Our industry, like many, has been severely impacted by Covid-19. And like those other industries, the tail of the virus will stretch long after fans are returning to stands and kids are back running around parks on a Saturday morning. This is not a 2020 issue for our sector. Sponsorship, broadcast rights, corporate hospitality, betting revenues, trust funding and affiliation fees are all going to be significantly impacted as we as a nation navigate back to a thriving economy.
The virus has highlighted the flaws that have existed for some time within the sports sector. Simply put, we didn't have a sustainable model going in to Covid-19. That model was turned upside down during this time, and if we don't 'pivot', no government relief package will change the fact it remains a fundamentally flawed and volatile business model coming out of Covid-19. It is broken.
As a sector, we are reliant on incredibly delicate revenue streams, most of which are outside of our ability to control. In researching 20 New Zealand Sports Organisations' annual reports, the figures show consistent revenue streams – sponsorship, betting revenue, government funding and trust funding making up the bulk of revenues.
Alarmingly however, some NSOs have as high as 70 per cent of their revenue coming from High Performance Sport funding. What happens if they don't achieve their goals at the Tokyo Olympic Games, should it take place next year? Likewise, other sports rely on TAB revenues to the tune of 75 per cent of their annual revenues - that's three-quarters of an organisation's revenue being reliant on betting on their sport.
It is worrying.
This is before we even tackle trust funding.
How can any sport truly invest and make long-term plans when these sources of income are so at risk?
We need to take the opportunity Covid-19 has given us to change how we deliver sport in this country. The sport relief package provided to the sector needs to set up a better future for our industry – a commercially sustainable, thriving industry with diverse revenue streams delivering value and opportunity to those participating, at any degree.
We have too many clubs. Too many facilities. Too many layers of governance. And we make excuses. How many times have you heard "people aren't spending money on sport like they used to"? Ask your local F45 or CrossFit franchise if they share this view (not that I have been in one!). Have a wander through the bike racks at any triathlon or IronMan event and see if you still think people aren't spending money on sport. We're spending more than ever before, just not in the traditional way most of us are delivering it.
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I want to see a scenario where five of the 15 things I spend time and money on over the weekend are at my local club. My avocado on toast, gym, daughter's swimming lessons, catching up with friends, doing my hobbies, heck I can even pop up to the business centre and do some emails or write a story no one asked me to write. In the post-Covid work-from-anywhere world, how can my shared office space though the week even be at my local club when it is not in demand for the sports core duties?
What would you be willing to pay if all of this came from one place? How many more members could you attract with a more diverse offering? How much does your appeal to sponsors increase? Your buying power to suppliers to generate greater yield. It becomes self-fulfilling.
Then there is the trust funding. No less than $2.6b was spent on gambling in 2019 with over $300m being distributed to community groups - sport being the main benefactor. How were those funds distributed? What was the industry wide, cohesive strategy that worked towards a direction for the use of this money? What could have been achieved if all the money that flowed through a sport was aligned and managed centrally to ensure it was spent in the areas needed?
From looking at figures published from the Gaming Machine Association; 28,000 grants were delivered to 11,000 organisations in 2018 just from gaming machine revenues. How much better would the places we play, the programmes we participate in, the education for our young or opportunities for our talented be had this been streamlined via a centrally managed, less-is-more approach?
As an industry we need to acknowledge the model is broken. We need stop making excuses, cut through the bureaucracy and bin the phrase "this is how it has always been done".
There will be resistance, of course. Which club, region or on some cases even NSO, want to volunteer to dissolve? However, it is desperately needed. If it is not Covid-19 that leaves clubs, regions and/or sports in a terminal position, it will be restrictions to gambling, legislation to deny alcohol sponsorship or a bad day on the track at one or two events.
Never has the power of community been more valuable or sorely missed as it is right now. There are some very talented and passionate people working in this industry. But it is time to change.
• Karl Budge is an internationally renowned sports administrator who has worked with FIFA, Australian Open and the WTA Tour internationally as well as the ASB Classic, NZ Rugby and the Piha Pro in New Zealand