(Newswire.net — June 2, 2020) — All of the United States’ major professional sports leagues face astronomical financial losses from television revenue and advertising as a result of the COVID-19 pandemic, which has caused more deaths in the country than any other worldwide.
The XFL filed for bankruptcy last month only a few games into their first season since 2001, while the NFL stands to lose astronomical fees. Each NFL regular season game is believed to be worth around $24 million in revenue from TV rights alone. On top of that matchday revenue from fans, ticket sales, beer, food and merchandise will all drop to zero if the 2020 season goes ahead behind closed doors.
College football would be hit greatly too, whilst the NBA and MLS seasons were already underway and are now rushing around to see if they can get any resumption and finale at all. Major League Baseball is believed to be losing around $75 million a day currently as the league was due to start on 26 March and not a single ball has been pitched so far. All in all, ESPN reports that the American sports industry could be set to lose $12 billion.
Live events are the foundation on which sponsorships are built. Whether amateur or professional, sponsors rely on fan engagement and other activities at their events. Games in empty stadiums just won’t attract similar level sponsorship deals that we’ve been used to reading about for a number of years.
So how will the top sports leagues react to this? It’s now down to them to re engage with their fans sitting at home over the weekends as they are either in lockdown or have little else to do without a sporting event to attend. Whether they need professional sports marketing advice or not, only time will tell when they go ahead with their efforts.
Previously, big attendances in stadiums had been key to sponsorship deals. The NFL only ditched their blackout policy in 2015, stating that a home game cannot be televised in the team’s local market if at least 85% of the tickets had not been sold 72 hours prior to its kickoff time. Now they need to get back in front of their fans sitting at home, for them to continue watching the games and buying merchandise.
Getting fans to sign up for digital television to watch the games should be easier from the point of view that fans cannot attend the games. Though harder in the sense that many fans have been made redundant with a possible recession heading their way.
Sports marketers will need to be smarter with their money as budgets are likely to be cut substantially. It’s unlikely many leagues will put up an advert on your social media feeds 24/7, but rather less frequent. They will also need to be more specific with their targeting, which is relatively easy to do on the likes of Facebook and Twitter, segmenting your target audiences.
Television advertising could become cheaper with less businesses competing for advertising space simply as a result of many going bankrupt.
With lockdowns and the simple fear of catching the coronavirus keeping people at home for many more hours than they are used to, billboard advertising, and posters in social places such as gyms and bars will likely be reduced too.