Tuesday, 6 July 2021
Focus feature: How East Midlands sports clubs are bouncing back after Covid-19 disruption
From elite football and cricket to shining stars in the smaller worlds of basketball and ice hockey, the East Midlands is a hotbed of sport. But the pandemic has put a huge dent in their finances, with the gradual return of fans only making up a fraction of the shortfall so far, as Dan Robinson reports.
Derbyshire CCC is just one of many sports clubs to have been hit hard by the pandemic
It had been 20 months since the last time they’d had the pleasure but, on Thursday 20 May, Derbyshire County Cricket Club’s fans were back in their seats at the Incora County Ground to watch their team take on Durham.
The weather was most likely similar to the typical English elements the last time they were present – sunshine interspersed with drizzle – and many of the players were the same.
Otherwise, this visit was noticeably different. There were queues into the ground for fans to pass through kiosks that checked temperatures and dispensed hand sanitiser, face masks were a requirement and the attendance was noticeably lower, capped at 850 people due to coronavirus restrictions.
Chairman Ian Morgan OBE says: “It was great to be able to open the ground again and watch a cricket match for so many people.
“But it was noticeable that there were some regulars who didn’t attend because they were still a bit worried about the whole situation.”
For the club, the constraints on admitting fans – less than 25% of the 5,000 capacity due to local regulations – were less than ideal.
It required a threefold increase in the number of stewards and catering staff, alongside a large team of cleaners, while splitting the stadium into six contained zones meant installing more portable toilets and refreshments stands.
“The problem is not only did we have to significantly reduce the capacity, but the cost of reopening is huge and the process of getting people into the ground is very time-consuming,” says Ian.
“Essex CCC was only allowed 250 people and reverted to playing behind closed doors because they were making such a big loss.
“We’re certainly losing more money than we were when matches were played in an empty stadium but we felt we owed it to our members, who haven’t been able to watch any cricket for so long.”
Financial impact of Covid-19 on sports clubs
For clubs like Derbyshire CCC, and countless others in less wealthy sports, the pandemic has had a crippling effect.
The cricket season was due to get underway in March last year but, as Britain went into the first lockdown, it wasn’t until August when play finally started without fans.
Derbyshire was one of the luckier clubs, having loaned its ground for a fee to the England and Wales Cricket Board (ECB) to accommodate touring teams playing England.
And while the ECB also kept up broadcasting payments to county teams – making up the shortfall by agreeing to additional international matches – the lost revenue from tickets, refreshments and hospitality events including a postponed Michael Bublé concert meant the club, which usually turns over £5.5m annually, found itself £2m short.
To survive, contracts for incoming overseas players were deferred, as were VAT payments, and the club was aided by two-thirds of its near-1,000 members agreeing to donate their annual fees rather than ask for the refund they were due.
But while 23 of the club’s 48 off-field staff were placed on furlough, another 19 sadly had to be made redundant.
There had been hopes of a return to half-full stadiums from 21 June as per the Government’s original roadmap out of lockdown, but the four-week delay keeps it at a maximum of 25% for all but a handful of major sporting events like Wimbledon.
Ian adds: “We were fortunate enough to actually beat our budget forecast last year because of the various mitigations we put in place.
“But this year will be the tough one because although opening up again is great, the costs that come with having a limited capacity are huge.
“We ultimately need to be at 100% just to break even, but my guess is we’ll have those zones and kiosks for the whole season.
“We’re now playing the T20 Blast, which is the most popular format of the game, so restricting us to less than 25% for another four weeks means a significant loss of revenue and lots of disappointed fans – some who may never come back.”
Sport brings wider benefits to local economy
While the hit to club finances is obvious – numerous other clubs in the region, ranging from Chesterfield FC and Mansfield Town to Nottingham Panthers and Leicester Riders, have been forced to use furlough and make significant cutbacks – the wider economic impact of effectively banning large public sports events can go under the radar.
When Trent Bridge played host to the ICC Cricket World Cup for five matches over a six-week period in the summer of 2019, analysis by accountancy firm EY suggested it would bring an £18m economic boost to Nottingham.
It reported how three-quarters of the 87,500 people attending matches would travel from at least 25 miles away, and considered the spending both residents and visitors would have on matchday food, drink and merchandise, as well as wider spend in the hospitality, retail and transport sectors.
Trent Bridge Cricket Ground
While that was a one-off global event, a separate study found that Nottingham benefited from a £1m economic boost every time it hosted an international test match.
Even for Nottingham Forest matches, which attract up to 30,000 fans on 23 occasions a year, the figure is around the £100,000 to £200,000 mark each time, predicts David Paton, a professor of industrial economics at Nottingham University Business School.
He says: “We’re talking about pretty big numbers here but it’s not just about the big test matches and football games.
“Nottingham Panthers have a very loyal fanbase of people who might go for a meal and do a bit of shopping before they go to the National Ice Centre.
“The East Midlands is a very sport-intensive region, so when you multiply this across all the clubs we have, you get an idea of just how big a hit our cities and towns are taking as a result of clubs not being allowed to welcome fans.
“It shows just how important getting stadiums open again, and at full capacity, is to businesses.”
The longer restrictions continue, the more likely it will have affect sports participation and interest, believes David, identifying a strong symbiotic relationship between grassroots and professional clubs.
He says playing for local football and cricket teams will spark a child’s interest that may result in becoming a Nottingham Forest season ticket holder or attending T20 matches at Trent Bridge, while watching elite athletes also feeds a desire to participate.
“The past year and a half has been tough on those relationships and will likely have long-term consequences on interest at all levels of sport,” adds David.
“We might find that online experiences and video games have grabbed the attention of more youngsters.
“But from a more optimistic perspective, we’ve seen with the bounceback for hospitality that just as people aren’t going to stop going to pubs, so it’s likely there’ll be a latent demand for live sport and participation.”
Technology helps sports clubs score new income streams during pandemic
The digital transformation of sport has been accelerated by the pandemic – with the potential to bring in new income streams long after it’s over, believes Purpose Media managing director Matt Wheatcroft.
His company, a digital marketing agency based in South Normanton, has helped a range of sports clubs to ensure their websites are equipped to show live broadcasts of matches.
Teams it works with include Derby County, Rotherham Town, Leyton Orient, Alfreton Town, and Derbyshire and Middlesex county cricket clubs.
Matt Wheatcroft and Brandon Fuse at Derby County's Pride Park Stadium
Matt says: “Clubs have lost money through tickets, hospitality, and food and drink sales in the ground, so streaming matches has been a lifeline as the only income generator over the past year and a half.
“Rather than refunding their 18,000 season ticket holders, Derby County can offer this service and others can buy one-off games, which keeps the money coming in.
“There’s a massive opportunity to accelerate digital transformation now in sport as clubs are learning what to do with it.”
Purpose Media has worked with Derby County on its website since 2016, streamlining the ticket booking system to help increase sales by 50%.
After a law preventing 3pm Saturday matches being broadcast was dropped during the pandemic to allow fans to watch their teams, it enabled clubs to upgrade their online streaming capability.
Purpose Media has partnered with specialist providers to deliver fast and efficient services, which can carry advertising and sponsorship.
For clubs like Alfreton Town, which plies its trade in National League North and turns over about half a million pounds, it has been crucial.
Matt says: “Alfreton Town contacted us saying they had no income at all. They probably only get about 500 home fans so they rely on big away followings from the larger clubs in their league to make money.
“So we created a platform with a ticketing gateway that links up to a Vimeo stream to show their games with a couple of fans commentating.
“The away teams can buy access too so they made their money from selling advertising and sponsors for corners, half time and goals, for example – a bit like the American ice hockey model.”
In cricket, investment in websites and video equipment has enabled many clubs to add more camera angles and offer a better online viewing experience – leading to larger audiences and offering new business opportunities for clubs capturing their data.
How many of these innovations will be allowed to remain post-Covid will largely depend on regulations and the flexibility of broadcasting rights.
Prof David Paton says: “When we get these terrible shocks to economic systems, businesses respond by innovating.
“Covid has exacerbated the inequalities that already existed in sports, hitting some of the smaller sports and the smaller clubs within large sports.
“While many people will want to go back to supporting their local teams, there’s scope for some of those things to continue in the long run with a hybrid of physical and digital.”
How Loughborough University is the home of innovative sports start-ups
INCUS Performance founder Chris Ruddock
Wearable technology and data analytics are among the key technology innovations that continue to push sport into the 21st century – with many start-ups within this space based in the East Midlands.
Loughborough University, which has an international reputation for sport education, is home to a thriving ecosystem of sports tech start-ups.
They include INCUS Performance, which has developed a lightweight wearable device for triathletes that captures and analyses high-quality motion and technique data.
Established in 2016, it has been hailed as a rival to GPS behemoth Garmin and double Olympic champion Alistair Brownlee is among the investors.
Founder Chris Ruddock, a former swimmer who came up with the concept to help athletes train better using data while studying product design engineering at Loughborough University, says: “We help everyday people to capture high-quality data that uniquely describes their technique and performance, and crucially, we help them to understand and use the numbers effectively by crunching the numbers for them.
“These clear and ‘actionable’ insights have never been done before in the sports of swimming, running and cycling.”
Chris, who also spent a year studying at Massachusetts Institute of Technology, claims other wearables such as wristwatches can’t capture dynamic insights.
The INCUS technology is worn on an athlete’s back, with the unique position and advanced algorithms it uses said to provide the first direct measurement of their left and right sides from a single device – a particularly useful training tool for swimmers. Running products are also available, with a cycling device to follow soon.
“This allows us to offer a platform that supports the natural inefficiencies and imbalances of athletes,” adds Chris, who now has a team of 13 people based at the Loughborough University Science and Enterprise Park (LUSEP).
Another LUSEP start-up is Tzuka, which has designed the “world’s most durable” sports earbuds.
Tzuka founder Tom Jelliffe
It was founded by geography and management graduate Tom Jelliffe after he and a gym buddy broke nine pairs of earbuds in a year.
His design is specifically engineered for anaerobic sports – including underwater – and has a world-first impact resistance certification while the built-in MP3 player can store more than 60 hours of music playback to enable mobile phone-free workouts.
“We quickly realised that regardless of whether you spend £10 or £200, similar cheap plastic and assembly methods are used, resulting in earbuds with a really poor build quality,” says Tom.
“We have totally revolutionised the assembly process behind earbuds – no other earbuds in the world are manufactured this way. Tzuka’s earbuds are designed to be as tough as whatever your workout.”
Tzuka, which is based in LU Inc, the university’s business incubator supporting graduate start-ups, has secured two substantial investment rounds and employs two people. It is hoping to begin selling products within the coming months.
Start-up support at Loughborough University
Loughborough University has developed a formidable ecosystem for sports innovation, being home to the largest concentration of world-class facilities and support across a range of sports.
Its infrastructure includes the Sports Technology Institute – one of the globe’s top research groups of its kind, partnering on innovation with brands such as adidas, Nike and Umbro – and the Loughborough University London postgraduate campus at the Queen Elizabeth Olympic Park, which is home to the Institute for Sport Business.
Pete Hitchings, from Loughborough University
The LUSEP hosts SportPark – comprising 19 national governing bodies and sports organisations including UK Athletics, England and Wales Cricket Board and UK Anti-Doping – and the LU Inc business incubator for supporting innovative early-stage companies originating from both inside and outside the university.
Across the 53-hectare site are more than 90 companies, employing in excess of 2,500 people.
The university’s incubator manager Pete Hitchings says: “We have lots of different elements of support for sports innovation businesses across the spectrum.
“Early-stage start-ups could take interns or their first hires from our talent pool and then the support might progress to help with R&D, or a knowledge transfer partnership could unlock more opportunities for innovation.
“We’re trying to create a seamless journey for a business to develop with us through collaboration and show there’s no better place in the world to be a sports innovation business.”
This article features in the July/August edition of Business Network magazine. Read the online edition here.Back