Covid-19 had the unfortunate effect of temporarily shutting down all stadium facilities across the United States, which resulted in most concerts and sporting events being either canceled or postponed until the end of this year at the very least. Most facilities are in Phase Three of the federal guidelines for reopening the US economy, meaning the live entertainment industry is currently in the process of planning out what the operation of large venues under “limited” social distancing protocols would look like. The industry is evaluating a variety of different factors to keep businesses running, perhaps not as usual, but running at the very least.

Sanitized version

Over the summer it is likely we will see sporting events being played without fans, whereas concert tours could potentially restart in the first quarter of 2021. The success of putting on future events will depend on the restrictions with respect to social distancing which is likely to take place in phases. Once the government permits the reopening of stadiums, several safety elements will need to be installed in order to reassure the public that it will be safe to return to the building. It is unrealistic, however, that these safety aspects will simply revolve around social distancing as this is infeasible due to the design of the stadiums. The industry will need to identify safety products that will continue to work, not only when the building is empty, but while the building is open, and people are entering and exiting. The installment of a number of technical measures for sanitizing the stadium will have to take place including UV light technology and foggers or sprayers for the release of disinfectants. A heavy investment into equipment to monitor people’s temperature as they are entering the stadium will also be needed, which will involve numerous devices to test both the attendees and the employees. Indeed, all workers will have to go through rigorous processes in terms of health testing before they can enter the building.

These additional sanitization costs will have a knock-on economic effect. Everyone involved in the value chain, from the owners of the building to the promoters and performers themselves, will need to take a cut in terms of earnings. Yet because the arenas will generally need content, there is a strong driver for stadiums to incentivize promoters, who will, in turn, make guarantees to performers. Performers, on the other hand, may have to accept less either in the amount of the guarantees or increase the price of tickets. Ultimately, for concerts to go ahead, more money will have to be spent on marketing, scheduling will have to be restricted in order to not saturate the market, and sensitivity to ticket pricing will need to occur. Regardless, it is expected that concerts will once again go ahead because managers and agents will be pressuring artists to go back out and make money, as well as the fact that the younger demographic seems keener on attending events due to less apprehension about catching the virus.

Bouncing back

Because facilities are usually owned by municipalities or state governments, they are typically treated as economic generators for the rest of the local economy; scores of restaurants, shops, parking lot owners, and property owners are dependent on them. Post-9/11, people were worried about the industry’s ability to bounce back – but it did. Experts are optimistic that the same will happen in this case, though it may take some time. Whilst the development of a vaccine will obviously help towards people getting over the stigma of the risk of getting sick by being in a crowd, it is expected that people’s attitude will also change simply due to the prominence that sporting events and concerts hold in our perception of overall quality of life.

This call was hosted on April 30, 2020, under the title: “(MSGE) Sports & Live Entertainment Discussion with Arena Manager.”

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