10 March 2020

Impact of coronavirus on sports


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“Will coronavirus cancel the Tokyo 2020 Olympics?”

“Games On? Or Games Over?
It would be one of the biggest sports news stories ever.
The postponement – or cancellation – of the world’s greatest sporting mega-event because of coronavirus would be unprecedented in peacetime.

- These were the headlines on an article by Dan Roan, a BBC sports editor, published on 6 March 2020.

Indeed, this is the big question for all sports enthusiasts and stakeholders.

The sudden and widespread outbreak of the Coronavirus Disease 2019 (COVID-19”) has not only caused grave concerns over public health worldwide but it has also significantly impacted businesses and our way of life, including sports.

Apart from the 2020 Olympics in Tokyo, scheduled to take place from 24 July to 9 August 2020, many other major sports events are also under threat.

Football

Italy, which is worst hit by the outbreak in Europe with the highest number of deaths, has had its Serie A football matches suspended until at least 3 April, the country’s prime minister Giuseppe Conte has declared. The Italian league is scrambling to manage the fixture chaos.

Several Danish league players have been quarantined, after meeting with former Denmark international player Thomas Kahlenberg who has been diagnosed with coronavirus.

Football in Asia, especially in China, South Korea and Japan, has been massively disrupted.

Rugby

The 2020 Six Nations Championship is also under threat. The final two rounds have been disrupted and rugby officials are considering alternatives.

Motor Racing

Motor Grand Prix in Qatar and Thailand have been postponed.

As for Formula One, the Shanghai Grand Prix on 19 April 2020 has already been postponed. There is uncertainty over the season-opening race in Australia on 15 March 2020 even while F1 organisers insist Australian Grand Prix will go ahead as planned.

Cycling

Cycling has not been spared either. The final two stages of the UAE Tour have been cancelled after two Italian staff members of one of the cycling teams tested positive for the coronavirus.

All riders, including Chris Froome, the four-time Tour de France champion, and Adam Yates, race leader of the UAE Tour, have been placed under lockdown at their hotel and were tested.

Impact

Many other sports globally are unable to escape the impact of the Covid-19.

The indecision over the Olympic Games is understandable considering how much is at stake. Hundreds of thousands of spectators, athletes and officials are expected to converge on Japan for the Games. Like many of the major sports events under threat, a disruption of any degree will affect:

  • Thousands of athletes who have spent years training for the 2020 Games, which may for many be their last or only chance at the Olympics.
  • Hundreds of thousands of spectators who have booked tickets, transport and hotels for the Games.
  • Japan, the host country and organiser, which has over the past seven years, spent approximately £10 billion on infrastructure and preparation for the Games, risks to lose billions in ticket sales and tourism revenue.
  • Broadcasters, advertisers, sponsors, hotels and stakeholders stand to lose millions in fees and revenue. American broadcaster NBC Sports has announced that it has sold more than US$1.25 billion (£970 million/€1.1 billion) of national advertising space for Tokyo 2020, which is an Olympic record.

Plan B?

Is there an alternative plan? Apparently not for the Olympic Games, and there are currently no plans to postpone the Games or move them to another location.

In the case of other sporting events, various options are available:

  • Postponing the event to a later date;
  • Changing the event to a less susceptible location;
  • following the example of Italian football by having the sports played out in empty stadiums, and broadcast live.

With plan B, early planning and variation of contractual obligations, losses can be mitigated.

Any way out?

If there is no plan B, is there a way out?

In the Host City Contract 2020 entered between The City of Tokyo and The International Olympic Committee (IOC) on 7 September 2013, IOC is entitled to terminate the Contract and to withdraw the Games from Tokyo under various scenarios including the following:

  • if Japan is in a state of war, civil disorder, boycott, embargo decreed by the international community or in a situation officially recognised as one of belligerence or if the IOC has reasonable grounds to believe, in its sole discretion that the safety of participants in the Games would be seriously threatened or jeopardised for any reason whatsoever;
  • if the Tokyo Games are not held during the year 2020;

Further, if IOC should withdraw the Games for any reason, Japan is not entitled to any form of indemnity, damages or other compensation or remedy of any kind, and instead, Japan has to indemnify IOC.

For the athletes who qualified for the Olympics, while their dreams and hopes may be dashed, their finances would usually be covered by their respective country and local Olympic committee. For the participants of all the other sporting events, whether they have a way out will depend on their contracts with the event organizer. Are contingencies, force majeure, postponement or termination provided for?

For the spectators who have paid for tickets, hotels, transport, they have to examine their contract with each of the service providers. Did they buy their tickets from official sellers or authorised dealers? If the event is cancelled by the organizers, the ticket price would be refundable. Whether hotels, flights, trains service providers will issue refunds will depend on their terms and conditions.

For the broadcasters, advertisers, sponsors, hotels and all other stakeholders, they should be reviewing the terms and conditions of their contracting arrangements, and looking to see if and how their insurance coverage may be activated.

With these uncertainties, it is prudent to review all contractual arrangements for options of Plan B or a way out, and protect all your interests.

Click here to read more insights on how we can weather the coronavirus outbreak with you.

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