Coronavirus’s economic effect on sports could be staggering

Most obviously, gate revenue would be missed (or refunded) regardless of whether games were canceled or simply played in empty arenas. Tickets are not the largest source of income for the league; according to Forbes data gathered by sports economist Rodney Fort, they made up somewhere between 20 and 25 percent of league revenues in 2018-19. But that still works out to nearly $2 billion over a full schedule, meaning a 21 percent reduction in games could cost between $350 million and $450 million before the playoffs are even factored in. And playoff ticket sales can be much more lucrative — which is probably why league bosses like NHL commissioner Gary Bettman have emphasized they will preserve the playoffs if at all possible.

Between merchandise sales, food and parking fees, there’s plenty more money being lost to the suspended season — for teams, of course, but also for arena vendors. According to documents Fort gathered from the Brooklyn and New Jersey Nets and the New Orleans Hornets (before they moved to Charlotte) and the Charlotte Bobcats1 in the past 16 years, extra arena revenues such as parking and concessions make up somewhere between 4 and 14 percent of a team’s total income, which would also work out to something between $350 million and $1.2 billion leaguewide in the 2018-19 season (averaging to about $800 million). That average basically jibes with Team Marketing Report’s research on its fan cost index, which uses the cost of four average tickets — plus food, beverages, parking and team gear — to estimate the price of a family attending a game. The average NBA ticket price in 2018-19 was about $72, which would be $288 for a family of four. The total cost of attending a game was estimated to be about $421, meaning costs beyond the tickets make up about a third of the overall total. If the NBA made roughly $2 billion in gate receipts in 2018-19 — which it appears the league did, according to Fort’s data — that implies it also made about $900 million in nonticket revenue. This means canceled games would cost the NBA somewhere between $150 million and $200 million over the last 20 percent of the regular season.

Trending on HotAir Video