The impact of Covid-19 on sports industry

Di Barbara Passerini

The COVID-19 pandemic has been spreading globally for almost a year and has affected all aspects of public and private life. We know how some sectors such as tourism and catering have been hit particularly hard by this situation; however, there are also other sectors that have suffered the impact of this pandemic and one of them is the ‘team sports industry’.

Since the beginning of January of last year almost all sporting events have been postponed or cancelled. The Olympic Games planned for 2020 in Tokyo, for instance, have been postponed to 2021.
In February the many European soccer matches were either played behind closed doors or cancelled, and by the end of March 2020 no matches were being played. If soccer leagues restarted after a short break, they did so with matches played behind closed doors, so without spectators in the stadium, affecting significantly the character of the game. As a matter of fact, the most important characteristics of professional soccer is the typical stadium atmosphere, which is completely lost with matches played behind closed doors. This way of playing not only harms the players, who don’t receive the acoustic support from their home crowd, but it also diminishes the income from ticket sales and catering.

As a result, during the COVID-19 lockdown. professional soccer clubs had few sources of income, while still having to meet their expenses, in particular they had to pay wages to players to  guarantee their salaries. With income missing and the date of resuming play unclear, though, clubs managed to negotiate salary reductions with players, proposing the application of a salary cap, which is an agreement that clubs can spend a limited amount of money on players’ salaries. The players of Juventus Football Team, for example, have agreed on a wage freeze that will save the Italian champions €90 million. “The understanding provides for the reduction of the compensation for an amount equal to the monthly payments of March, April, May and June 2020”, Juventus said in a statement. But, even if the COVID-19 pandemic has created new challenges for sports companies and soccer clubs, they demonstrated to know how to deal with them in the best possible way, ensuring that players can compete safely and that the public can continue to watch the matches, even if only virtually.