The Financial Fallout

This COVID-19 saga only continues to become more and more chaotic and wreak more havoc on normal life as time goes on. Unemployment is skyrocketing, hospitals are being overwhelmed, supplies in general are scarce, and the economy is gradually becoming more and more of a mess. However, it’s that last item that’s important to sports, because it’ll have drastic effects on what the future looks like in big leagues.

The first issue is obviously that, as the entire sports industry has ground to a halt, no money is being made. For an industry worth $160 billion, this is not good at all. Already, there are a plethora of teams who are having to make cutbacks on paying personnel. NBA Commissioner Adam Silver has already forfeited his salary as well as other high-ranking members of the NBA in order to make sure other workers continue getting paid. There are also many examples of players in various sports forfeiting certain percentages (20%, 40%, 70%, etc.) of their salaries to the same effect.

What does this all mean? Well, for many teams and clubs across the sports world, it means that they’re losing money and will continue doing so until sports come back in full force, which might not happen until early next year. However, the NBA might be at risk of losing the most. According to the New York Times, the league makes about half of its $9 billion in revenue from media fees. Obviously, since games aren’t going on, that money can’t be made.

Now, does this mean that the league will go under? Absolutely not. The NBA isn’t going anywhere, and neither are any big sports leagues (some smaller ones like Major League Lacrosse or the Arena Football League might have different futures). However, this loss in money does mean that league events for the immediate future may have to be dialed back a bit. For instance, the WNBA, a part of the NBA, will still have its annual draft on April 17th, but it’ll be done via video conferencing instead of in a grander setting.

Speaking of drafts, I’m actually surprised that the NFL hasn’t announced much of the same for their draft. This year, the draft was going to be held in Las Vegas, with the stage being in the middle of the famous Bellagio Fountain. However, without a large crowd to provide a unique atmosphere, it begs the question, what will the draft look like? And that’s not even mentioning the potential hazards of having a bunch of NFL executives and prospects in close quarters.

All I know is that the sports world we know and love is going to change for a while. It probably won’t be permanent, but this long postponement thanks to COVID-19 will have some tangible consequences on various leagues’ finances. How to move forward will be interesting.

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