The Peculiar Return of Sports in COVID-19

by Dylan Wang

Will sports continue amid a return to normalcy, or will COVID prevail?

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More than one million workers were either furloughed or fired when nearly every major sporting event was canceled in mid-March. Although certain leagues have managed to contrive a shortened season with new guidelines—with some even resuming their season as previously planned—the economic impact of COVID-19 on sports and its workers has been undeniable.

Although this meltdown is only a mere fraction of the crisis spreading across the country, it is nonetheless historic, impacting every sector of the $100 billion US sports industry. “As an economist, you stand back, you look at the carnage that’s taking place—dumbfounded, awestruck, mind-numbing,” said Patrick Rishe, director of the Washington University’s Sports Business Program. The effect the pandemic has had on US sports is truly unprecedented; even during World War II and following 9/11, sports continued as a form of entertainment and employment for millions of Americans. As of this May, the industry lost over $8 billion in revenue. While we must maintain safety guidelines to ensure a sustainable economy, the 1.3 million workers in the Sports industry have suffered tremendously from the lockdown.

The NBA bubble is perhaps the paradigm for how an isolated system can work. With stringent testing and a very limited number of workers in the bubble, testing is conducted efficiently. During the regular season, each team was permitted to have no more than 37 people in the bubble, including all personnel. In the playoffs, when guests were permitted to enter the bubble, they had to self-quarantine for a week and undergo daily COVID-19 testing for four days. Although this strategy has proved effective, there were still two players who tested positive for the virus between July 7 and July 13, even though they were still in quarantine. This is a harbinger of the troubles that await other organizations looking to implement guidelines of their own, sometimes with far more personnel.

Although games without fans have severely limited the earnings of sports organizations, there is a significant revenue stream from TV rights alone: something that sports leagues cannot afford to give up. According to Rishe, each NFL regular-season game is worth nearly $24 million in TV rights alone, totaling over $6 billion; similarly, the 65 college football programs in the Power 5 are responsible for $4 billion in revenue, nearly half of all athletic department budgets in college. “If [college] football goes down, that’s just a killer,” said Rick Gentile, a former CBS executive. Within the US, sports rights are estimated to be worth over $22 billion annually. In addition to the impact on professional sports, a survey commissioned by the Sports Events and Tourism Association reported a $700 million deficit in March alone as a result of 700,000 athletes unable to participate in competitive sports.

Quarrels between the Major League Baseball and MLB Players Association pervaded the news cycle in early fall, revealing the crucial nuance that several plans must implement. Utilizing a less stringent plan, the MLB strategy relies heavily on self-discipline, a principle which many will scoff at. The notion of 900 active-roster players and 1,800 total personnel practicing monk-like self-discipline is a combination of wishful thinking and naivete. This thinking, of course, still assumes that fans will not be allowed to attend games at full capacity, if at all.

Recently, the postponement of the Patriots game has also shed light on the dilemma many leagues must make when players inevitably test positive for COVID-19. In this case, it seems that the NFL has prioritized the ability to retain a normal schedule instead of the absolute safety of players and staff. With more than a dozen Titan’s personnel infected with COVID-19 among many other cases across the league, the early weeks of the NFL regular season is a portent of the consequences of looser guidelines.

With arenas and stadiums closed or severely limited in capacity, tens of thousands of workers paid on hourly wages with no benefits are now left without a paycheck. From pouring beers to providing security in the parking lots, workers from all sectors associated with these leagues have been devastated. Whilst propelling into season may benefit organizations in the short term, the safety of staff and players must remain paramount to sustain sports in the COVID-19 world.

Effect of COVID-19 on sports industry spreads for 1.3 million workers