March was not a good month for sports. In fact, some might say that it was the worst month in the entire history of athletics. Just days ahead of the NCAA March Madness, the college basketball tournament was called off. The NBA had just postponed its season, followed by the NHL, MLB, MLS and the PGA. The loss of March Madness and MLB’s Opening Day hit especially hard, as they’re two of the most prominent sports events in the month, and caused pandemonium for sports fans, sports gamblers and sportsbooks. With activity still suspended, and no clear picture of what will happen next, the U.S. sports world is suffering its worse economic depression ever. The tally is reportedly up to $12 billion already – in just two months – and continues to climb. The next couple of months are crucial to avoiding any further financial catastrophes.
According to analysis prepared by ESPN, the economic upheaval for the sports industry in the U.S. is going to be felt for some time. Hundreds of thousands of jobs have been lost, and may permanently remain off the books, and, if NFL and college games seasons aren’t able to get going this September, things will be even worse. While it’s obvious that the entire world is suffering from a huge economic meltdown, the losses for U.S. sports could represent close to 20% of their aggregate value.
ESPN explains, “From stadium authorities to youth sports complexes, from rec centers to global TV networks such as ESPN, the scale of devastation is only now coming into view. Some organizations, especially at the lower levels of sports, say they’ll be lucky to survive. The pain is especially acute among the army of low-wage service workers who support pro and college sports and are now unemployed. The losses are draining tax revenue that helps support local services such as police and firefighters and contributes to the quality of everyday life in thousands of communities.”
To reach its conclusion, ESPN employed the help of Dr. Patrick Rishe, founder of the Sports Business Program at Washington University in St. Louis, Missouri. He compiled data from the different sports leagues, relying on certain assumptions, such as whether or not leagues that were starting to get active when COVID-19 came roaring into town will be able to play at least half of their respective seasons. He also projected both the NHL and the NBA canceling their regular seasons and holding playoffs in front of empty stands.
ESPN also got with labor market firm Emsi and economists, sports executives, public officials and more in order to build its analysis. It tried to come up with a concrete, scientifically-based figure that would encompass every expense related to sports – even “the price of a ticket and a hot dog to the money you spend taking your daughter to an out-of-state soccer tournament” – in order to depict the real-world fallout of the coronavirus on sports. However, certain aspects aren’t included, such as recreational golf, fishing, etc. ESPN points out that, according to the Bureau of Economic Analysis, these types of activities generated $427 billion in revenue in 2017.
If the NFL is forced to cancel its season, or even reduce it, the economic impact is worse. Each NFL regular-season game is reported to be worth $24 million in terms of TV broadcasting rights; college football games can bring billions of dollars for the schools. Former CBS executive Rick Gentile asserts, “If [college] football goes down, that’s just a killer. I don’t know how schools recover from that, God only knows. You could make a prediction, go crazy. The Pac-12 disbands? I’m making it up, but who knows?”
These losses are just the tip of the iceberg, too. There are a number of organizations and individuals that rely on athletics to make a living, and the impact felt by the sports suspension is real. According to Rosslyn Wuchinich, the president of UNITE HERE Local 274, “Some people think this is like pocket change or work for folks in high school or college. It’s not. These are people supporting families on this income. This crisis is a deep, deep financial crisis for low-wage workers.”
At this point, sports leagues are starting to look at options to begin their recovery processes. However, with losses mounting and no guaranteed plan of attack, recovery is not going to be an easy task.