By Craig Hughes

On November 19th, in a statement released by the Department of Digital, Culture, Media, and Sport, the UK government announced that £300million in funding would be made available to the sports industry. This emergency funding has been provided to eleven of the sports competed professionally in the UK, that have been most affected by lockdown restrictions imposed due to the coronavirus pandemic.

The restrictions imposed on sports has meant that for the majority of 2020, spectators have not been able to attend sporting events, leading to a significant drop in revenues and an incredibly difficult financial situation for sports across the board. The sports that are eligible for funding from the government’s funding are:

 

  • Rugby union
  • Horseracing
  • Football (excluding the Premier League and Football Leagues)
  • Rugby League
  • Motorsport
  • Tennis
  • Netball
  • Basketball
  • Ice Hockey
  • Badminton
  • Greyhound Racing

 

One noticeable absentee from that list is cricket, a sport that has certainly suffered from the pandemic, with the home tests against Pakistan in the summer played behind closed doors. The reason why cricket has not been considered is because the focus of the bailout is to support sports that would normally draw in spectators in the winter, meaning cricket does not qualify.

The bailout package will be mostly available in the form of loans, a statement by the Department of Digital, Culture, Media, and Sport has announced. The statement summarised: ‘Preliminary allocations have been made on a needs-assessment process and reflect the submissions made from the individual sports, and the funding process will be overseen by an independent decision-making board and supported by Sport England.’ [1]

With the emergency funding described as ‘much-needed support’ by RFU CEO Bill Sweeney, we look at what the government’s emergency funding means for those in line to receive it.

It isn’t easy to understate just how reliant certain sports are on corporate sponsorships for their survival. In 2019, globally, business spending on sports sponsorship was in excess of £35billion.[2] According to a report published by The Times earlier this year, it was estimated that coronavirus would cost sports associations and teams approximately £15billion in lost sponsorship in 2020, with many big betting companies like Bet365, Betway and FindBettingSites reducing their marketing budgets. This is a 37% decrease in one year, which is potentially catastrophic for many of the most affected teams and individuals.[3]

Although a comparative drop in the ocean, the £300million bailout package announced by the government will at least provide certain sports with a much-needed injection in cash, which many clubs and individuals will utilise to prop up sponsorships that were lost due to the coronavirus pandemic.

It’s not just sponsorship, though, that has dropped significantly in 2020. Perhaps the most noticeable image of the pandemic in the world of sports thus far has been the empty stadia. Ordinarily, millions of people attend sporting events every week throughout the UK, but since March, venues and stadia have been forced to close, meaning sports have been played out in front of empty stands.

This has impacted every professional sport in some way, as so many clubs are dependent on ticket fees to pay some of their core costs such as rent, staff salaries, and other operational costs. Many sports teams seem to have been placed in catch 22; they’re expected to continue operating, but they cannot generate anywhere near enough income to pay the bills that allow them to operate. It’s a challenging situation.

The absence of fans has not just resulted in a loss of income from ticket sales. There are all of the other potential revenue streams that clubs and sports teams usually draw upon, including merchandise sales, hospitality packages, and food and beverage sales, to name but a few. If sports are to survive, it’s imperative to get fans back into venues as quickly as possible. Before the most recent lockdown was announced in England, more than 100 sporting bodies wrote a joint letter to the Prime Minister warning that the sector’s future is perilous, and it will get even worse if fans aren’t able to come back sooner rather than later.

So, will the £300million from the government be enough to see clubs through the winter until fans can return at the start of 2021? Some would argue not. If the £300million package is compared to the £1.6billion received by the Arts Council, it seems like a relatively paltry sum.[4]

If we take rugby union as an example, the sport due to receive the most funds with £135million arriving from the government, there is still likely to be a shortfall. £59million has been promised to the twelve premiership clubs, but Bristol owner Stephen Lansdown doesn’t think it’s enough. He suspects that premier league club’ losses are all reaching up towards the £10million mark because we can’t get people in through the gates.’ If his estimate is right, then the premier league clubs aren’t even getting half the money they need to recover their losses.[5]

It’s clear that the sports industry will welcome the £300million government bailout, but it seems to fall way short of the money needed to recoup the losses suffered due to the coronavirus pandemic. The government must support clubs to welcome supporters back to their venues as soon as possible to ensure that the financial situation in sport doesn’t worsen, providing it’s safe to do so.

[1] https://www.bbc.co.uk/sport/54998979

[2] https://www.bbc.co.uk/news/business-48103067

[3] https://www.thetimes.co.uk/article/coronavirus-will-cost-sport-15-billion-in-lost-sponsorship-this-year-report-2gx83cttt

[4] https://www.standard.co.uk/sport/ps300m-coronavirus-rescue-package-for-sport-is-not-enough-government-warned-b73988.html

[5] https://www.standard.co.uk/sport/ps300m-coronavirus-rescue-package-for-sport-is-not-enough-government-warned-b73988.html

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