Live events are the lifeblood of the sports entertainment industry.
But as one in five U.S. citizens has been ordered to stay home due to the spread of Covid-19, almost all live games and events in the nation have been cancelled. Organizations including the National Basketball Association (NBA) and Major League Baseball (MLB) have canceled or postponed their seasons, to name a few. These cancelations have had a massive impact on the North American sports industry, which is worth approximately $80 billion.
With the mass cancelation of events including live sports in response to the pandemic, billions of dollars of revenue are at stake from lost ticket sales, ad revenue, viewership, sponsorships, merchandise, and more. The temporary end to live events has also left the future of sports as the world has known them uncertain for the time being.
Athletes aren’t the only ones on the sidelines as a result of the cancelations. Employees who work in stadiums, courts, and fields have been put out of work. Television networks and streaming services are also expected to take a hit as viewers are unable to watch live sports.
Events that have been canceled
Live sports have always given fans the opportunity to get up close and personal with their favorite athletes. But as some professional athletes have already tested positive for the virus, this experience won’t be possible. Here are just some of the events that have been moved:
- The NBA decided to suspend its season after Utah Jazz player Rudy Gobert announced that he had the virus. Fourteen NBA players have tested positive for the virus, including Gobert and Brooklyn Nets player Kevin Durant. Players from the Los Angeles Lakers, the Philadelphia 76ers, the Denver Nuggets, and other teams have tested positive.
- The National College Athletic Association (NCAA) canceled its March Madness basketball tournament for both men’s and women’s basketball. All other championship events for the winter 2020 sports season were canceled by the NCAA.
- A player on the minor league New York Yankees team has also tested positive for the virus. Opening day of the MLB season has been pushed from March 26, 2020 to mid-May at the earliest.
- The Professional Golf Association (PGA) canceled the Players Championship and the Masters tournament, which was to start on April 9, 2020, has been postponed. For the first time since 1945, the Kentucky Derby horse race was pushed from May 2, 2020 to September 5, 2020.
The impact on the sports and media industries
Leagues are expected to take a hit from ticket sales as fans aren’t able to attend. Many teams have yet to announce whether they would refund or credit ticket sales, according to the New York Times.
Additionally, the leagues are expected to suffer from the loss of television deals. The NBA earns $9 billion in advertising sales on television while the NCAA brings in an estimated $1 billion.
Athletes are also reportedly set to lose money by missing games. While major athletes aren’t expected to bear the brunt of that loss, cancelations could have a big impact on minor league athletes in the MLB. Following the postponement of the baseball season, the MLB said it would compensate minor league players for the duration.
The loss of live events and games, is also likely to mean a loss in revenue for networks, according to the New York Times. While streaming and TV viewership has increased in cities and countries where the pandemic is hitting the hardest, it is also reportedly expected to fall as people lose their jobs as a result of the virus and while production of several shows and movies is halted. For die-hard sports fans, the loss of live sports might even mean the cancelation of the services they use to watch sports coverage.
Good to know: The sports entertainment industry is part of the consumer discretionary spending, which refers to spending on non-essential items and usually slows down during times of economic turmoil. Other industries in the consumer discretionary sector such as cruise lines and airlines are struggling as a result of the pandemic.
Future of sports
Another big concern in the world of sports was what would happen to the summer Olympic games, which were set to start in Tokyo, Japan on July 24, 2020. The International Olympic Committee has decided to postpone the Summer Olympics until the summer of 2021.
The cancelation of the games is huge for athletes and fans all over the world, and suggests that the effect of coronavirus on industries could continue well into the summer. NBC paid $7.7 billion for the broadcast rights and has sold $1.25 billion in advertising spots for the games. The network is reportedly insured for such circumstances.
How the pandemic will affect fall sports such as football remains to be seen.
A silver lining for part-time workers
People employed by the sports industry such as food service workers are also struggling as they can’t work the games and events they typically would. In response, some organizations have announced ways they would help out part-time employees. The Chicago Bulls plan to pay people who would be working through previously scheduled games. The three teams who play at the Staples Center—the Lakers, Clippers, and Kings—will reportedly pay more than 2,800 part-time employees of the arena.
Individual athletes including Giannis Antetokounmpo of the Milwaukee Bucks, Blake Griffin of the Detroit Pistons, and Kevin Love of the Cleveland Cavaliers have pledged to donate hundreds of thousands of dollars to part-time employees and organizations in their respective cities.
And while Americans in sports and food service are struggling, others are finding a way to cope. Musicians and bands including John Legend and the Dropkick Murphys have live streamed songs or shows for fans. Late night hosts who have stopped filming in front of a live audience such as Jimmy Kimmel and Stephen Colbert are filming videos for fans.
While live sports without fans still put the players at risk currently, it’s possible that some sports could eventually be played without fans or that athletes could find another way to connect with fans.
Stashing amidst coronavirus
Don’t let the news around coronavirus rattle you. As Covid-19 continues to spread and challenge industries in the United States, remember to keep up the Stash Way by investing regularly for the long-term in a diversified portfolio.
Keep in mind that a diversified portfolio is one that includes investments in different sectors, industries, and countries. You can invest in stocks and ETFs of media companies and streaming services with Stash.
As you socially isolate, support small businesses in your area however you can.