In the large-scale absence of professional sport, fans have been reduced to watching governing bodies fight it out for the title of the most high-profile tournament cancellation. The Euros, Monaco Grand Prix, The Tour de France and the Augusta Masters are among a list of events being postponed or cancelled.
While fans are deprived of sporting action organisers are deprived of several revenue streams. Ticket sales, broadcast fees and sponsorship are taking a hit across the sporting balance sheets.
Formula One’s owners, Liberty Media, are investigating the logistics of running 8 double race weekends back to back in the final quarter of 2020. Other event organisers have postponed until next year and will take a hit on the loss of income.
Wimbledon, the annual summer grass court tennis tournament was a relatively late cancellation. Fans will miss the strawberries and cream, but the annulment would allow the AELTC to trigger an insurance clause which the club purchased in 2003 where following on from the SARS outbreak pandemic insurance was included in the annual premium. Over the last 17 years the club paid out a total of €40 million for the additional cover, it’s not a small fee however Wimbledon can now expect to receive a pay out rumoured to be around €140 million for the tournament not going ahead in 2020.
How far that claim would go to cover lost revenue is unlikely to be reported but estimates indicate that the loss of income across the main streams of sponsorship, tv broadcasts and ticket sales would be around €330 million. €35 million in prize money would be saved together with expenses and sundries. Crunching these numbers indicates that around 50% -55% of the lost revenue would be provided for via the lump sum.
With the benefit of hindsight that now looks to be a wise purchase. Other governing bodies and tournament organisers who did not have the foresight to include pandemic coverage will not benefit from insurance pay outs and may be in some financial trouble. At least with no sport to govern they will have the time to go compare.