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Coronavirus: We should think beyond bailouts in sports recovery plan

Last updated 1 month ago | By Paul Ochieng

The coronavirus pandemic has hit the sporting world hardest

 

With leagues suspended or cancelled altogether, players are facing salary deferments or cuts while sponsors are delaying their monthly remittances. This has made the sports industry to count its daily losses in billions just like other major industries.

With the foregoing, one would expect that sports as a major industry, would be included in most countries’ bailout packages.

Unfortunately, the sports industry has been skipped in most countries. In  USA, the sports industry is not amongst the industries to be bailed out in the approved record US$ 2.3 trillion bailout budget.

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However, in other rich countries such as England, New Zealand and Australia where national governing bodies are well off, they have sealed rescue package deals for financially struggling clubs.

In contrast, poor countries where the national governing bodies rely on government handouts, the situation is grim with almost all clubs facing bankruptcy and the players condemned to an early forced retirement with no benefits.

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Considering that the effects of the pandemic on sports might last longer, a “Marshall Plan approach,” to backstop cash-strapped member federations is needed.

Currently, global sports federations like Fifa, World Athletics, World Rugby and International Olympic Committee are bailing out athletes through the national federations. 

How could an industry that has over the last decade enjoyed an uninterrupted growth come to a screeching halt in three months? This is because it heavily relies on spectators both in stadiums and also on screens outside the stadiums, while the virus too thrives among crowds.

With stadiums and arenas now closed; cable television companies negotiating for refund over untelevised events, parking lots empty and limited merchandise sale, the industry is running on empty purse.

Secondly, a live event, which is the most expensive product in sports depreciates to almost zero once the duel is over and the winner determined.

Therefore, as long as sports isn’t producing live events, its production line stalls. This has informed the government’s efforts to provide athletes with food rations and stipends.

As much as this is laudable, the Marshall Plan we are suggesting should go beyond sports personalities daily subsistence.

Going forward we should put in place cushioning and alternative income streams for our sports persons that will prevent them from begging any time there is a disruption.

Having worked hard to keep its sportsmen and women afloat during the pandemic, the sports industry now needs to work on a plan to revive itself.

In Kenya, the renewed effort to push for the completion of stalled stadiums and cash bailout for sports personalities is a commendable effort by the Ministry of Sports and a move in the right direction.

However, the newly set-up Advisory Committee on Resumption of Sports should pursue an all-encompassing stimulus and recovery plan so that the whole industry resurrects in one piece.

The pandemic also provides an opportunity for the sports industry to rethink many of its revenue stream models considering that epidemics might be a norm going forward; if the H1N1 of 2010, Zika epidemic of 2016 and Covid-19 are anything to go by.

How about shorter but frequent leagues? How about smaller stadiums with more VIP booths and the masses watching from home? How about shared stadiums? Ideas abound.

Athletes too will need to watch their lavish spending habits to avoid another bailout in future.  

 Paul Ochieng’ is a Sports Economist while Gerald Lwande is a Biomedical Scientist

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