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The Cost of Covid-19 in Sports Business

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March 22, 2020


The world of sports has been shaken in an unprecedented manner.

 

Empty stadiums, isolated fans, sponsorships deactivated and the challenging pressure to keep building digital engagement in the pursuit of attention.

 

Culture is what is left for sports organizations when their business has suddenly stopped. How they care, protect and talk to fans, sponsors and media is an opportunity or a threat to show authentic purpose.

 

The NBA, NFL, LaLiga, Premier League, Serie A, Bundesliga, Champions League, Euro 2020, MLS, 2020 Masters Tournament in golf, ATP Tour and Formula 1, among many other events have been affected by the global helath crisis.

 


The cost in United States

 

According to Forbes, $5 billion will the total cost for major sports properties for being sidelined during two months. Sale of tickets, concessions, sponsorships and TV rights fees represent the most significant revenue sources that will be affected.

 

Baseball is estimated to account for 40% of the total ($2 billion), whereas the NBA and the NCAA are facing a loss of about $1.2 billion and $1 billion, respectively. On the other hand, the NHL, Nascar and MLS are expected to represent a total of $900 million of the cost.





 

The cost in top European leagues

 

According to KPMG, €4 billion is the amount that the top competitions in England, Spain, Germany, Italy and France could potentially lose if football is completely stopped. 

 

The English Premier League would be the competition that would stand to lose the most due COVID-19, with as much of €1.25 billion, followed by LaLiga with a maximum potential loss of €950 million. Bundesliga, Serie A and Ligue 1 are estimated to face losses as much of €750 million, €650 million and €400 million, respectively. Revenues coming from Broadcasting are expected to suffer the effects of the crisis the most.

 


 

What about fans?

 

A dramatic 50% drop in live sports audiences is expected to be registered, following recent reports by Kantar Media. However, more individual exercise, time spent on social media and online education are some of the top behavioral changes since the crisis started. Particularly, an increase of 40% in social media and in exercising alone. 

 

To become part of the solution and to promote healthy habits, both Nike and Adidas have launched free online sessions though coaches and ambassadors:

 

 


 

 

 

 

Sources: 
http://www.insideworldfootball.com/2020/03/19/kpmg-report-predicts-big-5-leagues-lose-e4bn/

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