Economic Impact of Covid-19 on Sports Industry

Due to the pandemic, the sports industry has been hit dramatically around the world. Most regional/national/international sporting events and matches have been cancelled to limit the spread of the virus which has had a major impact on the economy of this sector as players would play fewer matches and competitions with little to no watching through fans which will keep adding up the financial losses. The global sports market generates around $756 billion annually. What is more extraordinary is that the sports related GDP in the EU is 2.12% of the total GDP in the EU, which means that about every 47th Euro is produced through the sports sector. Furthermore, around 5.76 million jobs in the EU are located in the sports sector which is about 2.72% of the total EU employment. This means that every 37th employee in the European Union is part of the sports industry prior to the pandemic. However, the coronavirus has had a massive impact on the economy of the sports industry which has hurt the economy in the European Union dramatically. UEFA (Union of European Football Associations) has postponed the Euro championship which takes place every 4 years to help minimize their losses. This tournament usually helps them generate $2 billion from sponsors, broadcasters, and many other factors but postponing it to 2021 seems to be a better alternative than cancelling it altogether as that would cost $300 billion compared to $400 billion if cancelled. The potential ticket revenue losses in MLS due to Covid-19 cumulatively sum to be around $367.7 million and it is estimated that the maximum revenue loss in the broadcasting sector of the English Premier League is around $967 million. Reopening of different leagues like the English Premier League are projected to start back in September but it seems very likely that players and teams will play without any spectators in the stands which will be a unique experience for everyone. The road ahead for the sports industry still seems quite uncertain as there are still many questions that are lingering around. How can we create a similar experience for fans watching sporting events at homes? How do we make up for the economic and financial loss caused to our team/league? How can we attract and establish better relationships with sponsors and broadcasters? The answers to these questions will surely come at some point but for now, we just have to wait around and see how we cope with this deadly pandemic.