The loss of television and ad revenue from the suspension of sports due to the coronavirus, will end up costing at least $12 billion, according to a recent analysis conducted for ESPN.
Those numbers, however, could become even dramatically worse if the college football and NFL seasons are seriously impacted by the virus.
“As an economist, you stand back, you look at the carnage that’s taking place — dumbfounded, awestruck, mind-numbing,” said Patrick Rishe, who heads-up the sports business program at Washington University. “All of those phrases, they’re all relevant because we just have never seen anything on this scale.”
According to ESPN:
At ESPN’s request, Rishe examined publicly available data to estimate the potential impact of the shutdown on the major pro leagues, the NCAA and youth sports. Emsi, a labor market analytics firm, worked with ESPN to provide estimates on sports-related jobs. In addition, ESPN interviewed economists, public officials, sports executives, concession workers, travel team organizers and others to assess the economic impact of the coronavirus pandemic on sports at all levels.
Rishe’s analysis relies on assumptions that appear more remote with each passing day, such as the ability of Major League Baseball and Major League Soccer to salvage at least half their seasons with fans attending games. The analysis also assumes the NBA and NHL cancel the rest of their regular seasons and the playoffs are staged without fans. And that youth sports resume by July.
The numbers include everything from the price of a ticket and a hot dog to the money you spend taking your daughter to an out-of-state soccer tournament. For example, the crisis stands to wipe out more than $3.25 billion that fans would have spent on pro sports. It would erase nearly $371 million in wages — approximately 20 million hours — for ticket takers, beer vendors and other stadium and arena employees. At least $2.2 billion of national TV revenue would be lost, as well as up to $2.4 billion in tourism related to youth sports.
Despite the enormous projected impact of Rishe’s analysis, the $12 billion figure does not account for financial losses from NASCAR, golf, tennis, or gambling. Not to mention losses from recreational sports and activities such as fishing and hunting.
“The stakes for sports become higher if part or all of the NFL and college football seasons are lost,” ESPN reports. “According to Rishe, each NFL regular-season game is worth nearly $24 million in revenue from TV rights alone — a figure larger than the budget for some Hollywood films. Collectively, the 65 college football programs in the Power 5 bring about $4 billion in revenue — money that makes up nearly half of all athletic department budgets.”
On a positive note, with Texas Tech, Texas A&M, and Baylor announcing that their campuses will be open in the fall and that they plan to play football, it looks as if the worst possible scenario will be avoided. Still, loss of ticket revenue if those games can’t be played with fans in attendance will still be significant.
Follow Dylan Gwinn on Twitter @themightygwinn