Entertainment and Sports Sports & Entertainment Industry Outlook

Entertainment & Sports

Confronting risks and managing crises so the show can go on.

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What to Expect in 2024

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What to Expect in 2024

Demand for in-person events surpassed expectations in 2023, leading to record-breaking ticket sales. But soaring business costs, extreme weather and staffing challenges — not to mention the months-long Writers Guild of America and Screen Actors Guild strikes — could hamper the entertainment and sports industry’s ability to generate revenue. Organizations that can manage an ever-evolving theater of risk will avoid the final curtain and score in 2024.

Explore our key takeaways to protect your profits and drive organizational vitality and resilience...

Emerging threats could hamstring the entertainment and sports industry’s nascent recovery.

Demand for live entertainment and sports has never been greater. The entertainment and sports industry’s rebound from the pandemic surpassed expectations, with revenue for live events expected to reach $68.7 billion in 2024, up from $66.6 billion in 2019. Ticketmaster parent company Live Nation reported revenues of $8.8 billion for the first half of 2023, a 40% increase from the same period in 2022. Sporting events worldwide have fared similarly well, with $29 billion in anticipated ticket sales in 2023, up 6% from 2022. But obstacles to profitability remain. A writers and actors strikes in May 2023 shut down media and entertainment productions from coast-to-coast; economic losses from the strikes surpassed more than $5 billion by September due to production delays and lost revenue.

Changing weather patterns and a greater number of severe storms nationwide are adversely affecting many live events, driving up the cost of cancellation coverage. Rising inflation and increasingly sophisticated staging and equipment are elevating production costs and thinning profit margins. Entertainment companies are forced to pass these costs onto consumers, with average ticket prices costing 14% more than they did pre-COVID. Yet demand remains higher than ever — concert ticket sales are up 45% in 2023 compared with 2019. Although the entertainment and sports industry will face obstacles to profitability, those that develop a thoughtful risk management plan and secure adequate insurance to protect their bottom line will be poised to prosper in 2024.

Vitality

Resiliency

Crisis Management

Resiliency

Profitability

The industry will need an attractive benefits strategy for a unique workforce.

The skilled labor shortage that began before the COVID-19 pandemic has worsened for the entertainment and sports industry. Many workers pivoted away from the industry, leaving a skills deficit that has yet to be replaced. The strike could be equally as detrimental, with ancillary workers such as special effects experts, set designers and production accountants — already in short supply — leaving the industry to make ends meet; many are not expected to return to their entertainment careers. The ongoing shortage has allowed workers to be more selective in choosing their gigs, often demanding several months’ notice before agreeing to take a job. These employment challenges are a significant concern for the industry: More than 90% of entertainment and sports organizations that responded to the HUB International 2024 Outlook Executive Survey say they are at least moderately focused on recruiting and retention. To combat the shortage, entertainment and sports organizations are increasing their focus on employee benefits, from health insurance, financial wellness and retirement options to mental health benefits. With grueling travel schedules and long hours, people in the entertainment and sports industry disproportionately suffer from mental health issues.

Performing arts workers are twice as likely to suffer from depression than the rest of the population. About a third of elite athletes suffer from mental illness, and individuals employed in the arts, design, entertainment and sports business have the third highest rate of suicide compared with other industries. Given the transient nature of the entertainment and sports business, many workers must prepare for interruptions in pay between gigs and self-fund their retirement, making financial education imperative. The industry is responding, with 43% of HUB survey respondents strongly and consistently spotlighting wellbeing in their benefits strategy, and nearly two-thirds saying they are significantly addressing employee financial literacy and wellness issues. Using data analytics can help entertainment and sports organizations provide personalized benefits that deliver quality employee experiences (QEX). By offering benefits that workers need — such as robust mental health benefits — employers can improve wellbeing while supporting recruiting and retention efforts.

Crisis Management

Vitality

Profitability

Companies promoting a culture of safety and risk awareness may be rewearded with better rates.

In addition to these challenges, insurers are demanding additional and more detailed information from policyholders before they agree to write a policy. Carriers will continue to require comprehensive information on evacuation strategies, crowd safety management, security protocols, ongoing training and background check systems. The best way for entertainment and sports organizations to weather this difficult insurance marketplace is to partner with a broker that can provide the risk services support necessary to protect your venue, staff and attendees. Organizations with enhanced risk management plans reviewed by an expert will be best positioned to acquire adequate insurance at the best rates.

Resiliency

Vitality

Profitability

Companies will focus on new technologies to improve crisis response, but shouldn’t forget the basics.

If the past decade has taught the entertainment and sports industry anything, it’s not to ask if a crisis event will occur — but when. Properly preparing for exposures is imperative, and will help organizations not only mitigate losses, but decrease reputational fallout after an incident. Employee training, robust security protocols for crowd management and safety, and an emergency response plan are critical for venue owners, event planners and promoters. These protocols are particularly important for large concerts or sporting events with tens of thousands in attendance. Ensuring proper security and safety can be difficult: Not only are there worker shortages, but the industry has lost untold experience as safety and security professionals left the industry for other work or retired. However, increasingly sophisticated weather modeling and communication strategies are reducing risk. Production companies are investing in global weather forecasting technologies and embracing new methods to better communicate with staff and attendees to quickly evacuate a space if needed.

In fact, nearly 40% of HUB survey respondents said they are using modeling and forecasting to evaluate the potential impact of anticipated risks. Other trends include adopting crowd monitoring systems and apps that can identify issues and communicate to both staff and attendees in real time, and leveraging facial authentication software to enhance security. Venues and production firms are also going back to the basics: Designating a point person empowered to cancel an event or evacuate a facility, and routinely running tabletop exercises to prepare for any exposures that come their way.

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Make a Plan

HUB entertainment and sports insurance, risk management and employee benefits specialists will work with you to develop a tailored strategy that will protect the bottom line, support your workforce and build resiliency for 2024. Here are some initial considerations:

Develop a comprehensive risk plan.

Making risk management the centerpiece of your organization’s culture can help you identify exposures and devise the right response in the case of an incident. Make sure your broker understands how to strategically approach risk and identify gaps in your insurance program.

Create a personalized benefits strategy.

Rely on your partners in a crisis.

Be transparent with your broker.

Rely on your partners in a crisis.

Be transparent with your broker.

Develop a comprehensive risk plan.

Entertainment and sports companies are in the midst of a labor shortage, but those with a benefits strategy based on personalization and fostering a quality employee experience (QEX) will boost engagement, have an advantage in recruiting and retaining talent and lower risk. Work with your broker to identify the needs of your employees to create a personalized benefits strategy.

Create a personalized benefits strategy.

An incident can devastate your organization’s reputation. Use your broker to reduce risks and develop strategies to mitigate exposures. And take advantage of your carrier’s expertise if an event occurs. They may be able to assist with legal counsel, crisis management and digital forensics.

Rely on your partners in a crisis.

Develop a comprehensive risk plan.

Create a personalized benefits strategy.

Be transparent with your broker.

Consistent communication with your broker will help you identify and mitigate issues in advance of your next renewal and position your organization in the best light. Review exposures and insurance needs at least 90 days prior to policy renewal to allow your broker to find the optimal mix of coverage for your organization’s needs.

Be transparent with your broker.

Develop a comprehensive risk plan.

Create a personalized benefits strategy.

Rely on your partners in a crisis.

Entertainment & Sports

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Download our 2024 Entertainment & Sports Outlook and Insurance Market Rate Report to see what to expect in the coming year.

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