Sport bouncing back after Covid financial blowsby
Disruption to business plans caused by Covid-19 forced sport finance chiefs to switch to new strategies and adopt leaner operations to mitigate the risks.
That was the message emerging from a sport finance panel at the inaugural AccountingWEB Live Expo.
Wasps Rugby Club finance director Tom Bonser and his counterpart at England Hockey, Kuldeep Kaur, opened up to delegates about the impacts of the pandemic on their respective businesses and how they’ve navigated the challenges.
Bonser and Kaur spelled out the financial blows triggered by the outbreak of Covid-19, as their finance departments were slashed to skeleton staff.
They agreed that the pandemic gave them the opportunity to re-evaluate strategy, business plans and budgets to ensure Wasps and England Hockey could overcome the challenges to ensure financial stability.
The hit on finance teams
An increase in collaboration between finance teams and other departments during the crisis has aided their recoveries – a positive Covid legacy that is set to stay, they believe.
“It gave us the chance to stand back and say ‘Are we doing things in the right way?,” said Bonser, who highlights the complexities of the Wasps business, with banqueting, conference and events at the Coventry Building Society Arena part of the mix alongside the rugby and netball clubs.
from a finance perspective we have gone to great lengths to share Covid impacts
Of 14 people in the finance team, six were made redundant and, although his team is back up to 10, “we have a new approach to become more efficient as a department”, Bonser said.
“There was massive reliance on finance [during the pandemic] that didn’t exist before and I think it is here to stay,” he added. “We are still not out of the woods but people understand that from a finance perspective we have gone to great lengths to share Covid impacts.
“I think that collaboration will stay with us for a long time.”
Across the rugby club and the whole business, Bonser said that wage deferrals and reductions were among measures taken to alleviate financial concerns. “It came down to communication… over communicating as opposed to under communicating.”
At England Hockey, Kaur said scenario planning was vital to tackling the challenges of Covid-19.
“We needed to keep things running without a huge amount of disruption. Our prime goal was cash control. We kept as much as we could stable in the background amid growing uncertainties,” she said, adding that “some system changes” would likely be made over the next 18 months to strengthen business operations.
Scenario planning became every leader’s responsibility
“Scenario planning became every leader’s responsibility. At the RFU and England Hockey, we built variations from those anchor points. Everyone wanted to help in pandemic teamwork and collaboration and I felt very proud to be part of the sport at that time.”
Asked by panel moderator Georgie Frost if collaboration had remained or waned as Covid restrictions loosened, Kaur added: “It will be part of our new strategy and we will strengthen it more internally and externally.
“If we want to survive and come back in a bigger way, and the nation needs to be active, then we have to collaborate.”
Sponsorship issues and new revenue
The shutdown of sport in 2020 decimated revenue streams. Thanks to their creative commercial teams, backed by the finance directors, Wasps and England Hockey managed to resolve sponsorship issues with their partners – and even strike new deals.
In April, Wasps extended their partnership with Vodafone for another three years. A month later, Wasps secured a new 10-year stadium naming rights deal, as the venue welcomed back Coventry City as a tenant in the summer.
“We were not just surviving but thriving,” said Bonser, who cites cost controls as crucial but stressed the importance of examining fresh ideas to add value to the Wasps business. “The commercial team was fantastic. The naming rights helped in Coventry City coming back, it had a domino effect… it’s game-changing for us and the city of Coventry.”
With Covid restrictions on stadium crowds, Wasps and England Hockey’s financial gurus said nurturing relationships with sponsors was important as they set about delivering on rights deals. Activations promoted through social media channels to engage fans and gain traction was partly how they pivoted.
Kaur said England Hockey “dissected contracts” with sponsors, many of them long-standing, to find out what rights could be delivered. “At the start of the pandemic, there was a lot of goodwill shown by sponsors to sport.”
We were not just surviving but thriving
Brands associating with social causes, or driving diversity and inclusion agendas, is an increasing trend in sport. Vitality partnered with England Hockey at the start of the year ahead of the postponed Tokyo Olympics.
Kaur said: “It’s not about individuals but systems and structures and athletes have a very loud voice. If we can strengthen that it would be wonderful. Vitality has really wanted to connect with women’s sport and is harnessing the equality agenda.”
New ideas in revenue generation
With attendances yet to return to pre-pandemic levels, the rugby club and national governing body for hockey are actively considering new ideas in revenue generation and to grow the appeal of their sports to a younger demographic.
Bonser said Wasps are talking with potential sponsors to put in an esports hub in a bid to enrich the matchday experience for fans.
With 60% funding from government ring-fenced for elite athletes and pathways, Kaur said England Hockey will be looking to create stronger relationships with government and ramp up commercial revenues to better serve the grassroots game.
“We definitely think we can diversify revenue streams a bit more,” she said.
When asked if lessons have been learned across sport to make it more sustainable, Kaur said that Covid-19 had taught sports bodies “to find efficiencies very rapidly”.
“I do think it’s made everyone focus in on where the opportunities are. The momentum was there pre-pandemic but it has given an extra boost.”
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Mark Bisson is a sports business reporter and editor with over 20 years experience. He currently writes about Premier League and Championship clubs for football finance website, Off The Pitch.
An Olympic correspondent for more than 13 years, he has written for many UK and international sports business publications.
Mark is a former...