AS GOVERNMENTS around the world roll out stimulus packages in an effort to contain the forthcoming economic Armageddon that the COVID-19 pandemic is exerting on the world, it’s impossible to not think about how it will hurt our little corner of the sporting world.
Over here the sports media, now with very little actual sport to write about, spend most of their time tallying up the financial damage that the current period of no activity is causing to leagues, teams and the people within.
It’s likely to be significant and there’s no doubt that the AFL, NRL, A-League and Rugby codes will look different on the other side of this, whenever that is.
What about motorsport?
In some areas, Motorsport is slightly isolated from similar issues being felt by the major professional leagues around the world on the basis that we have a much less significant requirement on TV and attendance revenue to support operations.
While Supercars has a very substantial TV broadcast deal with FOX Sports and Channel 10, the remainder of the sport operates on a user-pays system which means their own financial model is very different and is less reliant on outside forces, membership groups, player unions and more. This is a good thing.
Let’s look at Supercars first because there’s no doubt that this has come at a shocking time for Australasia’s top category.
In the midst of commencing a new broadcast rights negotiation while at the same time trying to develop the next generation car to slash costs and improve the product, a wholesale stoppage of the sport is obviously not helpful.
Likewise, the lost revenue from TV payments that are unlikely to flow when there’s no TV to be made won’t help the cashflow situation, though Supercars’ efforts to ramp up their E-Sports competitions will help give broadcaster Fox Sports some content to stem the tide for now.
However, I think the biggest problem Supercars will face is that there’s an unbelievably high chance that governmental support for their events will dry up once this is all over.
State and Territory leaders are throwing money at the Corona Crisis which means by the time that this is over their coffers are going to be bone dry and cash for putting on major motorsport events will probably be the first to go.
Tourism will remain important to help kick-start the economy, of course, however there’s going to be a red line drawn plenty of expenditure that is deemed not valuable enough.
Over the years the Supercars business model has been to partner with regional governments to help with the cost of putting on events in their part of the world – with the subsequent TV coverage and economic impact the benefits that help justify the cost.
Through this you’d think that Tasmania, Perth and Darwin should be OK – they are relatively small spends on events at permanent venues that do deliver economic gain to the regions when the circus comes to down.
The New Zealand round would have to have a massive question mark hanging over it given the costs involved there.
But there must be question marks over events in Townsville, Surfers Paradise, Newcastle and Adelaide that are expensive to put on and are always, generally, hot potato politically when people who don’t like them speak up.
The headlines ‘Why are we wasting money on this when we’re broke’ almost write themselves.
Losing these events would be a hammer blow to the championship and would push it into a fundamental change to the way they go about business; rather than chasing government support to put on events, they’ll need to go back to the old model where promoters put on the show and rely on drawing a crowd to fill the coffers.
Certainly, the days of $1m sanctioning fees paid to attract the series to down must be a thing of the past.
Let’s be clear; few of any people actually in the game want those events to go away because they are all generally brilliant – a great showpiece for the sport that does actually benefit everyone by exposing it to a wider audience than before. And I really hope I’m wrong about this all.
But realism is going to be the key in coming months and there needs to be comprehension around how the sport looks in six or twelve months.
It’s not all doom and gloom, however, because it could be the re-set that the championship needs and help slash costs for those involved, too.
A change in focus back to the grass-roots racing fans and permanent venues would be great for the sport as a whole. It will be interesting to see which way it swings.
What about other racing? Well, you’d think the Grand Prix would be safe because getting out of a contract with Formula One would probably be more expensive than putting on the race for the next five years.
At a national level, the Shannons Motorsport Australia Nationals – made up of categories like TCR Australia, S5000 and more – is likely to continue onwards if not with some consolidation.
While there are a lot of professional teams involved there are also a lot of people racing on that program who do so out of their own pockets – pockets that are likely to run dry during this economic shutdown.
And if you’re the head of a business who has had to lay off 50 staff, going back to race your car on the weekend isn’t exactly going to be a great optic for those people in the unemployment line.
So expect some contraction on that side as well.
However, I think the real outcome for motorsport will be decided by how the people in charge approach it.
If they see it as an opportunity to force consolidation, pull costs and resource out of the sport and end up with a product that is more sustainable then we’ll be just fine.
Because Motorsport has survived worse than this, remember. It’s survived World Wars, depressions and economic shutdowns before and has come out the other side each time. It may look different when it does – but the desire of people to compete and of others to watch people race will continue to burn strong no matter what the outcome of the next few months.