Professional sports clubs in Europe and the US have pulled off a near-miraculous feat of completing their seasons, and re-engaging fans remotely. On the back off this clubs, players and fans were all desperate for spectators to return to stadiums in the near future, albeit in a reduced capacity. The decision by the UK government last week to "pause" the return of fans to sports stadiums from early October will add further to the financial losses suffered by sports teams and organisations across the UK and, in some cases, presents something of an existential crisis.
Now more than ever, sports clubs and associations across all sports need to focus on five critical areas for survival:
- Ensuring liquidity - explore all sources of funding, both traditional, as well as specialist funding from sources who specialise in exceptional situations
- Developing a rigorous cash culture - including cash management, delaying capex and other large cash-outs, and optimising working capital
- Scenario planning - in which a range of plans are developed off a base case, and which can be implemented quickly based on the scenario that turns out to be true
- Reducing costs - look at all areas of the club for saving opportunities, which may include changing the service model rather than removing critical services and functions altogether
- Generating revenue - continue exploring alternative sources of revenue from the organisation's intellectual property, and generate revenue beyond game day, sponsorship deals and sales from this seasons new strip