Big brands miss live sporting events as much as you do
(Bloomberg Notice) – Sports – in all their glory of contact and sweat-sharing – did not go normally during the pandemic. That’s true if you’re Tom Brady hoisting a Super Bowl trophy above them in a partly empty stadium. But it’s also true for the rest of us.
The disruption at all levels of athletics – professional, college, youth and even recreational – has affected a wide range of major consumer brands, from clothing manufacturers and sporting goods vendors to sports giants. packaged foods and restaurants. It’s a reminder that even the side and tertiary effects of the pandemic can put a serious wrinkle in a company’s game plan.
Dick’s Sporting Goods Inc. is a prime example. Even though the retailer managed to have a 2020 gangbusters as people lived in sweatpants and spent more free time outdoors, eExecutives said the decline in sales of team sports items was a “huge headwind.” Likewise, Under Armor Inc. said this month that the decline in revenue in the last quarter in its clothing and footwear divisions reflected weakness in team sports products.
The fan outfit has also been a harder sell when the matches cannot be enjoyed from the stands. Hanesbrands Inc. said last week that sales of its Champion-branded apparel grew 11% year-over-year in the last quarter, but growth would have been stronger if not for the weak sales of logo-stamped licensed equipment such as the genre sold in university bookstores.
The fan economy extends beyond big game equipment. Darden Restaurants Inc.’s Yard House chain, which serves burgers, onion rings, and other bar fare, often has locations near sports stadiums. Whoever is typically the best performing outpost – near the Los Angeles arena where the Lakers play – has been “wiped out,” CEO Gene Lee said in September. Then there are all the packaged food companies that provide the burgers and sodas at the stadium concession stands. Beyond Meat Inc., for its part, noted that the drop in sales in its restaurant segment is not only due to low traffic in restaurants, but also in places such as sports arenas. The bizarre sporting season has even altered snacking habits: Sean Connolly, CEO of Conagra Brands Inc., said over the summer that his edible seed business suffered because “baseball and seeds go hand in hand. “.
Consumer companies are also planning advertising campaigns around sporting events, and that generally predictable schedule collapsed in 2020. The postponement of the Tokyo Olympics was the most prominent example, depriving brands such as Nike Inc. a major global showcase for their products. But even less dramatic schedule changes create strategic problems. Molson Coors Beverage Co. said last week that its final quarter included a drop in sports-related marketing spending, in part due to the delayed start of the National Hockey League season.
As we have learned to better manage the virus and vaccines have started rolling out, there is hope that things can get back to normal. For those who rely heavily on professional sport, it is good news that the The widely hailed National Football League Contact tracing and other security measures provide a model for other leagues to have seasons with fewer cancellations and interruptions. But the activity of feeding and equipping fans will likely take a longer time to return. Major League Baseball said in February, for example, that having crowds in regular season games in 2021 was going to be “An evolutionary process” which may vary depending on local rules.
The uncertainty is even greater for businesses that depend on student and amateur athletes. The return of children’s sports will be closely linked to the reopening of schools, which should take place at very variable rates depending on the state and municipality. And while the pros will be reassured by an expensive program of rigorous safety protocols, local athletes often won’t, leaving many parents reluctant to have their kids back to the game quickly. (Not to mention, of course, that the Covid-19 vaccines are not yet approved for children.)
Another looming question for consumer companies: when it is safe to return to full contact sports again, what will that mean for all the more social distancing-friendly sporting activities that people have? flocked in 2020? Sales of golf equipment increased nearly 40% from the previous year in 2020, according to NPD Group; equipment for racket sports and cycling also benefited from increased spending. These new habits in everyday athletes may or may not prove to be sustainable. Even for a company like Dick’s Sporting Goods, which can be beneficial regardless of how people divide their time between solo sports and team sports, it makes merchandising decisions difficult.
The most obvious impact of the pandemic on sport has been on its stars and the big sports leagues, including what my colleague Brandon Kochkodin reported $ 13 billion in revenue at the trifecta of the National Basketball Association, the NFL and the MLB. But the pain of sporting purgatory has been felt much more widely, and consumer companies will welcome the return of conditions for athletes – both GOATs and beginners alike – to play ball.
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.