom will be hard at work at that.”

Though details are still forming, Favorito feels the league needs better execute its partnership with Nickelodeon through CBS. The NFL has a previous relationship with the network, which included airing an animated series entitled NFL Rush Zone.

“If Nickelodeon is just an overflow channel like TruTV is for March Madness, then it’s a lost opportunity,” said Favorito, now a professor at Columbia University. “What the real opportunity would be is if you’re taking a Nickelodeon specific audience and reinventing what that broadcast looks like, that’s innovation, and that’s what’s needed.”

With its TV media rights up for renewal, the NFL should work with partners to explore different broadcasts, including adding extra content for all networks to monetize, helping the league target a younger audience.

If so, perhaps its media rights valuation, which already exceeds $6 billion annually, will be increased even more.

Taking responsibility

Perhaps the most significant investment any league or sports owner can make doesn’t involve technology or schedule changes, but corporate and social responsibility.

It’s something Philadelphia 76ers owner Josh Harris admitted he “got wrong.” Before his apology, Harris, who Forbes estimated is worth $4 billion, attempted to cut employees’ pay during a time stay-at-home orders are affecting the country and causing businesses to shutter and unemployment to rise.

“Teams have to start doing things that show they understand what their fan is going through,” said Ponturo, who now serves as CEO of Ponturo Management Group, a sports marketing consulting firm.

Ponturo said franchises need to offer more “givebacks to society, communities, and their fans” not only during this crisis but especially after coronavirus subsides.

Assisting local small businesses is also a responsibility, and it doesn’t have to be monetary, according to Harrie Bakst, co-founder of Weinstein Carnegie Philanthropic Group. An example of this is Dallas Mavericks owner Mark Cuban, who started a reimbursement program with him employees to support local business.

Bakst said Cuban’s actions would not only increase his popularity as a sports owner “within the Mavericks, not only with the Dallas-Fort Worth community, but I also think nationally, too.”

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