4 minute read · Issue number 6 · March 6th, 2020
Happy Friday! Welcome to the 6th edition of the Sports-Tech Biz Magazine!
The recent outbreak of the Coronavirus has begun to take its toll in the sports industry either by postponing events, closing games to the public, decreasing attendance or by canceling events.
This year, two of the most anticipated sports events of the year are right around the corner, and the public now wonders what precautions will be taken, or if the Olympics and the Euro will eventually be canceled.
In today’s edition, we will talk about the impact that the virus could have on those sports events from a business and technological perspective.
“If the sports industry was a stock, everyone would be selling it right now”.
The Coronavirus drew the attention of sports fanatics at the beginning of February when the Formula 1 announced it will postpone the Chinese Formula 1 Grand Prix.
Different sports and leagues including tennis, golf, rugby, basketball, and esports followed similar measurements for their respective events.
The biggest one yet was the Serie A soccer league in Italy, which has been suspending matches or performing with closed doors to avoid additional viral transmission.
As the number of infected people keeps rising at an alarming rate, the public and the media are beginning to ask what will happen with the Olympics and the Euro that are set to happen this summer. Will they be canceled? postponed? only available on TV?
In History… only three Olympics were canceled, all because of world wars (1916, 1940, 1944). Is the virus outbreak a “world war” caliber cause to cancel it?
The Euro and the Olympics have much at stake due to the size of the demand, hence they involve governments, private and public companies, independent investors, and individual contractors.
From a technological, economic, and financial perspective, what consequences are we facing from changes in the itinerary of these events?
Tech Perspective 🤖
As we saw in a previous edition of the Sports-Tech Biz Magazine, companies love to introduce technology in important sports events. For example, the Super Bowl in 2020 hosted 5G technology, and network companies learned a lot from that trial.
The Euro and the Olympics aim to serve a similar purpose. UEFA unveiled that they want to try a blockchain-based system that will amplify the fans’ experience through safe, secure, and smooth blockchain-enabled mobile ticketing.
For the Olympics, diverse companies such as Intel and Cisco have been preparing to try new 5G and AI technology, mobility solutions, viewership experiences, smart city applications, and broadcasting services.
All for nothing?… Big events are a great time to pilot new innovative technologies. Companies spend lots of work, time and money in research, development, and preparation of these technologies. If an event has to be canceled or postponed, the products won’t be able to perform. Think about it as studying for an exam, and not taking it. Disappointing, isn’t it?
“Tech break”… Pilots and beta products are made to test the waters before rolling out the official release. Without the feedback from these pilots, products suffer from a slowdown in improvements and adjustments, therefore, we could expect them to take long until we see the official release.
Show me the money… Tech companies could expect a loss in their balance sheets and a decline in their value, as they will have a hard time hitting targets that considered the revenues from the events.
Business Perspective 💸
Think for a second about the following facts:
Over 28 million people demand a ticket for the Euro. Not everyone will get a ticket, but demand can adjust prices.
In Japan, an estimate of over 15 trillion Yen (145 billion USD) is expected to be spent in infrastructure, residential projects, transportation, urban renewals, and improvements to the facilities before the Olympics.
Opportunity cost… “The loss of potential gain from other alternatives when one alternative is chosen”. Think about everything lost; the TV and sponsorships deals, the employment generated from these events, the tourism attracted. Tons of money is moved between countries. Macro sports events generate benefits for the economy even 10 years after they happened. The indirect economic and financial consequences could be way more hurtful than what we expect.
What to expect?
With every investment, there is always a risk of default. The two major sports events of the year are facing an additional risk due to the unprecedented outbreak of the Coronavirus. There have been a few outbreaks in the past that created uncertainty, such as Zika, EBOLA, AH1N1, and others. All of those were contained in time, disappeared quickly and nothing had to be canceled. This can also be the case with the Covid-19. The pandemic would have to become critical, to the point that the global community requires the cancellation of the events. In the meantime, companies in the sports and technology industry will be cheering every day for the quick eradication of the Coronavirus.
Can you guess the answers to the following questions? (answers at the bottom)
The Opening ceremony of the Euro will be hosted in Stadio Olimpico, home of 2 teams. Can you name them?
The final game of the Euro will be played at __________ stadium?
This is the second time Tokyo hosts the Summer Olympics, the first time was in______?
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Enjoy the weekend, and see you next week!
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Answers of the trivia:
Roma and Lazio