How the pandemic caused an economic impact on the NFL

When COVID-19 first appeared, it’s safe to say no one could predict how the following couple of years would go. Many thought it would be a simple issue that would have been eradicated or brought under control within months of it appearing. But here we are many years later, still seeing the impacts brought on by the coronavirus pandemic.

People have lost jobs, businesses have closed down, we even saw music and sporting events canceled. There was not a single industry that wasn’t impacted by this pandemic that has taken so many of our loved ones and potentially changed our lives forever. Even with vaccines now available, we’re still seeing new variants pop up that reset any progress made and set panic back in.

One industry that has been massively affected, besides the healthcare industry which we all know has struggled through the pandemic, is the sporting world. The NFL is one such sporting league that has been hit hard, and although things are beginning to return to some sort of normality, the economic impact the pandemic has had is still visible.

But just how has the pandemic caused an economic impact on the NFL?

Empty stadiums lead to empty pockets

At the start of the coronavirus pandemic, sporting events around the world were postponed. The UEFA Champions League, NBA Championships and the NFL were just some of those competitions that suffered. No games meant no income from gate receipts for the fans who follow their teams week in, week out. However, with games just postponed, there was hope this income could be regained by playing games at a later date.

Some sporting events would eventually go on to play games, whereas others just decided to null and void their seasons and start fresh in the following campaign. Those who decided to continue though did so with some big changes. Ultimately, they would be playing games with no fans in the stands. Impacting not just the atmosphere at games, as players did their stuff on the field without cheering and jeering from the sidelines, but without the ticket revenue they were expecting.

Without the ticket revenue incoming, this meant income dropped significantly. Fortunately though, on one hand, because fans were not in the stands, this meant ticketing staff, staff who worked food kiosks and security personnel were not needed. Saving NFL franchises a significant chunk of their match day expenditure, however it only cut their losses rather than helping them back into making a profit.

The NFL in particular was hit hard, having lost around $4 billion due to the COVID-19 pandemic. Because as well as tickets on game day, there were also losses from earning in food and drink, merchandise and at some stadiums, car park charges. But these weren’t the only areas in which franchises lost money.

TV rights wronged franchises

Due to many games being postponed, this meant that broadcasters who had paid to showcase NFL franchises were refusing to pay what they owed. Because despite it not being the fault of the NFL that the COVID-19 pandemic came around and stopped games, it also wasn’t the fault of broadcasters, and they weren’t going to shell out millions of dollars to pay for something they weren’t going to get.

Therefore, once games restarted, new deals had to be negotiated. Because of empty stadiums, to keep fans connected, more games were broadcast on TV, as well as new services such as the official NFL app that would showcase some of the biggest games. Even NFL betting sites have helped in keeping fans engaged at home since travel was restricted due to COVID-19.

Not only did NFL betting sites allow fans to place wagers on games, they introduced streaming of certain games, and also introduced live game coverage. From real-time stats, to live text commentary. This did have a positive impact on the economic impact of the NFL as well, with franchises signing sports betting and gambling deals. It is believed that the NFL itself raised around $270 million from these deals, with that figure expected to hit as high as $1 billion as more States legalize online betting.

And teams too have obviously benefited from this as well. Helping to offset some of the losses they made that we covered above with the lack of revenue generated from no fans being in stadiums.

Pandemic encourages exploration of new markets

Due to the ongoing issues around the Pandemic, the NFL were forced to explore new avenues to generate revenue they had lost, which as things return to normal, will mean increased revenues in the future. As mentioned above, with issues around TV rights, this is one area the NFL looked into, and outside of traditional broadcasters, they began to look at new ways to showcase their entertainment. With the likes of Amazon Prime Video securing deals to stream a set number of games each year starting from 2023 when current deals expire.

But this wasn’t the only area that they looked at. The NFL have always had video games they have endorsed, with EA’s Madden series available on consoles and PC, and because this was one industry not as heavily impacted as many others, it was one they were keen to explore. As such, they ended up expanding the NFL brand and franchises by teaming up with games such as Roblox which now sports an in-game NFL store.

New deals such as this, have helped to generate new avenues of revenue that can help the NFL recover some of their losses that came about due to the pandemic. But as stated, these aren’t just here for the time being whilst we still sit in an unknown world in terms of how our lives will continue to be impacted by COVID-19. They are going to be avenues that will be here for the foreseeable future, and opportunities like this will only continue to grow and grow.

Final words

There is no doubt the NFL has been hit hard economically by the pandemic. However, it has forced them into new avenues to generate revenue. And once the world returns to normal, these new avenues will continue to exist alongside the old ones. So whilst initially the impact was a negative one that cost the NFL billions, it could actually be very beneficial in the long run, and even see record revenues recorded in the next decade.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes