With COVID-19 disrupting major global sporting events, a ‘pandemic insurance’ may have helped Wimbledon prepare better for the coronavirus outbreak than most others.
Following the COVID-19 pandemic, the sporting world has grounded to a halt. A number of global sporting events have been cancelled or postponed due to the pandemic. The postponement of the Tokyo Olympic Games 2020 came in as a big shock for the fans. If this wasn’t enough, the cancellation of 2020 edition of Wimbledon – first time since the second World War – made the fans bewildered. However, owing to an extensive insurance policy that guards it against any pandemic, Wimbledon may have been better prepared for COVID-19 than most others.
Highlights! Was Wimbledon well prepared to tackle the COVID-19 pandemic?
- A ‘pandemic insurance’ helps Wimbledon deal with its 2020 event cancellation due to COVID-19.
- Most of the sporting organizations are currently relying on “force majeure” clause.
- Wimbledon’s decision offers a learning lesson for other sporting organizations.
- Has COVID-19 now put French Open and the US Open in danger?
Wimbledon’s ‘pandemic insurance’ comes handy
Wimbledon had reportedly been paying $2 million a year since last 17 years. This investment was a part of something called as ‘pandemic insurance’. Hence, with the COVID-19 crisis affecting the world, the annual tennis championship has been cancelled altogether.
In a situation when most of the sporting events are getting rescheduled, the cancellation of Wimbledon was possible only because of its pandemic insurance. According to Darren Rovell, a sports business reporter with Action Network, for this year’s cancellation due to the coronavirus pandemic, Wimbledon will be receiving $141 from this policy.
So, it’s quite evident that Wimbledon had a clear plan for COVID-19. Rather they had a backup plan for some kind of catastrophic emergency that would force the world’s most prestigious tennis tournament into cancellation.
It’s Advantage Wimbledon
The All-England Lawn Tennis Club (AELTC), a private club that provides venue for the Wimbledon championships, mentioned about the insurance policy while announcing the entire cancellation of the event last week. The decision was quite well timed given that the organization would be receiving a decent payout to recover the losses for doing so.
So, with an impressive return of $141 million for $34 million invested in last 17 years, it’s certainly Advantage Wimbledon.
The AELTC’s Risk and Finance sub-committee have insisted Wimbledon on having such an insurance policy for the last few years. With the tournament generating revenue through sponsorships, ticket sales and broadcasting rights, the long-standing decision by Wimbledon looks set to pay dividends now. The refunds for sold tickets and television rights will be easily covered under this policy.
Other sporting organizations relying on “force majeure”
Besides Wimbledon, the Royal and Ancient Golf Club at St. Andrews is another sporting organization that has a pandemic clause in the contract. Such a clause includes coverage on the death of Queen, terrorist attacks, floods or hurricanes, or in case a global crisis leads to suspension of all sporting events; such as the CVOID-19 case currently.
While these leading British sports organizations are covered under such a clause, most of the sports organizations are not on the same boat. According to Darren Rovell, most of these organizations rely on something called “force majeure”, a French term for “superior force”.
Such a clause covers organizations in the event of an unexpected act of God or nature – pandemics are often neglected since they aren’t common. Hence, everyone having such a clause may not necessarily benefit.
Is French Open 2020 also in danger?
With Wimbledon 2020 getting cancelled, the chances of Novak Djokovic and Simona Halep defending their singles titles have all but crashed. But will Rafael Nadal and Ashleigh Barty be able to defend their French Open titles?
French Open, another prestigious tennis tournament, has unexpectedly shifted its start date from May to late September. The decision comes as a precaution against the pandemic. However, it hasn’t been well received by the fans and players.
Explaining the shift in dates, Lionel Maltese, finance chief of French Tennis Federation, has said that a failure in conducting the event will be a ‘catastrophe’ for the grass root game it supports and cause of loss of 260 million Euros to the organizers.
A lesson for other sporting organizations
The ‘pandemic insurance’ adopted by Wimbledon is an eye-opener for other major sporting organizations across the world. If something less likely to occur has an ever-lasting impact, it just can’t be neglected. It’s a lesson for French Open and the US Open to be held later this year.
Now with the actual financial consequences of such an event being clear, the risk for organizations not to opt for an insurance would just be too great.