COVID-19: Sports and major events
COVID-19: Sports and major events
The World Health Organization (WHO) on 11 March described the COVID-19 outbreak as a pandemic. The move was not a surprise, but it confirms the severity of a crisis that has already caused huge global disruption. It does not alter our assessment that we are in a “seasonal pandemic” scenario that will likely peak in May globally with an ever-growing impact on major events, including sports fixtures.
Companies across the world are grappling with managing the consequences of the restrictions imposed to manage COVID-19, with decision-making around major events and sports fixtures particularly time-sensitive and contentious given the considerable impact on organisers and participants. The cancellation or postponement of scores of major events and sports fixtures already this year, some of which were not due to take place for many months, has starkly illustrated the social and economic impact of the situation.
Social-distancing measures are key to containing COVID-19. But their use poses a particular threat to major sports events. There has been little consistency so far within or between countries around when, how or even if to restrict or ban major events and sports fixtures. In early March, as COVID-19 cases surged to more than 1,000, the French government banned events with more than 1,000 participants (although exceptions were identified, including political protests). European football (soccer) and rugby fixtures have continued in some countries but been postponed, cancelled or played without any fans in attendance in others. In the US, the NBA has suspended all basketball games until further notice. The most significant non-Grand Slam tennis tournament, which takes place every March in Indian Wells (California), has been cancelled, and the nearby Coachella music festival, which attracts around 250,000 people every year, has been postponed from April to October. International investment events and countless business meetings have been cancelled or postponed.
The signs are that the worst may be over in China and South Korea, but with cases rising rapidly in around 100 countries around the world, major events and sports fixtures will remain under threat. Organisers and sponsors are grappling with inconsistent and arbitrary rules on large gatherings, transport and access to venues; rising case numbers; rapidly evolving operating environments; stretched public services; distracted partners; and apprehensive attendees and supporters. Effective monitoring and scenario forecasting and a methodological approach to threat and risk management are critical to overcoming these challenges.
In Control Risks’ “seasonal pandemic” scenario, which we identify as our most likely scenario, major international meetings, events and sports fixtures will continue to be subject to cancellation until at least mid-2020, or until COVID-19 is successfully contained. In this scenario, after a global pandemic peaks in May, global recovery starts in late Q2/early Q3, with supply chains and transport recovering towards the later part of the year. In this context, global economic growth will slow significantly. In the event that COVID-19 is contained in the developed world but expands in emerging and developing countries and the global economy is forecast to dip into recession, Control Risks’ “Uneven outbreaks” or “Global pandemic” scenarios come into play. In these scenarios, major events and sports fixtures are subject to postponement up to and beyond the end of this year.
Scenario 1/ Quick recovery
- Fall in cases in China, spread of virus contained by April.
- Supply chains, transport links are reconstituted.
- Transport to/from and within China normalises by end of Q2 2020.
- Proliferation of new cases outside China is geographically limited and contained.
- V-shaped global recovery starts in early summer.
- Security and geopolitical consequences remain limited.
Scenario 2/ Seasonal pandemic
- Spread falls in China but accelerates outside China. Global pandemic peaks in May 2020.
- Disruption of production and supply chains remains significant in Q2; recovery starts late in Q2/early Q3.
- Supply chains/transport links recover in Q4; 10-15% of supply chains permanently dislocated.
- Major events disrupted until containment achieved.
- Global growth slows significantly.
- Security situation remains stable, law enforcement under pressure.
- Govt’s in Italy, Iran, S Korea under pressure.
Scenario 3/ Uneven outbreaks
- Spread contained in developed markets by June 2020.
- Spread continues in markets where healthcare/gov’t capacity is limited.
- Supply chain disruption continues into 2021; companies must reconstitute 20-30% of networks.
- Spread of the outbreak slows in end Q1 2021; recovery is L shaped.
- Security situation worsens in affected regions; attacks against foreigners and foreign companies increase.
- Geopolitical consequences are significant; inter-state tensions and migration rises.
Scenario 4/ Prolonged pandemic
- Pandemic spreads widely and globally.
- Containment measures outside China are not robust; number of cases grows.
- By Q4 2020, over 60% of supply chains need to be reconstituted.
- Global economy enters recession.
- On-shoring of supply chains brings political fragmentation and protectionism.
- Recession triggers political crises, global anti-crisis effort suffers.
- Security situation worsens.
- Pandemic triggers populism/authoritarianism; borders potentially close.
Monitoring developments to assess how the situation is evolving is key to effective and timely decision-making for organisers and hosts of major international events and sports fixtures. Identifying unfolding scenarios at an early stage enables organisers and hosts to protect their brand, reputational and future financial health. An understanding of the particular environments where events and sports fixtures are scheduled is also key to buttress defences against the uncertainty and turbulence of the pandemic crisis. Identifying key stakeholders and partners, engaging effectively with them, and understanding their modus operandi, their preparedness for crises and their past experience of handling them will also strengthen the quality and timing of decision-making.