Webinar Summary: The Return of Sports Amid COVID-19

by Colton Campbell, IEDC Intern 

REMI, an economic modeling and analysis organization, hosted an online webinar on July 1 discussing the return of sports during the current pandemic. The webinar and ensuing open-floor discussion was held by three of REMI’s Economic Associates, Chris Judson, Katherine Clement, and Brandon Stanaway. Their presentation can be accessed on REMI’s website. 

As July rolls in, the United States is now beginning month five of its COVID-19 lockdown. With inconsistent social distancing protocols across the states, as many begin to reopen, there is a jump in case numbers. Despite this, United States sports leagues --Major League Baseball (MLB), the National Basketball Association (NBA), and Major League Soccer (MLS)-- are all expected to return to play sometime in the next 30 days. While the teams from these leagues do provide a much needed positive economic impact for their cities, it may be surprising for many to learn that the changes to national sports leagues playing seasons will not have as much as an economic impact as the changes to college sports.  

Though college football is only profitable for a few schools across the country, in those places it provides a critical revenue stream that helps fund other school programs and injects outside money into local economies. Sports network ESPN estimates that the potential loss from the Power Five conferences’ (SEC, Big 10, Big 12, Pac-12, ACC) schools alone could be $4.1 billion. In Mississippi, the University of Mississippi and Mississippi State University could each see a loss of over $100 million if the college football season gets cancelled. Cancelling these games means that fans will not be able to travel into town to watch, specifically the alumni of the schools who funnel money back into the programs.

 In Alabama, Auburn University and the University of Alabama could see economic losses of over $170 million each in a similar situation as Mississippi. This can also produce major drops in employment for these communities and states if the stadiums are not being used in the fall. It is important to note that these numbers are only stadium-level losses, meaning that they do not include the potential losses from places within the community that are outside of the stadiums and universities, and do not account for outside costs, like housing and transportation, which would also take a hit. There are effects of this that surpass the local economies and can impact the regional and national levels. 

Following the example of the NBA, there are thoughts of playing college football games without fans. While this gives everyone a chance to watch and cheer for their favorite teams, the local economies will still take a hit. Most of the money produced from this action would go to the internet and TV companies, since they would be projected to have a much higher viewership. All in all, the “sports industrial complex” in America accounts for $71 billion in annual revenue with three million jobs directly dependent on sports. An analysis done by ESPN on May 1 states that, “Sudden vanishing of sports due to coronavirus will cost at least $12 billion.” They continued by saying that this is an economic catastrophe that will more than double if the NFL and college football schedules are erased in the upcoming fall season.