Sudden vanishing of sports due to coronavirus will cost at least $12 billion, analysis says

Discussion in 'Economics' started by wrbtrader, Sep 13, 2020.

  1. Bugsy

    Bugsy

    A lot of people are tuning out of sports as a way of boycotting the new influx of politics being infused by players. This can be seen in the actual ratings from home viewers which Coronavirus has no affect on. Similarly it is being done on both sides of the political aisle with companies infusing political messages with their products/ services, as well as the entertainment industry.

    Best practice would be to keep politics out of your business model period. I think one of the best examples of this in a major corporation is Walmart. Why alienate one side when you can court both.
     
    #21     Sep 13, 2020
    Ayn Rand likes this.
  2. wrbtrader

    wrbtrader

    Bugsy,

    Below statement in my first message post as the OP of this thread...

    Please post your news about the Economic impact on Sports by this Pandemic
    • If you have a Political statement or none economic statement...please post it in the Political section or Chit Chat section of the forum.
    Simply, I do not want any Political talks or none economic talk in this thread. You can easily post your views about the Politics in the Political section or Chit Chat section of the forum.

    Baron has designated those areas for such discussions.

    Greatly Appreciated.

    wrbtrader
     
    #22     Sep 13, 2020
  3. Bugsy

    Bugsy

    That wasn't a political statement as I stated it was both sides of the aisle and not in favor of one side or the other it was apolitical. It is in fact an economic factor. You can't simply pretend it is not just because. Now had I pointed to one side of the political spectrum then that would fit, but stating politics are in fact an economic factor in this equation is not being "political".
     
    Last edited: Sep 13, 2020
    #23     Sep 13, 2020
  4. wrbtrader

    wrbtrader

    It brings in the wrong people to express their one sided views...you know that.

    Give someone an inch...someone else takes it a mile.

    wrbtrader
     
    #24     Sep 13, 2020
  5. Bugsy

    Bugsy

    Fair point
     
    #25     Sep 13, 2020
  6. wrbtrader

    wrbtrader

    Coronavirus, sports and the financial cost
    Bundesliga stands to lose big in the corona crisis

    Many football clubs cultivate a myth that is intended to demonstrate the bond between the fans and their club. The story goes like this, with regional differences: If we just turn on the floodlights at home, a few thousand spectators will come to see what's new.

    That doesn't work in the current days of coronavirus fear, of course. Or at least it shouldn't. Because even if a game like this week's Rheinderby between Borussia Mönchengladbach and Cologne takes place as a so-called ghost game in front of empty stands, hundreds of fans gather in front of the stadium. Disease prevention looks difficult.

    On March 13, German football reacted to the danger of infection by the coronavirus. At the suggestion of the German Football League (DFL), games in the first and second Bundesliga in Germany are to be completely suspended until at least April 2. It is not yet possible to estimate how expensive this measure will ultimately be for the sport — but it will certainly not be cheap.

    No spectators until April

    Professor Christoph Breuer from the Institute for Sports Economics and Sports Management at the Sports University in Cologne does not want to comment on how sensible it is to compete under exclusion of the fans, i.e. to organize so-called ghost games or to cancel all games at once: "Only a medical doctor can answer this question."

    In any case, empty stadiums would have far-reaching consequences, Breuer tells DW: "Audience income is a central source of income for professional sports. These are now breaking away." Furthermore, according to Breuer, "the other sources of income, sponsoring and media revenues, are also at risk because the contractually agreed service cannot be provided".

    [​IMG]
    The behind-closed-doors Rheinderby was the last Bundesliga game to be played, on March 11

    It's really dark in the basement

    In the lower leagues, the economic situation for clubs is generally more precarious than in the upper football leagues, explains Breuer: a crisis like the current one "hits clubs in the lower leagues relatively harder. On the one hand, spectator revenues account for a larger share of their total revenues. On the other hand, the liquidity position is more strained anyway. Even before the COVID-19 crisis, two out of three third-division clubs were already in the red. None of the clubs in the first division are.

    Even further down the line it gets really gloomy: Kickers Emden, for example, was on the threshold of paid football just a few years ago. Today, the "Deichkickers" play in front of about 500 spectators each week in the upper league of Lower Saxony. Albert Ammermann, deputy chairman of the club, complained to the Ostfriesenzeitung: "We are not on a bed of roses anyway and could hardly cope with such a loss of income." Because of the numerous home games that have already been canceled due to the weather, "the situation is already tense."

    Beyond the day

    But it's not only this week and next week's matches that are causing headaches for club treasurers. If the games are made up for, losses could still be limited. It's still not certain, however, whether further matches will be canceled or postponed. It also shows how interlocked the match schedules are — from the regional leagues up to the Champions League.

    A curtailed season leaves many questions unanswered: Who will be promoted? Who will be relegated? Who can qualify for which European competition? Breuer considers these problems to be difficult to control. Such decisions might have to be made at the green table and not played out on the green turf.

    This is where Breuer sees European football in a difficult position. "Sporting decisions about promotion and relegation are generally accepted, decisions at the green table are not. In closed leagues like the ice hockey league or the American professional leagues without relegation and promotion, this is much easier," he said. On the other hand, in the German Ice Hockey League (DEL), for example, ghost games would be unthinkable. In view of meager TV funds, the clubs are mainly dependent on ticket sales — and many German hockey clubs are chronically short of cash anyway. So it was only logical to cancel the season before the playoffs began.

    [​IMG]
    The champions that never were or champions by default? The next steps are unclear

    And the football 'recyclers'?

    You don't necessarily have to feel sorry for faceless billion-dollar companies such as the private broadcasters Sky or Dazn, and very many football fans are generally suspicious of these rights holders. But at least it's their business model that is being questioned here.

    And doubly so: On the one hand, their contractual partners cannot "deliver" — because if there is no match, there are no more goods to be sold. And on the other hand, the rights exploiters have a duty to their customers — the paying broadcasters finance themselves through subscription contracts with them.

    Traditionally, the private broadcasters are very cautious about their business figures; they never give out more than what they are legally obliged to. You have to wait for the next balance sheets to see how expensive the coronavirus has been to this industry.

    The calls of the state

    In any case, the associations need not hope for financial help from the state. When SID (Sport Information Service) asked the German Interior Ministry, it received the following answer: "There are no federal budget funds available for sports at club level. This also applies to the professional leagues."

    According to SID, support could be provided by the Economy Ministry at most, but only in the form of loans. Because "effective instruments are available at short notice to support companies," according to the ministry, if the club is "a commercial enterprise."

    Breuer, however, doesn't think much of state aid. He puts forward another solution: instead of letting the taxpayer secure professional sport, "an opening for investors would be a more economically sensible alternative."

    #coronavirus #sports

    wrbtrader
     
    #26     Sep 13, 2020
  7. zdreg

    zdreg

    #27     Sep 13, 2020
  8. Turveyd

    Turveyd

    28days and Months later, both the best Zombie movies!!
     
    #28     Sep 13, 2020
    Option_Attack likes this.
  9. wrbtrader

    wrbtrader

    The College Football Season Is in Jeopardy. The NCAA’s Economic Model Should Be Too.

    With COVID-19 threatening college football’s massive profits, coaches and administrators are left scrambling. Suddenly, the same people who said schools couldn’t afford player labor are crying out about how they can’t afford to lose it.

    By Michael Baumann May 11, 2020, 9:20am EDT

    [​IMG] Ringer illustration

    College sports are in trouble. That first became evident when the men’s NCAA basketball tournament—a nearly billion-dollar event—was canceled, an “oh shit” moment that illustrated to the American public just how serious the COVID-19 crisis was. It became even more apparent when all winter and spring sports got the ax not long after. No March Madness, no Frozen Four, no College World Series. And while some spring athletes have been granted additional eligibility, many others saw their careers end with neither warning nor fanfare. Now, we’re far enough into social distancing that the NCAA’s ultimate cash cow, the college football season, is under threat.

    September may seem like a long way off, but just as it takes more than the uniformed players and coaches to play a game, the college football season requires more preamble than a bus ride to the stadium. The fall football season actually starts with practices and exhibitions in the spring; workouts happen throughout the summer, and organized full practices come at the end of July. In other words, if it’s not safe to practice in July, the season seemingly can’t start as scheduled, even if external conditions change for the better in the meantime.

    Coaches and experts who spoke to ESPN last month espoused a range of opinions about how much lead time the sport needs, but even the most optimistic respondents seemed to think that nothing less than a month of organized practice would be sufficient. Many coaches said that the process would take at least two months. “When you rush back, that’s when you get the soft-tissue injuries—hamstrings, Achilles tendons, groins—because you haven’t done anything,” Arizona State coach Herm Edwards told ESPN.

    That’s in line with the schedule Arkansas athletics director Hunter Yurachek proposed to his board of trustees last Monday: practice starting in mid-July, with the first game happening on September 5. But coaches and even administrators can control only so much. While schools like Tennessee and South Carolina have already stated their intention to reopen campus for the fall semester, a more cautious school would have to make an argument that football players are more essential than students and faculty in order to bring them back to an empty campus. Last Friday, NCAA president Mark Emmert said he couldn’t imagine sports taking place on empty campuses, only for Big 12 commissioner Bob Bowlsby to give a contradictory message less than 24 hours later. Furthermore, no sports can move forward without government approval—a lesson European soccer leagues are learning with each new schedule revision.

    And no matter what plans get made now, one hallmark of the global COVID-19 response has been that plans and restrictions change week to week as the virus spreads in some places and is contained in others. As much as coaches, players, fans, and reporters alike all crave clarity and certitude, that isn’t in the cards right now, and might not be for a while.

    Absent that clarity, it’s impossible to answer questions like whether a full 12-game regular season is feasible, or how travel might be arranged, or when fans might be allowed to return. Those pressing questions will have to be answered at some point, but right now they’re all secondary to the near-universal insistence within the sport that college football must go ahead, no matter what. In early April, Ross Dellenger and Pat Forde of Sports Illustrated ran a lengthy article with the headline: “We’re All Effed. There’s No Other Way to Look at This, Is There?” That provocative quote comes from an anonymous athletic director who was discussing what will happen to college sports if football’s massive profit-generating foundation crumbles. And though that assertion may seem outlandish on the surface, it’s not wrong.

    According to a USA Today report, Power Five football alone is a $4.1 billion concern, or an average of $78 million per year per school. That makes up more than 60 percent of those schools’ total athletics budgets, meaning a year without college football could spell disaster for other less prominent sports. LSU, one of the few schools to turn a profit on a sport outside of football and men’s basketball, made a profit of $56 million on football in 2016-17 and claimed a net loss of $22 million on all other sports. “Football is 85 percent of our revenue,” LSU AD Scott Woodward told SI. “That says it all. It is the engine that drives the train.”

    Those numbers are the kind of thing that illustrates the difference between knowing something—e.g., football is the economic powerhouse of college sports—and truly understanding it. Without football, the entire NCAA ecosystem, one in which a predominantly white managerial class profits from the efforts of a predominantly black and working-class labor force, collapses almost overnight. In other words, the concern over a potential lost season tells us just how important the labor of college football players is to the entire amateur sports landscape.


    Even as the NCAA is winking toward the idea that it might stop operating like Avery Brundage by allowing college athletes to seek endorsements based on their name, image, and likeness rights, the idea of compensating them directly remains very much off the table. No matter when and how the season takes place, college football players will once again prepare to do their dangerous, lucrative jobs for tuition, room, and board—payment in company scrip that, as the pandemic threatens higher education writ large, is worth less now than it’s ever been.

    As ever, the problem is not that there’s not enough money to go around, but that the economic product of players’ labor is being distributed in a way that leaves athletes out in the cold. Yes, football produces the revenue that keeps the lights on for other, less popular sports, and by and large that’s a good thing. College baseball, hockey, track, and soccer have their own fans and play a valuable role in developing future pros in those sports. And even less traditionally popular sports have just as much intrinsic competitive importance as football or basketball.

    But football produces so much money that even after funding those programs schools are left with a surplus. And without players taking a cut, that money oozes out in some perverse yet predictable ways. The most obvious of these is the coaching salary arms race. For example: In 2008, LSU set an SEC record by paying national-championship-winning head coach Les Miles $3.75 million a year; 10 years later, the Tigers gave defensive coordinator Dave Aranda a $2.5 million annual salary.

    College football coaches deserve to be paid handsomely—they work extremely hard, and while every so often an overripe Muschamp plops down unceremoniously from the coaching tree, most of them have honed their skills through decades of study and practice. But should the going rate for a Power Five head coach be in excess of $4 million a year, while the players get paid in exposure? And as much as the bit about coaches being the highest-paid public employees in 41 states has turned into a cliché, repetition doesn’t reduce its trenchancy.

    Nor does that profit get cycled back into a university system that’s suffering massive cuts in public funding. Rather than scale back facilities upgrades and administrative costs, or dip into football’s money-printing machine, universities nationwide have cut the legs out from under teachers and researchers who supposedly give the system its reason for being. And all of this comes at a massive humanitarian cost.

    In this respect, college football is no different, as facilities upgrades eat up another huge slice of the athletics budget. And we’re not just talking about upgrading the weight room and buying a few extra Final Cut licenses for the video staff. Without having an avenue to pay recruits directly, schools use facilities as a draw at a cost of tens of millions of dollars. The University of Texas recently spent $7 million on its football locker room alone.



    I’m sure quarterback Sam Ehlinger appreciates the luxury of getting dressed in front of a glowing cubicle. But I’m just as sure that he and his teammates would prefer a merely nice locker room and a bundle of cash to a changing area that looks like the inside of Cerebro.

    And it’s not just the big-name programs getting in on the arms race. Northwestern, a summer camp for Jake Tapper wannabes with one outright Big Ten title since World War II, spent $270 million on facilities upgrades while ferociously opposing its players’ 2014 attempt to organize a labor union. Kentucky, which has finished above .500 13 times since 1977, unveiled a $45 million gridiron headquarters in 2016. “Kentucky football’s new training facility is the price you pay to compete,” read a headline from the Lexington Herald-Leader. (Since opening the facility, Kentucky has finished no higher than third in the SEC East, indicating that the price you pay to compete is in fact somewhere north of $45 million.)

    A system that pays out million-dollar salaries and nine-figure construction contracts can surely afford to cut its players in on the product of their work. If the axioms of the NCAA and its apologists ever held water, they surely don’t anymore, as the same people who six months ago thought schools couldn’t afford their players’ labor are now crying out about how they can’t afford not to have it. Iowa State AD Jamie Pollard put it succinctly in an interview with The Washington Post: “I don’t know how any of us, how the current NCAA model, could survive if we’re not playing any football games.”
    • College football players are one of the few workforces for whom the pandemic-based economic panic strengthens their negotiating position. They do a dangerous job for no pay, and as a direct result an entire multibillion-dollar industry exists. Without their compliance, there is no industry. If you doubt that, just ask the panicked ADs and administrators who said so to ESPN and Sports Illustrated. One could not ask for a more explicit and obvious illustration of the value of players’ work than this.
    #coronavirus #sports

    wrbtrader
     
    Last edited: Sep 13, 2020
    #29     Sep 13, 2020
  10. pixel

    pixel

    I mean, COVID19 has brought so many downs these days, so it is expected.
     
    #30     Sep 14, 2020
    wrbtrader likes this.