Suspending sports will have ‘huge economic impact’: Steinberg Sports and Entertainment CEO
Steinberg Sports and Entertainment CEO Leigh Steinberg explains how the economy will be impacted by sports events and seasons being canceled due to coronavirus.
U.S. sports leagues came to a complete halt on Thursday as the world contends with the worsening coronavirus outbreak, placing billions of dollars in cumulative revenue at risk and forcing the cancellation of some of the year’s most high-profile events.
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Officials took drastic action after Rudy Gobert of the NBA’s Utah Jazz tested positive for coronavirus on Wednesday, raising questions about the likelihood that further games could be held without posing a health risk to players and the public at large. The NBA, MLB, MLS and NHL all opted to suspend activities until further notice, while the NCAA took the unprecedented action of canceling March Madness basketball tournaments.
Sports executives prioritized the health and safety of their employees over inevitable financial losses. For leagues in the midst of their seasons, such as the NBA, those losses are expected to be steep.
ARE NBA PLAYERS PAID DURING CORONAVIRUS SUSPENSION?
FOX Business breaks down what we know about the coronavirus outbreak’s financial impact on U.S. sports below.
By canceling the NCAA men’s and women’s basketball tournaments for the first time on record, the collegiate sports organization forfeited its most lucrative event.
The NCAA’s Division I men’s basketball tournament generates $867.5 million annually from television and marketing rights, according to the institution’s website. The event constitutes a significant portion of the NCAA’s yearly revenue. In 2019, the NCAA earned an estimated $933 million when factoring in media rights, ticket sales and sponsorships.
NCAA MARCH MADNESS CANCELLATION WILL COST ORGANIZATION BIG
NCAA President Mark Emmert told the New York Times he expects to lose tens of millions of dollars in missed ticket revenue alone.
The NBA’s sudden suspension of play following Gobert’s diagnosis placed further financial strain on a league still recovering from a high-profile spat last fall with Chinese sponsors that cost up to $200 million in revenue. Even before the season was put on hold, NBA stakeholders were projecting “hundreds of millions” in lost revenue due to coronavirus-related complications, according to ESPN.