The coronavirus (COVID-19) outbreak is causing widespread concern and economic hardship for consumers, businesses and communities across the globe. We’ve prepared some general guidance on COVID-19: What US business leaders should know, covering the key areas of crisis management and response, workforce, operations and supply chain, financial reporting, tax and trade, and strategy and brand.
Most companies already have business continuity plans, but those may not fully address the fast-moving and unknown variables of a pandemic like COVID-19. Typical contingency plans are intended to confirm operational effectiveness following events like natural disasters, cyber incidents and power outages, among others. They don’t generally take into account the widespread quarantines, extended school closures and added travel restrictions that may occur in the case of a global health emergency.
The crisis raises a number of unique challenges. In PwC’s inaugural COVID-19 CFO Pulse Survey, finance leaders in the United States and Mexico shared their top concerns.
Here is our take on some issues that companies in your industry may face:
Social distancing guidelines drive cancellations of live events nationwide at stadiums, arenas, theaters, resorts, theme parks and other venues, resulting in lost revenues from ticket sales, merchandising, advertising, promotions.
The cancellations affect not just the main performers or teams, but also stadium workers, businesses in close proximity and the community at large in terms of economic impact.
Social distancing guidelines trigger office closings, requiring more employees to work remotely. This may increase cybersecurity risks.
Compensation and benefits may not be adequate in the wake of the crisis.
Suspension of movie and television production causes delays in release dates.
Upfronts go digital, an untested format that could negatively impact ad sales.
Social distancing generates a boost in digital media — video and music streaming and downloads, as well as online publications.
Operational, workforce and supply chain disruptions could trigger financial reporting implications in current and future reporting periods.
Public companies may face increasing pressure to disclose revised guidance related to COVID-19’s impact.
New state and local tax implications arise for employees who are now working remotely as a result of the crisis.
Tax compliance operations could lag as newly remote employees lack timely access to information.
In the short term, changes to income statements — such as short-term losses — may affect forecasts.
A sudden or prolonged economic downturn will likely lead to companies to consider significant budget cuts to eliminate discretionary spending.
Remote work, online education and social distancing will create demand for products and services delivered by this industry.
The crisis underscores the need for flexible, resilient business models, including increased focus on cash-flow forecasting and impacts with supply chain and commercial channel partners.
Company valuations may become more attractive for acquisitions by cash-rich companies that have been sitting on the sidelines with targets in mind.
Beyond these pillars, each industry will need to address some subtleties of its own.
Fan energy lags, as postponed events don’t generate the same interest they originally did.
The crisis could fundamentally change how some sports are viewed, becoming “studio” events with empty venues.
Some sports segments that are currently stalled due to COVID-19 — such as sports gambling — could see an emergence of new interest after the crisis.
While the media industry may be among the hardest hit by the COVID-19 crisis, it is also the one humanity is relying on for crucial up-to-the-minute information — and as a way to counter the isolation caused by social distancing.
As past crises have proven, the media industry has shown the ability to rally, buoyed by resurgent demand during the recovery.
Ultimately, consumers want to stay informed. They want to be entertained. And the media industry — encompassing the ecosystem of B2B and B2C companies — continues to find novel, engaging ways to help deliver on the promise of keeping customers informed and entertained.
Technology, Media and Telecommunications Partner, PwC US
Managing Director, Sports Practice Leader, PwC US