Industry Reopening: Sports and Entertainment

The sports and entertainment industry, which includes live music events, movies, theatrical productions, amusement parks, and trade shows, rely on an aspect of public life that is not conducive to pandemics: large crowds packed into confined spaces. As a result, major events such as the National Basketball Association, the Major Baseball League, live music shows, major festivals such as Coachella and Burning Man, have been postponed. 

Due to social distancing requirements, movie theatres, theatrical productions, and amusement parks have shut their doors to patrons. And while states are in the process of slowly opening up, these businesses are arguably at most risk of having prolonged closures.

A compound problem for these industries is the financial and job loss consumers are experiencing from COVID. The latest unemployment filing figures reveal 30 million Americans have applied for assistance due to job losses from COVID. Consumers and patrons now more than ever will be reluctant to spend money on the leisure activities that sports and entertainment provide.

Major ticketing companies are experiencing high volumes of refund requests as patrons who are experiencing hardship or trying to be more conservative with cash try and recuperate money spent on future events.

The only segment of the entertainment industry benefiting from the pandemic as more people stay indoors is video streaming, such as Netflix and Hulu, music streaming services like Spotify, and video/computer gaming.

Steps to Reopening

In a daily coronavirus briefing, President Donald Trump promised that sporting events would return gradually, first in a made-for-TV format that does not have live spectators. It will progressively move to spacing out spectators in arenas and venues, before returning to full capacity once the virus has gone.

The White House has recommended a three-phase approach: entertainment venues that do open are required to stick to social distancing requirements, making sure patrons space out accordingly (6ft.). Like most parts of the economy, the decision to reopen has been largely left to individual states.

Local movie theatres in states with more aggressive reopening policies such as Georgia and Texas are opening again, but only filling up a quarter of capacity due to social distancing requirements. In a bid to start returning to normalcy, movie theatres are showing slightly older films at discounted prices, but this essentially means they are operating at a loss due to capacity restrictions. The big three theatre companies AMC Theatres, Regal Cinemas, and Cinemark do not have plans to reopen until June or July.

Major sporting leagues are in talks to play games in one city to reduce need for travel as well as scaling up player and associated person testing, while sporting events occurring in the later months of the year such as the NFL and the U.S. Open are still to occur as scheduled.

Concerns about Reopening

As sports and entertainment relies on the gathering of large crowds, reopening depends heavily on whether there are no additional outbreaks and our ability to implement widespread testing, and contact tracing. As such, Dr Anthony Fauci has said that sporting events may not return this year. A similar trend is being seen with live concerts and musical festivals which are held annually. any of these events have been pushed out to 2021.

While entertainment venues attempt to creep back into business, a major concern is that social distancing requirements will force many of these venues to operate at losses due to limiting capacity. Huge investments may be needed for adequate cleaning equipment to make the venues safer, and with the coming summer months where constant cooling is needed, local entertainment venues may stay closed until it is viable to reopen fully.

New content from Hollywood is also being postponed until blockbuster movies can play in major cities (where lockdown could be longer than other parts of the country) which limits the revenue movie theatres can get as they rely on slightly older content.

Potential Assistance

Sports and entertainment has not been prioritized in relief efforts or funding as both are not necessarily seen as “essential businesses”. There is no industry-specific bailout coming from Congress, especially as legislators look to avoid what can be seen as bailouts for specific corporations.

Displaced entertainment industry workers have been assisted through the CARES Act and unemployment benefits like many other Americans who are now out of work. Local theatres and smaller entertainment centers have been encouraged to apply seek help from the Small Business Administration for loans.



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