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The economic impact of COVID-19 on sports

by Humayrah Daud, student at WQE

The ball is in COVID-19’s court

The Coronavirus pandemic has sent shockwaves around the world, leading to a public health emergency that has killed thousands and plunged the global economy. Not surprisingly, COVID-19 has also put a stop to the sports calendars with professional leagues everywhere suspending their activities to limit the spread of the virus. Even the Summer Olympics, typically one the world’s most-watched sporting broadcasts, has been pushed back a year. A virus grew into a pandemic and along the way managed to pull the plug on just about every competitive event out there.

The global value of the sports industry was estimated to be US $471 billion in 2018 – an increase of 45% since 2011, before Coronavirus stopped play in its path. Now, every part of the sporting chain has been affected, from athletes, teams and leagues, to the media that broadcast and cover games. This includes games around the world such as the NBA in the US that make around $8 billion a year, most of which come from television contracts, sponsorships, and gate receipts. Coronavirus has resulted in the loss of almost 21% of games, which could cost between $350 and $450 million.

This shows that all major sports are reliant on broadcasting income. The global value of sports media rights is around $50bn – but 60% of that is accounted for by just 10 sports leagues. Source: https://www.weforum.org/agenda/2020/04/sports-covid19-coronavirus-excersise-specators-media-coverage/

Anything longer than a temporary shutdown could see the leagues unable to meet their commitments to broadcasters, limiting their ability to distribute income back to the clubs. The impact on the industry would be dramatic: no games mean no TV deals and no matchday income; no income means no clubs. The March madness in sports is an especially large loss to the tournaments. Its entertaining mix of mascots and high energy crowds appeals more to than just sports fans.

However, the organisation, Sport England, has developed a £210 million of government and National Lottery funding to help the sport and physical activity sector throughout the crisis. They have also introduced significant flexibility on how they manage existing support to individuals and organisations and are providing guidance on the rules around the Coronavirus Job Retention Scheme and publicly funded staff. This includes a £55 million sector stimulation where financial support will be needed to support and stimulate the sectors while restrictions are being lifted. This is so that organisations can get the help needed to get back to business and back to delivery (source: https://www.sportengland.org/how-we-can-help/coronavirus/coronavirus-funding-and-flexibility).

Sports has stalled because health is more important and with the flip of a switch everything has changed so quickly. If you can stay active whilst the sporting world is not, it is important to take time to partake in some form of exercise, even if it’s going for a walk as part of your daily exercise in order to have a healthy lifestyle.


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