Impact of Potential Economic Downturn on Teams?

Obviously, there has been no shortage of good discussion on CD about almost every aspect of COVID-19 on FIRST teams. One thing I’ve been thinking about, now that we know the season is suspended/cancelled, presumably at least for the rest of this school year, and potentially for good until next year, is the potential financial impact on future seasons.

At least here in the US, some believe that we are heading into a serious recession. I am no economist, so I won’t try to claim one way or another whether this is true. But, I think it’s an eventuality worth considering. So, even though we will get our champs registration fees back for those of us that had already qualified, we all are facing a very real possibility of families and mentors losing jobs, money becoming tight at sponsors, more families requesting financial assistance with travel/dues if that’s something your team does, etc.

On top of all that, FIRST has obviously lost a lot of money with the cancellation of worlds, and if they do reschedule suspended/postponed events, is on track to lose more. So, I would also think it’s not outside the realm of possibility that FIRST is forced to raise dues and/or limit assistance to rookie teams in the coming years.

What is CD thinking about this? Are any other teams concerned about how economic issues could impact their club and members next season?

(as always, my posts don’t represent the official position of any team or organization–we are still in the very early stages of our planning and have not even discussed this topic yet as a club)

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I’m concerned that our sponsors, big and small. will be hesitant to grant us money and supplies if they are unsure of their own futures.

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I predict we lose many teams next season who don’t have rainy day funds.

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At the top of my “What do we do now” list is fundraising. We essentially get a 2-month head start on it now, versus when the season would normally end for us.

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The #1 thing I can recommend to teams is to diversify your sponsor base. Relying on a few companies for your teams main source of funding is the quickest way for the team to fold. The more diverse your sponsor base is, the better you can weather economic downturn.

33 went through this process back in 2008 during the last major recession, and it is the reason we have so many unique sponsors today.

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I’m a bit concerned about teams who get significant funding from any sort of travel company (airlines, airline contractors, transportation, etc), as due to the large amounts of refunds it’s not an unlikely probability they might go under.

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Many remember the GM teams and the recession. Sponsorship money will dry up very quickly in a economic downturn, and you’ll be more reliant on small donors, sales/fundraisers, and tightened belts.

I work for a major US airline and generally the industry doesn’t offer sponsorship. Most of our support is with free round trip air travel based off of volunteer hours for the organization (one team in the area gets a modest sponsorship but it’s a specific department that funds it rather than the corporate giving team).

For the impact to FIRST I’m really worried about Boeing. They’ve been spending cash on subsidizing the airline industry because of the MAX groundings (rightfully so), continued to build an airplane that is grounded, and funded some of their supply chain. Now, all of those planes may not be needed anymore given the airlines massive cuts to capacity that have already been announced; and United giving guidance that a worst case scenario is a 70% reduction in revenue in April compared to last year. That’s just stunning.

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Can you give any advice, and maybe some examples, of what 33 did in 2008? Especially if the general outlook is that we are headed into a recession.

Also, @ngreen – what happened to the GM teams during the recession? All this insight will be especially helpful for all teams, especially during this tough time.

Recession? wait for this virus to pass