D.C. Sports Venues Face Slow Recovery From ‘Devastating’ Year
While Washington's professional sports teams have resumed play during the coronavirus pandemic, their venues have yet to welcome back the crowds of fans that support the surrounding businesses.
Three leaders in D.C.'s sports and business communities — Events D.C. CEO Gregory O'Dell, Washington Kastles owner Mark Ein and Greater Washington Partnership founder Russ Ramsey — spoke last week on Bisnow's State of D.C. Sports, Entertainment and Esports webinar about the impact this has had on the region's economy, and how they expect the recovery to look.
Because of the risks associated with large crowds, they said they expect it will be at least another full year before venues can get back to full capacity.
While the recovery of D.C.'s sports and entertainment industry will be slow, it will be aided by multiple emerging opportunities that the leaders identified: sports gambling, esports and the 2026 World Cup.
Events D.C. owns and operates several venues, including Nationals Park, RFK Stadium, the Entertainment and Sports Arena at St. Elizabeths East and the Walter E. Washington Convention Center, and O'Dell said he has seen firsthand the pain that sports and events venues are experiencing.
"This has been completely devastating for all of us in the space, in any size venue, but certainly for the larger venues and arenas," O'Dell said. "It's just been devastating because we were the first to close due to the risk of community spread, and we'll probably be the last to open."
Ein owns the Kastles tennis team, leads the D.C-based Citi Open tennis tournament and owns the Washington Justice esports team. He said he sees the coming year not as an on-off switch but as a volume control dial, with venues gradually welcoming back more visitors over time. Even with the news of effective vaccines, he doesn't think sports venues will be able to reach full capacity next year.
"I wouldn't expect the volume to be at 10, if 10 is the max, in 2021 at all," Ein said. "I think 2021 will be a transition year, and hopefully we're at the point in 2022 where you can fill stadiums."
Ein said the most vulnerable businesses are the bars and restaurants that depend on sports and concert traffic in the neighborhoods around Capital One Arena, Nationals Park, Audi Field and The Anthem.
"We have to recognize that's where the real risk is in this recovery," Ein said. "Policymakers need to make sure they help us get these local restaurants and retailers through this time, so they'll be around when sports and entertainment comes back and re-creates the vibrant communities they had catalyzed."
O'Dell said the businesses around the convention center have also suffered. He said the restaurants around D.C.'s large venues derive about half of their revenues from event traffic. He said the pandemic has created over $100M in lost sales for these businesses, and it will take time before that demand fully returns.
"It's going to be quite some time before we see all the attendees coming back for large-scale events, whether for conventions and meetings or sports and entertainment," O'Dell said.
The announcements of effective vaccines have created a positive outlook for next year's economic recovery, but Ramsey said that the recent spike in COVID-19 cases has created more risk for public gatherings in the coming months. He said improving testing will be an important factor in helping bridge the gap until a vaccine can be widely distributed.
"I'm very confident that the cavalry is here and we're going to get the vaccines in the hands of the right people, but over the next three to four months, it's really important for everyone to be cautious," Ramsey said. "I do believe there will be a call to action in the next few weeks about rapidly increasing testing for all. It should be frequent, fast, free and available for all so we have an ability to really start to get back out."
While the pandemic has created a host of challenges for D.C.'s sports and entertainment industries, there are new opportunities emerging that the leaders think will help boost the recovery.
D.C. in 2018 legalized sports gambling and multiple venues in the District are working on creating sportsbook facilities.
Capital One Arena's temporary sportsbook, featuring self-serve kiosks and betting windows, received over $12M in bets in September, ESPN reported. Monumental Sports is partnering with William Hill to create a permanent sportsbook facility in the former Greene Turtle space at the Chinatown arena.
Nationals owner Mark Lerner has expressed interest in opening a sportsbook, and the team last year received approval to build a new 35K SF restaurant and entertainment venue at Nationals Park. D.C. United is now partnering with FanDuel on a planned sportsbook at Audi Field, after previously working with Caesars Entertainment on the concept, the Washington Post reported last month.
"Adding amenities and other ways for people to enjoy sports is a good thing, so I think this will have a dramatic impact and we'll see significant growth in Washington, D.C., around sports gaming," O'Dell said.
Ein said there is also "tremendous" interest from sports gambling companies, such as FanDuel and DraftKings, to sponsor venues and events. Tennis currently has a moratorium on these companies sponsoring events, but he thinks it will get relaxed next year because of the high demand.
"The idea is how do you do this and do it in a responsible way and arguably make fantasy and gambling safer, because it's in the sunlight as opposed to the dark alleys of our community," Ein said.
Esports also present a major economic opportunity for the region, Ein and O'Dell said. The emerging trend that is popular with young people brings thousands of fans to watch teams compete in video game competitions.
Ein owns the Washington Justice, an esports team in the Overwatch League, and the team hosted an event at The Anthem in February that drew 4,000 people. He said half of the attendees traveled from outside of the D.C. area, spurring demand for hotels and retail businesses.
The Overwatch League's championships have sold out the Barclays Center in Brooklyn and the Wells Fargo Center in Philadelphia, and Ein said he expects it will sell out the Capital One Arena once large crowds are able to gather again.
"D.C. is really one of the esports hubs, not just in the country but the world," Ein said. "It was a priority for [the Overwatch League] to be in the D.C. market because they have the global lens for where esports is headed, and D.C. was a market that they needed to be in."
Events D.C. has partnered with esports leagues and has hosted esports events at the Entertainment and Sports Arena in Ward 8. O'Dell said he sees the esports industry as where the future of entertainment is heading, and he thinks the District will benefit from its growth.
"We couldn't be more bullish about esports," O'Dell said. "We want to see jobs created as a result of having esports here. We're going to be very bullish in the future to continue to grow this space."
Another opportunity that could benefit D.C.'s sports venues is the FIFA World Cup in 2026. The tournament for the first time will take place across three countries, the U.S., Mexico and Canada, and cities are vying to host games.
"We're working to get games for D.C.," Ein said. "It's not as big an impact as the Olympics, but it will bring the world here, and we're committed to make sure we bring those games here."
O'Dell said representatives from the District had "wonderful" conversations with FIFA and U.S. Soccer this summer, and he is confident the city will host World Cup games.
"We're taking advantage of bringing the community together around this wonderful opportunity for Washington," O'Dell said.