LOS ANGELES, CALIFORNIA – MARCH 26: People sit on a hill overlooking Dodger Stadium on what was supposed to be Major League Baseball’s opening day, now postponed due to the coronavirus, on March 26, 2020 in Los Angeles, California. The Los Angeles Dodgers were slated to play against the San Francisco Giants at the stadium today. Major League Baseball Commissioner Rob Manfred recently said the league is “probably not gonna be able to” play a full 162 game regular season due to the spread of COVID-19. (Photo by Mario Tama/Getty Images)
The coronavirus pandemic could cause roughly $1 billion in lost advertising for broadcasters of the top three U.S. pro sports leagues, according to ad firm MediaRadar.
The advertising information company released its findings showing how the virus would affect ad spend for the sports industry. The analysis found that combined, the National Basketball Association, National Hockey League and Major League Baseball would generate a roughly $1 billion for broadcasters.
And that number could significantly increase if the National Football League experiences any delays due to coronavirus. The NFL’s season isn’t scheduled to start until September.
Todd Krizelman is the co-founder and CEO of MediaRadar. He said viewership is usually at its highest during this time, with the NBA playoffs taking up the bulk of ad spend.
“There is a lot of lost revenue as a result because there is so much spend concentrated because audiences levels are expected to be much higher in the last quarter of the season,” Krizelman said.
Projecting leagues would resume in June at the earliest, MediaRadar used ad spend data from March 2019 to May 2019 to determine its recent forecast. The data revealed the partial regular season and playoffs of NBA telecasts generated more than $800 million in ad revenue during that period, while the NHL brought in more than $120 million.
The MLB generated roughly $60 million in ad revenue for its first three months of the season in 2019. Krizelman said the estimated total is a result of data showing cheaper price points for the MLB from March to May as ratings aren’t high.
To calculate its totals, MediaRadar records every minute of advertising for sports broadcast and estimates price points of ad spots.
“We literally added up what all those advertisers were doing for specifically those three sports, and basically it’s a little over a billion dollars over that short period time,” Krizelman said.
If the NFL season is delayed or canceled later this year, MediaRadar’s data shows losses of up to $6 billion from 3,000 advertisers.
MediaRadar ran data from March 2019 to December 31, 2019, and included the MLB postseason, the World Series, the NFL season and additional revenue from new NBA and NHL seasons.
“As difficult as March through June is, a whole other scale of it continues for the fall,” Krizelman said.
Though the country is in an economic downtown, Krizelman said advertisers are still actively marketing products like breakfast food with stay-at-home orders in place across the U.S.
“We’re finding that many types of advertisers are actively marketing because they’re looking to sell stuff right now at a point where they want to make money; when they are trying to preserve jobs and corporate liquidity,” Krizelman said.
Krizelman concluded broadcasters should make up the ;lost revenue should sports return, even in empty arenas.
“Looking at all the drop off of live sports and live events, I think there will be significant demand [when sports returns],” Krizelman said.