While nobody has a blueprint for navigating through COVID-19, Al Kidd, CEO of Sports ETA, the national trade association for sports tourism, has put his decades of business experience to use in managing through these unprecedented times. This interview, conducted in early November, captures what the organization has done to help its members stay informed and emerge intact when the pandemic has subsided.
Sports Planning Guide: How do you best summarize 2020?
Al Kidd: There’s three things that have happened during this time:
- Reaction phase – this started with, OMG, what happened, followed by readjustments, furloughs and trying to figure out guidelines for reopening.
- Recharge phase – this focused on professional development and diversification. This is where education flourished. We jumped in very quickly to find services and products that would make a difference. One of the things we did was establish a virtual distribution network called SEEN – Sports Events and Entertainment Network – to aid our members during this time.
- Relaunching phase – this is what we’re in right now, but it looks like we’ll be in this until the middle of next year.
SPG: What has to happen before we get a significant, widespread return to play of amateur sports?
AK: We’re getting some sporadic openings around the country, but there’s a couple factors at play in order for us to have a significant return-to-play. The first thing is there needs to be a common alignment with state opening guidelines. States that don’t have restrictions right now are getting business from states that do. There needs to be an evening out. Number two, there needs to be a comfort from youth and their parents in traveling in groups. Sports is primarily a group gathering, and right now there continues to be big restrictions on those taking place in most places. We’re going to have to come up with ways that allow more people to gather in groups. Number three is the renormalization of high school sports. This includes reestablishing the “old season.” By shifting sports seasons, we put major compression on the ability to have travel sports in those areas. In many states, athletes are not allowed to do travel and interscholastic at the same time. This also impacts college recruiting.
Once those three elements come back, we’ll start to move back into a widespread reopening of sports tourism and reestablishing of large events.
SPG: The pivot to education you spoke of was critical, as a lot of people were looking for direction. How did you ramp up an educational platform in this new environment?
AK: We had been planning a virtual event before COVID hit and our intent was to announce it at our spring symposium. So when we did our virtual event last year, we had already done some planning.
When we made the determination to switch to a virtual conference this year, we thought it was important to be the first. We’re the national trade association. We minimized the risk by controlling the production costs and we were very pleasantly surprised that we had nearly 400 people attend the August virtual symposium. As much as anything, this event was an opportunity to regather. It was as much therapeutic as it was business being conducted.
A lot of people, both inside and outside the industry, took advantage of the education we offered, but one thing we did early on was recognize that we were not funded to be an original developer of primary content or research so we aggregated in masse.
SPG: How does this change going into 2021?
AK: Right now, we’re full-speed ahead. We have secondary dates for our April symposium if we need to reschedule. We’re still planning on having our educational forum, 4S Summit, in El Paso in October.
We are developing programming for next year that will include at least one additional virtual b2b marketplace. We’re looking at adding a virtual educational summit in February. We’re also planning to offer a virtual facilities and services industry marketplace that brings together suppliers like flooring companies, lighting companies with facilities in a robust marketplace for services and equipment.
We intend to combine virtual and live as hybrid events into the future. I don’t anticipate us peeling that back, there’s value to both. We’re also developing community groups around various aspects of the business. I’m so excited about that shift.
SPG: When will you decide on the status of your in-person events for 2021?
AK: Right now, we have two events – our women’s event in conjunction with the NCAA Women’s Final Four, which takes place end of March, and we have our symposium slated for April 26 in Birmingham. I’m in conversation with a lot of leaders in tourism and I’m hearing more and more the first quarter is being cancelled. There’s no question we want to be the first in-person event out of the blocks. We will be driven by what we’re allowed to do and what’s safest for our members.
SPG: Not a lot of businesses can go a year-plus without revenue. Where does the fallout begin from the NGBs and major rights holders?
AK: There appears to be the high potential of significant governance changes in our amateur sports world. They are going to need to do some thinking of how they create a sustainable business as the inability to stage significant live events is having a dramatic effect on major sports.
Obviously, there’s some major headwinds with the Olympic Governing Bodies. On the business side for the Olympics in particular, the jury is still out on how that’s going to roll out. There’s still a lot of questions as to the delivery of the event. In terms of the NGBs individually, almost all of them have had cutbacks and they live primarily on events which have been scaled back or cancelled. The other part of their revenue is membership, which is also down.
In regards to NCAA, I think another year without the Final Four will put a severe financial strain on the organization. It’s all about when we can safely get back to play.
When you think about rights holders and event developers – these are small businesspeople and they’re feeling the brunt of this. The strength of youth sports is that it’s a cottage industry, but that’s also its weakness. The most important question they’re asking is what can they do that will create some revenue that will sustain the organization until they’re able to fully reopen.
SPG: Looking forward, how does that affect the financial health of hosting organized events?
AK: A major consideration for the industry is some of the income streams that were previously established around hosting fees, rights fees and rebates from hotels; they might have to go back and rediscuss that. With budget reductions at CVBs and sports commissions, there’s a question if they have the financial resources to deliver. The numbers that we’re seeing are that more than 50% of budgets are cut and 40% of those are cut by more than 50%. There’s a reduction in the amount of money they are able to give and the whole financial picture may get reshuffled. People are going to have to work in tandem, but in all likelihood the economics appear to be changing.
There has been a steady growth in the last few years from destinations owning and operating events. Our research showed over 50% of destinations have owned and operated events. This pandemic is going to accelerate diversification of income streams. Now, owned and operated may be one of those, and it has to be evaluated on a case-by-case basis because every event is not going to make a profit. From my personal experience it takes a couple years to establish some traction where you have predictable revenue. It is certainly one of the revenue streams people are looking at.
SPG: Switching to recovery, in past recessions, from a travel industry standpoint, sports was the tip of the sphere in coming back first. Does that same thing happen again, or has there been some structural damage that would prohibit this?
AK: Right now, those that have recovered have been outliers. Until I get the data that “these things are happening,” I’d be remiss to lead a parade that’s not ready to start. We’re going to have to experiment. We’re going to have to coexist with COVID. At some point, when some of the issues are resolved and we have a clearer path, I absolutely believe that sports will be one of the top, if not the top ways that brings tourism back in a big way. The pent-up demand from athletes, the frustration from parents is real.
SPG: What have we learned from COVID? Is there a silver lining?
AK: First, we don’t control the game. Once we get to a point when sports are back, we need to create comfort for people traveling. All indications are that it starts with local, then regional, national and finally international large group gatherings being the last to open.
If there is a silver lining, it’s that there are destinations willing to take a chance. We talked ourselves into doing nothing but in order to come out of this more fully, we’re going to have to take some chances. There’s going to be people who win and people who lose. I’m very encouraged that more destinations are taking a chance and as long as they are tracking the data and staying inbounds, I’m really encouraged that we have a bunch of people willing to do this. Sports will be one of the early mechanisms for tourism.
by Al Kidd