Share Prices & Company Research


03 March 2021

Roadmap Raises Curtain for Sports and Culture

Over a week after the UK Government announced its roadmap for relaxing England’s lockdown for good, the dust has settled and the 2021 Budget is being unveiled.

As expected, the roadmap allowed the public to look ahead and make plans for what Health Secretary Matt Hancock had previously hoped would be a “happy and free Great British summer.”

The roadmap announcement had the potential to inspire optimism or lay down yet more hard-hitting truths but, if all goes to plan and the vaccine rollout continues as expected, all restrictions are set to be lifted by 21st June, allowing life to return to some form of normal.

Despite the government’s confidence, this is a public health crisis unlike anything the world has ever seen before and, with the global impact it has had, there will be doubt around if people are willing to return to their normal lives as if nothing has happened.

Some of the industries hit the hardest by the pandemic are the entertainment, arts and sports sectors. In 2019, the UK’s live music industry was worth £1.3bn, so the effects of the pandemic were felt particularly hard in 2020. In that year, more than 90% of planned concerts were cancelled, leaving artists, production staff and venues out of pocket, and fans without entertainment. The inability to enforce social distancing at most gigs and concerts has made the sector’s future particularly unclear, however, the appetite for live music remains.

Reading and Leeds Festival, Boomtown Fair and Manchester’s Parklife Festival have all stated their intentions to go ahead, with the latter moving from June to September to give itself the best possible chance. After 2020’s festival circuit was decimated by the pandemic, 2021 has already seen record demand.

Two days after the roadmap was unveiled, Reading and Leeds Festival stated via social media that it will go ahead as planned over August Bank Holiday weekend. Less than 36 hours later, the festival announced it had sold out 250,000 tickets across both locations. In 2019, Reading Festival didn’t sell out until 19th July, while Leeds Festival didn’t sell out at all.

The roadmap also details the government’s plans for indoor venues such as theatres, concert halls and sports arenas. On 17th May at the earliest, indoor entertainment such as museums and theatres can reopen at a maximum capacity of 1,000, while outdoor performances can take place in front of a maximum of 4,000 spectators.

This will come as a boost an industry which relies on the relaxation of social distancing rules. Around 55,000 performing arts jobs were lost between March and December 2020, while over half of the industry’s workforce has been furloughed – a higher percentage than any other sector.

Any fears that punters would be sceptical about returning to large venues like theatres have been emphatically allayed, and the same can be said for sporting events. The UK Government, the Football Association, the Premier League and the English Football League have all long-since advocated the return of fans to stadia to watch live football in person, with bodies in many other sports following suit.

Although sports clubs located in tier one and two areas were allowed to welcome fans back into their grounds towards the end of 2020, the UK’s third lockdown swiftly curtailed this easing of restrictions.

The roadmap has given clubs, many of which feared they could have gone out of business when fans were first barred from attending, fresh hope and the promise of kickstarting their cash flows. Under the roadmap, fans may be able to attend live sporting fixtures no earlier than 17th May, but before the current Premier League season ends on 23rd May.

Appetite for spectators to return to stadia this season has never been lost from any of the stakeholders involved, and with the Premier League understood to be keen on moving more fixtures back to take place after 17th May, it might not be unrealistic either.

There will undoubtedly be concerns surrounding public health and the potential resurgence of COVID-19 for months, if not years, to come. But with the vaccine rollout providing hope, the UK’s world-renowned culture sector could soon return to centre stage.

We expect the impact to stocks to be swift if demand is as expected. All eyes will be on those firms which provide ancillary services for sporting and cultural events, some of which, such as Compass Group – the catering business - are making headway in a return to previous valuation levels. At the same time, investors will look to for new opportunities that can address the challenges of social distancing and a reduced capacity, such as Accesso the virtual queuing app.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
Roadmap Raises Curtain for Sports and Culture
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