As cases of the coronavirus spread around the world, sports organizations both in the U.S. and abroad are taking precautions by canceling major events. And with the Tokyo Olympics approaching, fans are speculating about the fate of this year’s games.
The International Olympic Committee has been steadfast in stating the Olympics, scheduled to begin July 24, will go on as scheduled. But earlier today, the event was further called into question as the Greek leg of the Olympic flame lighting ceremony was canceled.
Given the actions of leagues and comments relating to postponement reportedly made by committee members, public pressure is building for the games to either be canceled or postponed. If the Olympics are nixed, Sports & Fitness Industry Association president and CEO Tom Cove believes brands invested in sports and athletes associated with the global event will take a major hit.
“If companies are involved in the Olympics, they spend time marketing and creating product, launching product,” Cove told FN. “There are campaigns that are created two or three years in advance to launch a product in a certain way, so it would be a major deal if they were to cancel the games beyond just what [brands] would get in immediate advertising or exposure.”
Saucony president Anne Cavassa believes a profound impact would be felt by the entire sports industry, not just the brands heavily invested in the Olympics.
“The Olympics create consumer excitement and momentum in performance that only comes along every four years in our industry,” said Cavassa, whose brand sponsors Olympian Jared Ward. “The impact is yet to be quantified, but coupled with the coronavirus, social distancing and self-quarantine, the potential impact would be significant.”
However, The NPD Group Inc. senior sports industry adviser Matt Powell doesn’t believe a cancellation will make or break the industry. He stated via Twitter this week that cancellation or postponement “would not have a material impact on sports brands or retailers.”
Even if the Olympics went off without a hitch, the industry insider doesn’t believe the games would move the needle in the global marketplace. In his Feb. 6 blog post, Powell said brands use the Olympics to showcase products and innovations prior to the games, but because athleisure goods are in much higher demand than performance, the efforts will not have a major impact on sales.
Despite Cavassa’s concerns of a wounded athletic marketplace, the exec said she doesn’t believe Saucony would experience severe financial suffering if the Olympics do not go on as scheduled. “[The financial impact] is difficult to quantify but our financial risk would be minimal if the Tokyo Olympics were cancelled,” she told FN.
Marc Beckman, founding partner and CEO of advertising and representation agency DMA United, told FN that he expects some brands with ties to the Olympics to lose millions of dollars, but given how far out the games are, most companies won’t. The exec said he expects brands with a stake in the Olympics to maneuver similarly to his clients in the music festival world, which has also had major cancellations amid the coronavirus pandemic.
“In some cases, the money hasn’t left yet so they can redeploy funds,” Beckman said. “The No. 1 area where I’m seeing companies redeploy funds is toward original content through social media, really all digital, and leveraging partnerships and collaborations to reach the audience that they thought they would reach — in this case, the Olympics.”
Where Cove is most concerned is the state of the industry beyond the games this summer.
“The bigger question, I would argue, is where is the rest of the economy in general?” he said. “It’s very important where the economy, where the market, where consumer confidence is going to be over the next three to 12 months.”
Beckman, however, did say that the cancellation of the Olympics would decimate a compelling storytelling opportunity for brands.
“At times that are really difficult for the world, usually the Olympics uses sport as a galvanizing opportunity,” Beckman said. “But in this instance they won’t be able to, so unfortunately there’s a lot of loss there.”
This week alone, the world of sports has taken swift action to ensure the safety of fans, athletes and all others associated with games being played.
For example, with the entire country under strict quarantine measures, the Italian National Olympic Committee suspended all team sports competitions until April 3. In Japan, the start of the Nippon Professional Baseball regular season was suspended. And in the U.S., high-profile events such as March Madness, the BNP Paribas Open and the Boston Marathon were all canceled or postponed.
Also, sports leagues including Major League Baseball, Major League Soccer, the National Basketball Association and the National Hockey League have all announced they have either suspended or postponed their seasons.
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