There is tremendous value in sports and major sporting events, on multiple levels – they bring people together in a manner unlike any other shared experience. With that significance comes massive revenue and market value potential, as evidenced by the billions of dollars that most of the biggest professional leagues bring in every year.
Much of that revenue was threatened in 2020 as the COVID-19 pandemic shut down leagues and emptied stadiums and arenas. When sports events eventually returned, stadiums were relatively silent with players competing in front of cardboard cutouts and a soundtrack of crowd noise. The nearly empty stands not only stripped out the energy of the crowds, but also the revenue from ticket sales.
Competing during a global pandemic also required additional health tests, social distancing rules, contact-tracing protocols, and other measures. These increased costs, sometimes forced athletes to miss competitions, and caused several events to be canceled or postponed. Most estimates measure worldwide losses across sports associations in 2020 at anywhere from $50 billion to $65 billion.
Although these extreme losses were from an outlier worst-case scenario, the pandemic underscored just how much risk is faced each day by those in every facet of the sports industry.
At Marsh, our specialist sports risk advisers take a consultative approach to helping you manage your own risks, understand your changing risk environment, and identify the right mix of risk mitigation and risk transfer strategies. We deliver specialised advice and solutions designed to assist you in responding to your financial and operational risks and help you obtain cost-effective and secure protection against the increasingly complex, highly competitive, and ever-evolving industry risk environment.
The biggest hazard to the sports industry is the ebb and flow of fan interest – fluctuations one way or the other can have butterfly-effect consequences on the entire industry. This is extremely difficult to predict with any certainty and thus not necessarily easy to mitigate.
That said, contingency planning is somewhat more feasible for many other sports sector risks, including but not limited to:
Generally speaking, all sports leagues (professional or amateur; youth or adult) should consider the following lines of coverage:
Beyond those fundamentals, the coverage provisions an individual or organisation should pursue vary. Individual pro athletes, meanwhile, might want specialty coverage for high-value personal possessions or against kidnapping threats.
Other specialty lines worth thinking about include:
The scope and severity of risks facing sports organisations and professionals of all kinds means proper assessment of and planning for the precise hazards that may arise is of utmost importance.
Marsh brings significant experience to the table in the management of risks for athletes, teams, leagues, and other organisations in sports. We use cutting-edge analytics and outside-the-box thinking to help you determine your key risk priorities and design solutions that account for expected problems, one-in-a-million catastrophes, and everything in between.