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Coronavirus outbreak has been labeled as Global Pandemic by WHO. After the spread of the virus, life is slowly coming to a halt and along with it much of the economy. For instance, the annual global GDP is projected to drop at 2.4% in 2020 as a whole. It has hit many Countries and Industries in a disastrous manner. Industries such as Tech, Entertainment, Insurance, Travel & Tourism, Retail & ECommerce and Sports are worst affected. One such Industry which has tragic loss is Sports.
COVID and Sports
Some of the preeminent events in Sports Calendar suffered a lot due to the Coronavirus outbreak. The broadcasters, the clubs, the organizers are among those counting multibillion-dollar cost of disturbance after events were canceled. After players and coaches decided to self-isolate, the organizations had to postpone the events. Among those are the English premier league, France’s Ligue and UEFA. Some of the major fixtures such as Formula One, NBA (National Basketball Association), NHL (National Hockey League), Major League Soccer, Indian Premier League (IPL) and all state tournaments have been postponed.
In the UK, the English Premier League, one of the world’s most popular and watched competitions, had also formulated a plan for completing the season even if it called for empty stadiums, to protect its 9.2B Pound which they had invested in domestic and international broadcasting contracts. But unfortunately, the plan didn’t work after the Arsenal manager Mikel Arteta and Chelsea player Callum Hudson Odoi announced that they had tested positive for Coronavirus.
Formula one races which are often run at losses or are subsidized by governments has pressure to fulfill the upcoming races, as a third of Formula one’s overall revenues come from the promotional fees which are worth $30M-$70M an event; also the promoters try to regain the money through ticket sales.
The suspension of NBA and NHL as they were coming near high stake playoffs could mean loss of hundreds of million dollars in advertising revenues for the biggest media companies such as Disney, which owns ESPN and AT&T’s WarnerMedia. The loss of NBA events leaves a big hole in their programming schedule and suspension of fixtures means loss of advertising revenue.
According to Kantar Media, Postseason games make up to 62% of total TV advertising spending for the NBA as the ratings fly high during higher stakes contests. Moffett Nathanson analysts estimated a loss for Disney and Turner to be $481M and $210M respectively. The belt of cancellations has put the broadcast schedules in shambles, while clubs are facing cash crunch making it difficult for them to pay salaries to the players, franchisers are getting ready for legal battles for calling off a season.
Is it only about immediate revenue loss after matches that are nullified, or there is more to it?
I guess it’s just the start of it. Clubs, broadcasters and other agencies involved also have commercial contracts which they must look up to. There are matches being broadcasted which are dependent on the spectators in the stadium. Loss in ticket sales will damage events and clubs. Also, the suspension of games is a significant obstruction for broadcasters, which pay billions of dollars for the rights to broadcast live sports and to block their schedules, to attract the viewers and sell advertising.
COVID and Entertainment
The entertainment sector has been hit no differently with theatres being shut, shooting and promotional events at halt and release of major films being pushed. Bollywood is looking towards a loss of Rs 800 to Rs 1500 Crore, and at least 1,20,000 people in Hollywood are out of work. It is hard to quantify exactly how much money is at stake here. The more significant loss here is the people who are out of the job and have no work. The freelancer who depends and earn on a project basis are hit hard as everything is at a standstill. With theatres being shut, there is a loss to the owners and movie producers who work on a contract basis and depend solely on the ticket sale. In Similar way, the television sector, which depends on daily soaps, is also suffering as the shoots are halted.
The broadcasters are facing hardships and significant competition in this tough time with the OTT’s such a Netflix, Amazon Prime, Hotstar. As people are gradually adapting to these platforms, the small-screen will be left profitable only for news broadcasters.
This Global Pandemic has buried many dreams and made a lot of people suffer emotionally, financially and mentally. Some say it is World war 3, some say it’s a Bio war, but no one knows the truth apart from the fact that it is dangerous and contagious. About 25 million people could lose their jobs worldwide due to this pandemic, and many would even go homeless.
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