Coronavirus has caused the sports industry to implode – and the knock-on effects could be much worse for us all

Editorial: At a time when the world is edging into recession and stock markets have been so volatile, this pandemic could create a wholly new area of financial damage

Not so long ago, 2020 was shaping up to be a vintage summer of sport. Apart from the usual annual delights, there would be the Tokyo Olympics, and the Uefa European Championship. Even a few days ago, the Premier League was insisting that this weekend’s fixtures would be played as usual and consistent with official advice.

Now, after a few disturbing cases of flu-like symptoms among staff and players, all professional football across the UK is off until at least April. Most of Europe has also abandoned the beautiful game. The same goes for much of rugby, motor racing, cricket, tennis, the NBA and golf, with major tournaments being scrubbed from the calendars. It seems only a matter of time before the Olympics and the 2020 Euros will have to be moved. Not since the Second World War has there been such a sudden and complete moratorium imposed on the world of sport.

Coronavirus has removed one of the very distractions that might have taken people’s minds off the pandemic. The sudden implosion of the sporting world throws up some difficult questions for its governing bodies, but also some potentially lethal ones for governments.

“Voiding” league completions would be especially harsh, though some sides facing relegation would be relieved. Would the Premier League, for example, simply award the title to Liverpool FC, even though it has a couple of games left to formally win it? Should the RFU carry over Saracens’ penalty points into a new season? A better solution for football might be to cancel next year’s cup tournaments to create the space to fulfil all the league fixtures, though even that might be impossible if the crisis goes on into 2021. And what will Sky, BT Sport and BBC Radio 5 Live broadcast in their hollowed-out schedules?

The cancellation of matches will hit gate receipts and the other income of smaller clubs and horse racing circuits especially hard. Given that this is a temporary phenomenon, there should be some mechanism for their richer brethren and for governments to support them through this extraordinary episode. If we want to foster local pride and promote the poorer, “left behind” parts of the country, then shuttering the cricket ground, rugby league or football club stadiums is an unhelpful place to start (and electoral poison).

But the cancellation or postponement of the largest tournaments will also inevitably mean financial losses for the bigger players in the game. If these events are were insured for such a risk, then they will be passed through the insurance industry in the usual way. Except these are not usual losses; they will surely place a huge burden on insurance companies and underwriters, with so many large global events being abandoned simultaneously. At a time when the world is edging into recession and stock markets have been so volatile, this could create a wholly new area of financial damage from the coronavirus pandemic.

As we saw in the 2008 financial crash and subsequent crises in the eurozone, financial contagion too can spread quickly and unpredictably across borders and different kinds of institutions, such as banks and insurers, and go on to jeopardise the solvency of nation states who try to bail them out.

Sport today is big business, and can generate vast revenues and, sometimes, vast profits from the vast entertainment it provides. It is intimately linked to the travel, gambling, media and financial sectors. We know now that it will, in 2020, generate vast losses, and that they will have to be covered, at least temporarily, by someone, somewhere. If not, then the metaphorical carnage will be greater than anything seen on any pitch, and there will be far fewer teams for anyone to support by this time next year.