The Economist November 28th 2020 pp57-58 |Business|Live Events|The roar of the crowd|”How social distancing is changing the business of getting people together.”
Bruce Springsteen and the E Street Band closing the Los Angeles Memorial Sports Arena March 19th 2016. Image Mark Stene.
Read the article for full detail.
Facts Presented in Figures
Crowd-event firms (Market capitalization worldwide by speciality ($Bn) for the periods of January 1st 2020 Vs November 25th 2020.
Conventions & tradeshows $160Bn Vs $125Bn
Event Promotion $50Bn Vs $40Bn
Professional sports $40Bn Vs $30Bn
Worldwide trade-show revenue
2020 $10Bn (Forecast)
2022 $22Bn (Forecast)
Summary of Article
COVID restrictions involving masks and social distancing have decreased total industry revenue by as much as 25% for trade shows, conventions, entertainment and sports yet market capitalizations, for public firms in this space, have been more resilient falling only 10-15%. Investors apparently believe there will be a comeback and that long-term viability is good. Given that, it is important to note that the impact is uneven with smaller independent music venues and teams in weaker sports leagues suffering a bigger hit. Without new government bailouts only 10% of small music venues are expected to survive. Sports leagues those that have long seasons, low ticket prices and little or no revenue from online and television broadcasts will not recoup heavy losses in the near-term. See details below regarding individual companies and organization.
Try as they have, various online workarounds contributed income fell short. Adding to worries, for all sports leagues and even traditional sports broadcasters, is an emerging trend especially by Millennials and Gen Zs of preferring broadcasts that cover highlight snippets of activity across leagues rather than a specific game. These fans active in Fantasy Leagues and Online Sports Betting are focused on that and also have come to enjoy new hosts of these shows. Regardless some of these online workarounds or innovations have sustained and ensured the likelihood of a future for tradeshows, conventions, music and sports. Even when fans can ultimately return to feeling the roar of the crowd or networking at conventions the future is likely incorporate some of these new online innovations.
Companies Or Organizations Mentioned
ESPN (Disney) cutting 500 jobs “amid ‘tremendous disruption in how fans consume sports’”
Live Nation-Revenues Q3 2020 down 95% from Q3 2019. They will likely survive with $1Bn in case and $1Bn in credit line. Shares down only 10%
CTS Eventime (European rival to Live Nation) revenue 9 months 2020 down 79% versus same period in 2019. Shares down only 15%.
National Independent Venue Association (America) “says that 90% of its 2,900 members expect to close permanently without a bail-out…
National Exhibition Centre
Reed Exhibitions (RELX)
New York Mets will lose out on $250M in ticket sales