The NFL’s Biggest Pandemic Super Bowl Financial Scenarios

The NFL's Biggest Pandemic Super Bowl Financial Scenarios

Despite having to postpone more than 15 games due to COVID-19, and despite criticism for not incorporating additional weeks and for allow fans in person to certain games, the NFL got through its pandemic season without having to cancel a single game.

Now his reward is a Super Bowl 55 game that should provide golden ratings.

The Kansas City Chiefs, led by 25-year-old quarterback Patrick Mahomes, and the Tampa Bay Buccaneers, led by 43-year-old quarterback Tom Brady, will face off in Florida in the first-ever Super Bowl on Sunday. at the home stadium of one of the game. It will also be the first time that the starting quarterbacks will be the two most recent Super Bowl winning quarterbacks. Mahomes won a championship and was the 2018 league MVP; Brady won six and was the 2017 league MVP, his third MVP trophy. Brady, in his first year with Tampa Bay, is playing in his 10th Super Bowl.

Some have called it the league’s dream scenario at the end of a nightmarish regular season.

That’s not to say the pandemic hasn’t had financial consequences for the league. NFL Franchises lost around $ 100 million in team revenue, according to CBS, which would amount to $ 3.2 billion. MLB lost over $ 3 billion in revenue of its shortened 2020 season, the The NBA had a shortfall of $ 1.5 billion, and the The NHL lost $ 1 billion, and Major League Soccer lost $ 1 billion.

But the NFL, with $ 16 billion in 2019 revenue, can hold up better than others.

So the biggest business stories to watch this Super Bowl are the same as they always are – but every pillar has been affected by the pandemic.

Lamar Jackson # 8 of the Baltimore Ravens waits for the snap in front of a sign reading “Black Lives Matter” against the Kansas City Chiefs at M&T Bank Stadium on September 28, 2020 in Baltimore, Maryland. (Photo by Todd Olszewski / Getty Images) TV ratings

It was a well-worn story: TV ratings last summer and fall were down in all areas for live professional sports, especially the NBA, MLB, NHL and golf.

The NFL was no exception: its regular season audience fell by 8% on average. Was this the mental toll of the pandemic? The distraction of the presidential election? (That was the explanation the NFL chose.) More important social concerns, like the Black Lives Matter movement? The oddity of not seeing live crowds at most games? Was this an indicator of a more troubling long-term macro audience shift for leagues?

The story continues

Whatever the reason, the audience turned for the conference championship games January 24. The NFC Championship game between the Buccaneers and Packers (and between veterans Tom Brady and Aaron Rodgers) averaged 45 million viewers and had a peak audience of 53 million, making it the Most Viewed NFC Championship game since 2017, there are four seasons. The AFC Championship game attracted around 42 million viewers, up 2% from last year’s AFC Championship game.

These numbers bode well for Super Bowl odds – if the game stay close. And since many Americans are staying at home amid the pandemic rather than going to parties or bars, that should mean more home TVs are tuning into CBS. (72% of Americans say they don’t plan on attending a Super Bowl party this year, according to WalletHub.)

Advertising dollars

The pandemic’s toll is certainly hanging over this Super Bowl and all sports in 2020 and 2021. Given that reality, you can expect to see a lot of serious and emotional publicity on the pandemic and topics like family, friendliness and front. healthcare workers – think of Chrysler’s iconic 2011 Super Bowl “Imported from Detroit” ad featuring Eminem and credited with helping Detroit emerge from the 2008 recession.

Amid that backdrop, three of the biggest perennial advertisers hold this one up: Budweiser, Coke, and Pepsi don’t run Super Bowl ads. This is two of the the three biggest advertisers last year. (Budweiser’s parent company, Anheuser-Busch InBev, will still run ads for the Bud Light and Michelob brands.)

But the pandemic hasn’t done much to blunt the spot price. ViacomCBS (VIAC) has fetched $ 5.5 million for 30 seconds this year, down from the $ 5.6 million Fox picked up last year, marking the Super’s first ad price drop for the Super Bowl for years, even though it’s a negligible price drop. According to Kantar, Fox raised a total of $ 448 million from Super Bowl advertisers last year. And despite the pandemic, Variety reports that CBS was “practically depleted” of its advertising inventory last week.

National Football League fans gather in downtown Tampa ahead of Super Bowl LV during the COVID-19 pandemic on January 30, 2021 in Tampa, Florida. The Tampa Bay Buccaneers will face the Kansas City Chiefs at Raymond James Stadium for Super Bowl LV on February 7. (Photo by Octavio Jones / Getty Images)

Even in the midst of the pandemic, legal betting has defined the sports business in 2020.

Twenty-six states (plus Washington, DC) have now either launched legal sports betting or passed legislation and are waiting to be launched. Mobile sports betting (on smartphones) needs to be legalized separately, and 12 states have done so. Betting operators like DraftKings (which went public in April via SPAC), FanDuel (owned by Flutter Entertainment), MGM, William Hill and Penn National Gaming have been riding the legalization wave, rushing to launch sports betting apps, and their stock prices have risen as a result.

In the NFL, where the league recently began allowing NFL franchises to sign team-specific casino sponsorships (separately from the league’s Caesars deal), the Dallas Cowboys jumped first, with the WinStar casino sponsor. At the same time, dozens of NFL teams and other professional teams have signed sports betting partnerships with DraftKings, FanDuel or BetMGM. And the Las Vegas Raiders have started playing at their new stadium this season, a few miles from the casino strip; Many onlookers believed they would never see the day the NFL let a team call Sin City home.

Thanks to the wave of state-by-state legalization, the American Gaming Association says Super Bowl 55 will generate the most legal bets on a single event ever – but also, based on a survey conducted with Morning Consult , that the number of Americans place a bet 37% decrease compared to last year to 23.2 million people, “almost entirely caused by” the pandemic.

Ticket sales

The NFL allows 22,000 supporters to enter the Tampa stadium, or one third of the stadium’s normal 65,000-seat capacity. This number includes 7,500 vaccinated frontline health workers who travel to the game for free, leaving 14,500 tickets on the open market. (Masks will be strictly required, says the NFL.)

The day after the NFL announced it would allow 22,000 fans, the average aftermarket resale listing price sites increased by 16%.

On Monday January 25, the day after the final match, resale prices skyrocketed. TickPick, for example, saw the highest average price site has already registered: $ 23,371. It was 188% more than the day after the AFC and NFC championship games in 2020.

And the entry or lowest prices available for resale sites climbed above $ 8,000 – a 30% spike from last year and the most expensive entry prices since 2010, with the exception of 2015, a year of now infamous anomaly in the Super Bowl ticket industry. (The average ticket price for the last five Super Bowls was $ 5,506, according to WalletHub.)

Prices have since fallen, but the initial jaw-dropping pop has been attributed to scarcity of seats, with Brady making his 10th appearance and first with the Buccaneers, and the Buccaneers fan base not having seen their team in. the Super Bowl since 2002.

NFL fans gather in downtown Tampa ahead of Super Bowl LV during the COVID-19 pandemic on January 30, 2021. The Tampa Bay Buccaneers will face the Kansas City Chiefs at Raymond James Stadium for Super Bowl LV February 7. (Photo by Octavio Jones / Getty Images) Economic impact for Tampa

Hosting the Super Bowl usually means a great economic benefit to the host city, as fans come to town and eat at local restaurants, shop in stores, and stay in hotels.

The pandemic will seriously reduce that momentum for Tampa.

Miami officials last year fixed the economic impact of hosting Super Bowl 54 at $ 570 million, and in 2018 officials from Minneapolis put the boost their town got from Super Bowl 52 to $ 370 million.

These estimates are still very limited and can be “grossly exaggerated,” as economist Andrew Zimbalist told Yahoo Finance in 2019 of NFL stadiums and Super Bowl hosting. But there is certainly a payoff from the infusion of tourist money, and with just 22,000 fans attending the game, and amid continued COVID-19 rules and social distancing in effect, Tampa could get less than half the boost it would have had without the pandemic. Yet even with greatly reduced crowds, fans flocking to the game will be looking for a place to stay, and local Tampa Bay fans who venture out will be looking for a place to eat.

Daniel Roberts is a senior editor at Yahoo Finance and specializes in sports commerce. Follow him on Twitter at @readDanwrite.

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Originally posted Feb 3, 2021 5:35 am

Via: finance.yahoo.com

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