Sports Industry Short-Term Future Gloomy, Long-Term Growth Imminent

Sports industry worldwide may lose up to $61.6 billion of revenues in 2020 due to the ongoing health crisis, a recent article from Two Circles projects.

Two Circles’ Sports Attention Index

The sports data analysis provider company estimates that, out of 49,803 major sports events scheduled for 2020, the coronavirus outbreak containment measures of social distancing has erased almost half of it. As of today, Two Circle, based on a model that updates on a daily basis according to the rate of infections and the changes in sports calendars, estimates that only 26,424 events will be held until the end of the year, a 53% of the original schedule.

5-Year Growth-Tracking Model

By tracking the value of the sports industry over a period of 5 years from 2014 on, the data analysis company has reached a compound annual growth rate for the sports economy of 4.1%. Starting from the 2019 $128 billion generated, Two Circle has initially estimated the world of sports to grow in 2020 by 4.9% year-on-year and reach $135.3 billion.

Due to the currently halted major sports events amid the spreading menace of the virus, the 2020 projection has been significantly lowered to $73.7 billion only, implying the sports industry will lose more than $60 billion in revenues.

Return When It’s Safe

The data company further argues that even though sports properties are keen to return to action as soon as possible due to financial concerns, they will be allowed to do so only when it is deemed safe by the relevant institutions and medical authorities, as well as that the first step would most likely be hosting games without crowds which by itself will pose challenges to them they have not faced before.

Most of the leagues that have suspended seasons and have a chance to complete will put all effort required to reschedule fixtures and events, which will cause further disruption of the sports calendar. As a result of this, Two Circle predicts a significant spike in the number of events for September.

Two Circle’s Insight Into the Future

Furthermore, the company’s sports data analysts consider this pile up of events to be the main determinant force for the new world of sports that will shape post the virus. Having to choose between different events that are hosted at the same time will force spectators to prefer one at the expense of the others, and will result into event sponsors doing the same by following the interest stream. Two Circle sees a lot of small sports right owners to go out of business while the bigger ones to get even bigger and financially stronger, a consolidation in the industry.

Nevertheless, the data analysis concludes in an optimistic tone that once live sports safely returns to the calendar, the sports industry will experience sustained growth.

“Compared to most other industries, in recent times of economic adversity sports has proven to be recession-resilient. Whilst live sports is halted, every corner of the sports industry will continue to feel this significant financial pain, but we are certain that it returns, whether that’s behind-closed-doors or with full houses, sports’ economy will thrive once again.”

Gareth Balch, CEO, Two Circles