The prevailing ‘Covid-conditions’ in countries around the world could not be more different. As New Zealand heads into lockdown once again having identified a handful of cases, a world apart from where I reside in the UK which today stands at a depressing cumulative total of 4,188,400. I have to admit to feeling a pang of jealousy after speaking to my colleague in Sydney last week, as he looked forward to a night at the theatre – AT THE THEATRE!
While case numbers and restrictions are wildly different in different regions, the sentiment in sport, media and entertainment has been more consistent. All have been affected to a greater or a lesser extent by this pandemic through the last year, in the worse cases suffering large revenue and people losses. However, now, encouragingly, and right across the world, it feels like the tide is turning.
I caught up with my colleagues, Tom Watterson, who sits in Hong Kong and Jay Hussey, in New York and Boston to understand the situation on the ground in their regions, and how it compares to what we are facing in Europe.
Europe | Co-Managing Director, Europe & Asia, Mark Moreau
As discussed infinitum the pandemic has had a crippling impact on the sports and entertainment industry. Just about every venue was shut down. The impact went far beyond the cancelled concerts and postponed seasons: Fans were no longer spending money in bars & restaurants and no one was traveling.
After the heart-warming novelty of the previous weekends’ snow, the UK population collectively held our breath that the news being delivered by our tousled PM would be the beginning of the end of LD3. And so it has proved; cautionary caveats aside the country once again has a spring, if slightly fatigued one, in its’ step as we look forward to getting back to doing what we love, with those we love.
The level of optimism and intent was clear with online holiday bookings exploding, Reading and Leeds Festival line ups hastily re-confirmed and petitions put in place to expedite the return to stadia date ahead of the auld enemies doing battle in June. Emerging from our own winter hibernation we, like the grizzly, are now frantically foraging for the spring berries of content and entertainment to fill our social diaries once more. So where to start, the choice is endless and whilst we are bizarrely somewhat under prepared we are enjoying the fact that we again can make plans. The broad ranging entertainment being offered to us – be it city breaks to far flung destinations or tickets to lesser-known bands – are increasing exponentially, almost by the hour. I for one, am delighted, and lapping it up, as are my friends and family.
Asia | SRI Director, Asia, Tom Watterson
Sitting here in Hong Kong, I feel very fortunate that despite a rollercoaster of regular loosening and tightening of restrictions, we were never subjected to a formal lockdown. I have felt very guilty when discussing a weekend of playing with my son in the park, lunch at the local café and a trip to the mall to colleagues in other parts of the world subject to much more stringent restrictions. If it wasn’t for all the masks, you might sometimes be forgiven for forgetting there was anything going on at all! The region was not spared the containment measures and resulting economic impact of course, with the live events sector nose diving and the largest blow coming to the airline industry.
By and large, Asia is the land of the fan, with the most popular sports leagues based overseas, so viewership was only really impacted when games were cancelled. Savvy rights holders have actually capitalised on the situation by engaging in-depth digital marketing campaigns to build affinity with fans stuck at home or facing pandemic-induced difficulties. However, the lack of ability to travel across the region is also impacting ability to make deals and international sales offices of these rights holders have seen the ripple effect of the economic impact at HQ leading to downsizing or closure of Asia operations. These entities run the risk of missing out on traction in a fast-growing region though, especially as Asia is well placed to bounce back from the crisis quicker, and much can be said about weathering the storm or even expanding Asian operations because of this. In fact, Nielson reported recently that over the next 10 years, Chinese brands will be responsible for one-third of all growth in the global sponsorship market, so the potential is enormous.
In South East Asia, there is an ever-growing buzz around esports, with brand partnership deals seemingly being announced on a weekly basis and regular news of fund raising and investment flowing into the sector. Obviously, this was a sector well placed to capitalise on a (literally and metaphorically) captive audience, but the inability to have large-scale events has impinged on revenues. The noise around esports will just keep growing and its influence will continue to seep into other parts of the entertainment spectrum, even more so when travel and event restrictions lessen.
Overall, there seems to be a great atmosphere of optimism permeating through the region, with clients a lot busier on strategy and forward-thinking plans, rather than fire-fighting, and more job opportunities emerging. To coin an analogy, it very much seems like the struggles of pushing the boulder from the bottom of the hill to the top is coming to an end and it won’t be long until it’s pushed over the peak and the momentum will really start to shift. Hopefully we are entering one final period of struggle for brands, businesses and individuals and then it’s all downhill from here!
Australia | Managing Partner, ANZ, Jonathan Harris
After a tremendously difficult six months we started to see the first glimmer of recovery in the last quarter of 2020 and are pleased to report this has continued into 2021.
Last year ‘Down Under’ was all about survival, however, in 2021 we are anticipating growth in the burgeoning areas of data, digitisation as organisations seek renewal and further commercialisation. Organisations definitely hit pause on investment into new functions or diversification of revenue streams last year but as confidence comes back into the marketplace we expect a strong drive from CEOs looking to build adaptability and diversity into their businesses and leadership.
In SRI’s traditional functions of sport and entertainment we always see a lot of activity in an Olympic year as organisations begin their Paris 2024 cycle. The marketplace will be bolstered by a number of major events including establishing the FIFA Women’s World Cup as well as the great news from the IOC for Brisbane 2032.
Roll on 2021!
North America | CEO, North America & President, Executive Search, Jay Hussey
Like my colleagues in Europe and Asia, there is growing optimism and sense that we are transitioning to the “next normal”. Twelve months of pandemic pessimism and malaise is giving way to what one CEO recently described as “wilful optimism” – the sense that it time to shake off the cobwebs and double down on growth.
Market and capital condition certainly appear ripe for this. Management consultancy Bain & Company reported that the US private equity sector entered 2021 with more than $1 trillion in “dry powder”, investment money that will be eagerly looking for new homes in the months to come. In addition, the explosion of Special Purpose Acquisition Companies (SPACs) means that even more public market money will be rushing in to provide businesses, at all stages of growth & maturity, with accesses to additional capital.
As we saw in the rebounds of 2002/2003 and 2009/2010, the increased supply of investment will be met with a constrained supply of top talent. We fully expect that result will be an escalation in the war for that talent, particularly to for leaders with the skills needed to capitalize on and accelerate the digital initiatives that became mission-critical during the pandemic (think AI-powered analytics, ecommerce, digital fan engagement, streaming media services, video comms infrastructure, and on and on!)
So, what does this welcome ‘bounce’ mean for talent? As restrictions around the world are lifting, and live entertainment is thankfully coming back into our lives, the need for talent intensifies, as does the opportunity cost of being without that talent.
First mover advantage is now definitely upon us with rights holders, broadcasters, venues and brands approaching us in far greater numbers than at any point in the last 12 months to find them those who can capitalise on a new level of momentum.
Our advice to clients: Scrutinize your leadership bench strength and talent infrastructure now. The race back to the top has already begun and speed and agility will count for a lot.