The sports world is feeling the wrath of the Coronavirus. The NHL, MLS, and MLB all had to postpone or suspend their seasons indefinitely. The new XFL league announced that they will cancel the remainder of its inaugural season. However, I would argue that no sport has been more affected than basketball. The NCAA and NBA announced radical precautions to prevent the spread of Covid 19 to the dismay of owners, fans, arena staff, and players.
The NBA Suspends Its Season
After Utah Jazz center Rudy Gobert tested positive for Covid 19, the NBA quickly decided to suspend its season. At this point, it is unclear when or if the season will resume. Obviously, this is coming at a large cost for the National Basketball Association. The league was nearing the end of its regular season and towards the playoffs. For playoff time, television and advertising deals are very lucrative.
According to Tom Haberstroh of Real GM, the NBA makes roughly $1.2 million per regular-season game and $2 million per playoff game. Using these estimates, the NBA is set to lose close to $500 million if they cancel the season. One may say that this figure is too large, but history proves that it is not.
In 2019, the NBA generated $288 million in advertising for the Finals alone. Over the course of a six-game series, the league was able to rake in close to $300 million. In 2016, the NBA Finals brought in $366 million, which is greater than the $336 million that 2019’s Super Bowl generated.
The league had already been outperforming prior years in terms of revenue. Up to March 12th, the NBA generated $249 million in ad revenue, which is more than last season’s $222.6 million. On average, the playoffs account for 62% of the season’s ad revenue. With this in mind, it is reasonable to expect that the NBA would make significantly more this season than last.
Based on previous financials, the league was on pace to generate $9 billion in total revenue for the season. However, it is now unclear if the NBA will be able to generate revenue normally after this crisis.
The NCAA Cancels March Madness
Unlike the NBA, the NCAA needed to cancel its March Madness tournament completely. This puts the collegiate sports association in worse financial shape, as it leaves over $800 million on the table just from advertisements and television deals. Between ads, media, and tickets, the NCAA brought in $933 million in revenue for its tournament.
In 2010, the NCAA signed its 14-year television deal with CBS and Turner, valued at $10.8 billion. This television deal allowed the two networks to broadcast the March Madness tournament until 2024. This deal brings in over $774 million annually for the NCAA. In 2016, the deal was extended eight years until 2032. The value of the deal is $8.8 billion, which is over $1 billion per year, demonstrating the incredible value of this tournament.
Last year’s championship game saw an increase in viewership, as it grew 23% from the previous year. If this trend were to continue, it is not difficult to imagine the 2020 viewership being even greater, which could have led to greater revenue numbers for the National Collegiate Athletic Association.
Combining the potential losses of both organizations, the sport of basketball has lost around $1.3 billion in the span of a month due to Covid 19.
What Will Happen Now?
Currently, it seems that the NBA is in a better position to recover the loss than the NCAA. If this pandemic were to be mitigated before the summer, the NBA would be able to resume its season. However, the NCAA will not be able to recover the revenue lost, since its March Madness tournament is completely canceled.
(Despite this, I will not shed a tear for the NCAA, which still chooses not to compensate its players.)
Ultimately, those who are affected most by these circumstances are the arena staff. Players, coaches, and owners will not have any issues waiting for the season to resume, as a majority have multi-million dollar contracts. Since these games will not occur, arena staff are no longer able to work, essentially making them jobless until the NBA resumes.
Some NBA players, such as Zion Williamson and Blake Griffin, have donated portions of their salaries to assure that the arena staff will receive some income in the time being. However, if the season is canceled, these workers will be without employment until the next season, which would be months.
College athletes are also financially affected by the NCAA’s decision, as many can improve the chances of being draft to the NBA by performing well during March Madness. Being a higher drafter pick or drafted at all would result in a higher starting salary for the player. However, without this tournament, many of these college athletes will not have a national stage to showcase their talents to potential suitors.
Sources: Clutch Sports, Washington Post, Forbes, Investopedia, Yahoo! Finance