Big brands miss live sports events as much as you do

Sports — in all their high-contact, sweat-swapping glory — have not been taking place normally during the pandemic. It's true if you're Tom Brady hoisting a Super Bowl trophy overhead in a partly empty stadium. But it's also true for the rest of us.

The disruption at all levels of athletics — professional, collegiate, youth and even recreational — has affected a wide range of big-name consumer brands, from clothing makers to sporting-goods sellers, packaged-food giants and restaurants. It's a reminder that even secondary and tertiary effects of the pandemic can put a serious wrinkle in a company's game plan.  

Dick's Sporting Goods Inc. is a prime example. Even though the retailer managed to have a gangbusters 2020 as people lived in sweatpants and spent more leisure time outdoors, executives said the pullback on sales of items connected to team sports was a "huge headwind." Similarly, Under Armour Inc. said this month that revenue declines in the latest quarter at its apparel and footwear divisions reflected weakness in team-sports products. 

Fan attire, too, has been tougher to sell when games can't be enjoyed from the bleachers. Hanesbrands Inc. said last week that sales of its Champion brand apparel were up 11% from a year earlier in the latest quarter but that growth would have been stronger if not for drag from weak sales of licensed, logo-stamped gear such as the kind sold in college bookstores.

The fan economy extends beyond outfitting for the big game. Darden Restaurants Inc.'s Yard House chain, which serves burgers, onion ring towers and other bar fare, often has locations near sports stadiums. The one that is typically the best-performing outpost — near the arena in Los Angeles where the Lakers play — has been "decimated," CEO Gene Lee said in September. Then there are all the packaged-food companies that provide the burgers and sodas at stadium concession stands. Beyond Meat Inc., for one, has noted that the plunge in sales at its food-service segment is not just because of low traffic at restaurants but also at venues such as sports arenas. The weird sports season has even altered snacking habits: Sean Connolly, CEO of Conagra Brands Inc., said over the summer its edible-seeds business had suffered because "baseball and seeds go hand in hand."  

Consumer companies also plan advertising campaigns around sporting events, and that usually predictable schedule unraveled in 2020.  The postponement of the Tokyo Olympics was the most prominent example, depriving brands such as Nike Inc. of an important global showcase for their products. But even less dramatic scheduling changes create strategic hiccups. Molson Coors Beverage Co. said last week that its latest quarter included lower marketing spending tied to sports, in part because of the delayed start of the National Hockey League season.  

As we've learned how to manage the virus better and vaccines have started rolling out, there's hope that things can inch back to normal. For those that largely depend on professional sports, it's good news that the National Football League's widely praised contact tracing and other safety measures offer a model for other leagues to have seasons with fewer cancellations and interruptions. But the business of feeding and outfitting fans will likely take longer to come back. Major League Baseball said in February, for example, that having crowds at regular-season games in 2021 is going to be "an evolving process" that might vary based on local rules. 

There is even greater uncertainty for the businesses that rely on student and amateur athletes. The return of kids' sports will be closely tied to school reopenings, which are likely to proceed at widely varying paces by state and municipality. And while the pros will get reassurance from an expensive program of rigorous safety protocols, local athletes often will not, leaving many parents reticent to have their kids quickly return to game play. (Not to mention, of course, Covid-19 vaccines are not yet approved for children.)

There is even greater uncertainty for the businesses that rely on student and amateur athletes. The return of kids' sports will be closely tied to school reopenings, which are likely to proceed at widely varying paces by state and municipality. And while the pros will get reassurance from an expensive program of rigorous safety protocols, local athletes often will not, leaving many parents reticent to have their kids quickly return to game play. (Not to mention, of course, Covid-19 vaccines are not yet approved for children.)

Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.

Disclaimer: This article first appeared on bloomberg.com, and is published by special syndication arrangement.