COVID-19, Football & Digital: 2020/21 Season & Beyond

COVID-19 has caused a ubiquitous, seismic shock throughout the football industry. The ongoing pandemic has vastly altered the experience for players and fans and created the impetus for all stakeholders in the football ecosystem to adapt their business models to thrive in a post COVID-19 world.

In our 23^rd edition of the Deloitte Football Money League, published at the start of 2020, we identified a series of key digital trends and predictions likely to impact football clubs. Given the recent shift in the overall landscape, this article will seek to re-evaluate these trends and consider how they may have been re-shaped, restricted or accelerated over the past seven months. We will also explore the longer term impacts of COVID-19 on football, and specifically how this may change the role of digital within the industry.

COVID-19: The impact on football

Introduction
The 2020/21 season will be directly impacted by COVID-19, across a number of areas:

• There will likely be a broad range of scenarios impacting the timing and nature of the return of fans to stadiums.
• Broadcasters and commercial partners will face economic challenges as a result of the changes in both fans’ attendance and consumers’ interaction with the sport.
• Clubs should expect uncertainty in their matchday revenue forecasts until further Government guidance is offered regarding crowd capacity at sporting events.

Whilst some clubs will be better positioned to weather the storm than others, COVID-19 will undoubtedly have implications for all. Each club faces a struggle to retain and grow revenue from commercial and sponsorship agreements, whilst also navigating the future uncertainty of matchday revenues.

Sponsorship and commercial revenue is a major source of income for competition organisers, clubs and national teams (28% of total revenue in the Premier League). The successful restart and completion of the 2019/20 season at the highest level of club football has averted the most serious risk facing clubs - being unable to fulfil fixtures, and therefore not comply with their commercial obligations and sponsorship agreements. However, the longer term reaction of sponsors and commercial partners remains uncertain.

Whilst the full financial impact of COVID-19 is yet to be felt, it is anticipated that the clubs in smaller footballing countries and those in the lower leagues of larger countries will be hit the hardest. These clubs typically have a greater dependency on matchday revenues. Deloitte’s Annual Review of Football Finance 2020 identified that within the Premier League matchday revenue continues to be the smallest component of total revenue (13% in 2018/19), whilst for other leagues it is far more significant. In the English Football League Championship, matchday takings account for 21% of total revenue, and this increased further outside of the markets of the ‘big five’ European leagues. For example in Scotland, matchday revenues equate to 47% of the clubs’ total revenue in the top division.

Trends – and the impact of COVID-19

Sponsors want true partnerships - accelerated
As identified in the Deloitte Football Money League, traditional sponsorships are evolving. Companies are looking for increased alignment on brand and purpose, whilst also placing increased value on digital marketing platforms and partnerships that are underpinned by data.

In the long term, commercial partners will still want to be associated with football, but clubs will increasingly need to prove their worth to sponsors. Alignment on brand and purpose is now the minimum. Sponsors will place a higher value on the clubs that have a deep understanding of their fanbase, especially where that knowledge is underpinned by data.

For many sponsor organisations, particularly those in severely affected industries such as travel and hospitality, tough spending decisions will be required. Short-term discretionary expenditure such as sponsorship, marketing and corporate hospitality will come under intense scrutiny. The implications of this could be that both clubs and companies alike shift their focus to smaller value, higher volume commercialisation rather than large deals. For example, by advertising on digital assets which are cost-effective to set-up and run.

Football clubs will come under increased pressure to provide sponsors with an understanding of their fans. Who are they? What demographic segments are they focused in? How are they engaging with the club? Through what channels? What is the demonstrable impact of these marketing campaigns? Football clubs can no longer principally rely on their brand to generate recurring sponsorship deals. The clubs that are able to provide sponsors with actionable insights will have a competitive advantage in an increasingly tough sponsorship market.

Diversifying fan base – changed
Ahead of the 2019/20 season, many football clubs were focusing on the diversification of their fan base including initiatives to better understand ‘Generation Z’ and seeking increased engagement with global fans. Whilst this will remain important; in light of COVID-19, it is likely that clubs will further increase their focus on their existing fan base, specifically season-ticket holders and ‘hardcore’ fans, as the match day, in stadium connection is temporarily lost.

Data is likely to play a pivotal role in understanding how habits and behaviours have changed due to the impact of COVID-19. For example, truly understanding what fan priorities are is critical when tailoring the engagement approach, in an industry that now demands experiences and interaction beyond the game. The richer the data, the more authentic the fan engagement and experience will be, especially when these experiences are unlikely to be in person for the foreseeable future.

In the wake of COVID-19, clubs and leagues should look to adopt a more granular and behavioural approach to fan relationship management. This should enhance the ability to sustainably acquire, engage and retain more fans as part of an insight-driven decision making process. Improving fan analytics by capturing data more efficiently, before layering over AI and analytics to understand behaviours could help uncover key fan drivers and augment existing expertise in clubs. Understanding fan personas and associated behaviours will ultimately help clubs deliver the right experiences to serve fans, whilst providing additional opportunities to partners and sponsors.

Content strategy - unchanged
Life outside of the 90 minutes has never been so varied for football fans, who are now able to interact with swathes of digital content outside of the traditional matchday. Therefore, delivering the right content to fans is still vitally important. During lockdown restrictions, a common trend seen on many clubs digital platforms was the use of its archive. For Manchester United, this was in the form of “throwbacks” to famous matches and goals scored, uploaded to their Instagram, Twitter and Facebook pages. Looking into the future, English clubs could look to partner with cloud technology platforms, similar to that of the Bundesliga and Amazon Web Services. Using AWS technology, the league built a cloud-based media archive that will “automatically tag specific frames from 150,000 hours of video, with metadata such as game, jersey, player and venue”, which enables them to search and locate match highlights quickly and accurately.

Football fans are also beginning to see advancements move into live sport. For example, the scheduling for the restart of the 2019/20 season saw all 92 remaining Premier League fixtures broadcast live and staggered across familiar and new kick-off slots spread across Sky, BT Sport, Amazon and the BBC. Whilst negotiations for the next broadcast cycle are not due to progress until 2021, the impact of COVID-19 on broadcasting rights, the success of Amazon’s introduction to football broadcasting and the increased popularity of streaming services (as highlighted in Deloitte’s digital media trends survey 2020), could further disrupt football broadcasting norms in the longer term.

Personalised experience

In-stadium experience – changed and accelerated
Uncertainty looms over the prospect of fans return to football stadiums for the upcoming 20/21 season. Whilst some recent announcements may provide hope that a measure of normality can return, in countries that have been more severely impacted by COVID-19, it is unlikely that we will see full-stadiums any time soon and questions will be asked about whether the stadium experience will ever be the same again.

We may see leagues adopt a “phasing approach” similar to the National Rugby League (NRL) in Australia. The “phasing approach” at first consisted of fans confined to corporate boxes, and has now progressed to hosting up to 10,000 fans in larger, modern stadia. In New Zealand, all restrictions on mass gatherings have now been relaxed and attending live sports events has proved immensely popular. The first four games of the Kiwis’ ‘Super Rugby Aotearoa’ tournament had an average of 26,000 people in attendance, a 100% increase on club rugby attendance prior to the global pandemic.

Unfortunately for sports fans in countries such as the UK, the return back to the stadium may be slow and uncertain. At the time of writing (July 2020), the Deloitte State of the Consumer Tracker highlights public reluctance to use public transport – 57% of people plan to limit their use of public transport over the next three months whilst only 24% of people plan to use rail travel for leisure purposes. Meanwhile 36% of people are delaying large purchases, which may include expenditure on season tickets or corporate entertaining. Clubs will therefore want to use the data they have about non-season ticket holders to increase ticket sales and utilise all available capacity once a return to the stadium is possible.

A key question for the in-stadium experience is whether fans will want to “stay around for longer” in a post-COVID-19 environment. As outlined in the Deloitte Football Money League, creating a memorable spectator experience is vitally important in encouraging fans to extend their visits, increase their expenditure and book return visits. This can be facilitated through creating a positive environment in the stadium, in which it is easy to locate seating and seamless to purchase merchandise, food and drinks. Social distancing requirements are likely to accelerate the use of digital technologies to improve the fan experience, particularly if staggered entry and exit times are enforced; thereby fortifying extended stays at stadiums as a component of how event operators manage social distancing. This is likely to include using contactless technology (e.g. tickets, parking and cashless vendors) to reduce physical touchpoints and digital tools to monitor and optimise queuing times or provide at seat or click and collect delivery.

At home experience – accelerated
The demand for ‘At Home’ experiences will be even more important in the near future. In the 2019/20 season we saw football come back ‘behind closed doors’, but minimal change to the at-home experience was delivered. In other sports, such as Tennis’s Schroders Battle of the Brits tournament, there was a noticeable increase in player engagement such as in-play player /coach / commentator interaction that was broadcast in real-time to viewers at home.

There was also an increase in social interaction during games, for example replicating the experience of watching football alongside a friend, which is something that Generation Z have been demanding over the last couple of years. Clubs will need to look to build on these experiments to continue to enhance the experience and engage fans during the 90 minutes of the game. The extent to which this is possible will of course depend in part on the rights held centrally and those held by the club. Interesting discussions lie ahead as broadcasters seek to enhance their product whilst clubs seek to hold on to the rights that allow them to create their own content.

Digital experience – unchanged
Fan expectations are changing. They are expecting unique services, offerings and insights through experiences that are personalised and contextualised. Clubs can use technology to deliver a scalable, tailored, omni-channel experience that transforms fans from spectators to participants, whatever the time and place. These initial predictions, made in the Deloitte Football Money League, remain largely unchanged, however the impacts of COVID-19, may cause clubs to increase their attention on fans at home and the future in-stadium experience.

New trend: Innovation – new revenue streams
The potential absence of fans in stadia for at least part the 2020/21 football season and the associated loss of matchday revenue means that clubs may be spurred to accelerate the exploration of alternative revenue streams. As outlined in our Football Money League report, clubs’ ability to boost revenue streams that they control directly will have a significant impact on their financial prosperity. The impact of COVID-19 provides a catalyst for fresh ideas and innovation.

In accordance with the Deloitte Digital media trends survey, prior to COVID-19, around 25% of consumers watched livestreamed and recorded video of others playing video games each week. For Millennials and Gen Z, it was around 50%. Since the COVID-19 pandemic began, these numbers have held strong, with audiences predominantly watching how-to-videos, game walk-throughs, professional gamers, athletes livestreaming their play, and eSports competition. With the cancellation of live sports, many professional athletes have stayed connected with their fans by streaming and commenting on their own video gameplay. Moreover, the Premier League launched the inaugural ePremier League Invitational competition during lockdown. According to Nielsen Sports, the final between Trent Alexander-Arnold (Liverpool) and Diogo Jota (Wolves) attracted three million viewers on Facebook and 394,000 viewers on YouTube, demonstrating a 275% rise in viewership from the opening round to the final. It is likely that this phenomenon of playing, streaming, watching, and socialising within video games will continue to grow and expand when lockdowns and restrictions are eased.

During lockdown, football clubs used their brand to help their fanbase and the wider community adjust to the ‘new normal’. This is evidenced by the Premier League’s Primary Stars and Spurs’ home-schooling initiatives. Clubs also began to use their fitness and exercise credentials to produce video content via digital channels. For example, Liverpool’s ‘LFC Home Workouts’ series with Andreas Kornmayer (Head of Fitness and Conditioning) and Chelsea’s 20 minute videos, which featured players training with shirt sponsor, Nike. Joe Wicks’ high intensity interval training routines, aimed at all ages and fitness-levels, have formed a central component of people’s lives during lockdown, with his online videos being viewed by up to 950,000 people at a time. Online workout platforms, such as Les Mills On Demand (900% increase in use since January 2020) and Peloton (where 23,000 people participated in a single class), have also seen a massive surge in demand.

How people fuel this proliferation of exercise has also changed. Deloitte’s retail and consumer product trends report found that COVID-19 has accelerated the adoption of non-traditional models in “essential” categories such as food, grocery and pharmacy. For example, in April, consumer spend on meal kits, online grocers, and prepared food delivery services increased by 40%. In particular, the rise in relevance and revenue of meal kit providers, such as HelloFresh and Gousto, may prove an appetising partner for many football clubs and players alike.

What now?

The destructive impact of COVID-19-has made football clubs re-evaluate their business models and realise the need to accelerate their digital transformations.

Lessons can be learned from the corporate world. In many of the success stories during lockdown (e.g. Amazon and Netflix) digital technology, data, knowing your customers and how to target them has been at the core of each story. Football clubs could apply suitable elements of this strategy to their future approach. As highlighted in this report, understanding your fanbase and their different personas will enable clubs to understand how best to evolve both in-stadium and at-home experiences. furtheremore, knowing your fan-base will continue to drive commercial revenue from sponsorships and partnerships, whilst potentially enabling the exploration of alternative business models and revenue streams.

The Deloitte Football Money League report highlighted that clubs ‘now more than ever, must keep their eye on the ball’ to pursue further growth. COVID-19 has emphasised that the clubs who can remain agile, transform and innovate have a unique opportunity to stabilise and grow, whilst those that accept the status quo risk standing still, or even falling behind the pack in these uncertain times.