Empty arenas not a game for sports and entertainment sponsors – Marketplace

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.

What happens if some relief funds are not spent?

Depending on how you count it, the federal government has put up about $4 trillion of pandemic-related relief so far, from loans to tax cuts to new spending. But, said Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, “there’s a lot of money still in the pipeline.” Leftover PPP money is sitting in an account. But other expenses, like unemployment, are more like Congress saying, “We’ll spend it if we need to.” But whether this or that program spends everything it was expected to is a very different argument than how much total need is out there in the economy.

How should companies compensate their employees’ work-from-home costs?

A new survey from the compensation software and data company PayScale found that less than 25% of organizations provided any kind of stipend to employees working from home last year. As companies make some level of working from home permanent, they need to think carefully about their compensation policies because figuring out stipends can get tricky, said Shelly Holt, chief people officer at PayScale. Also, a study from the University of Washington found that about 75% of Americans can’t work exclusively from home. Folks working in health care and at grocery stores among so many others.

What is budget reconciliation, and how might Democrats use it to pass COVID relief?

Both President Joe Biden and Democrats in Congress have said they will pass the bill without Republican support using a process called budget reconciliation. In the Senate, “the final vote on any piece of legislation does pass with a simple majority,” said Kelly Whitener, associate professor at Georgetown University. But under Senate rules, you can’t get to that vote unless at least 60 senators agree to end debate. Budget reconciliation is a way around this, but only in very specific cases. It’s a process created in a 1974 budget law that allows senators to bring a bill to a vote with a regular old majority.

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