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COVID-19

Empty arenas not a game for sports and entertainment sponsors

Andy Uhler Feb 15, 2021
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Attendance restrictions pose a problem for brands trying to reach fans. Tim Smith/Getty Images
COVID-19

Empty arenas not a game for sports and entertainment sponsors

Andy Uhler Feb 15, 2021
Heard on:
Attendance restrictions pose a problem for brands trying to reach fans. Tim Smith/Getty Images
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New York Gov. Andrew Cuomo announced Wednesday that sports arenas that seat more than 10,000 people could host fans at up to 10% capacity as long as COVID-19 guidelines are followed and the attendees had negative test results. 

It’s a nice start, but Madison Square Garden with a few thousand people is still almost empty. 

Especially to a company that’s paying teams to showcase its brand inside arenas and stadiums. 

Peter Laatz, global managing director with the sponsorship consultancy IEG, said sports and entertainment sponsorship amounts to about $26 billion a year in the United States. And what was paid for before the pandemic is not entirely being delivered because of all those empty seats.

“What we’re currently dealing with right now is about a $14 billion gap that brands and properties have to agree on how to reconcile,” he said. “And it’s not an easy thing to do.”

He said teams are trying to make good on their contracts with brands, doing things like putting logos in places where they hadn’t been before so they’ll at least be seen on TV. 

The New York Islanders hockey team now has a couple of stickers, UBS and Northwell Health, on the side of players’ helmets. 

But that only goes so far.

“Brands that we work with are saying to us, ‘If we wanted all these make-goods, we would have had them in our deal. I want money back or I want an extra year,’” Laatz said.

“I want a refund!” is about the last thing team owners, who are already losing ticket and concession revenue, want to hear.

But Nicky Lewis, assistant professor at the University of Kentucky, said sports teams and leagues, and by extension the brands they partner with, now have an opportunity to rethink how they interact with fans. 

“Engaging with in-person spectators through mobile media, digital media, in-person media — that’s all gone,” she said. “And so you have the screen at home, and we still love to watch our sports on big screens, but you’ve got to hit them on the mobile media device as well.”

And Angeline Close Scheinbaum, professor of sports marketing at Clemson University, said when people are back in the stands, they can expect teams to continue to hit them up on their cellphones with info.

“What are the wait times at this particular concession stand? Or kind of giving them little push alerts as a way to remind them about concessions,” she said.

She said that’ll be too much for some fans, but the way people watch games is different these days, whether they’re at home or in person. Marketers are going to find those opportunities. 

“Especially when the game itself is kind of at a lull, it becomes an extra marketing and engagement opportunity where you kind of have consumers in a place where they’re cognitively and emotionally heightened,” Close Scheinbaum said.

That’s when they’re likely to buy more stuff, like another $12 beer or $10 hot dog.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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