A Sports Business Boom for 2021? It’s Possible


Due to the COVID-19 pandemic, major sports teams were hit hard with no in-person attendance, but will look to rebound as fans return to the stands this year. (courtesy of Twitter)

2020 was an abysmal year for the business of sports, possibly the worst ever. When the Dotcom Bubble hit in 2000 and the Housing Market Crash of 2008 struck, the sports business industry was relatively unaffected. However, the COVID-19 pandemic hit sports in a way which it had never been hit before. Some small market teams like the Arizona Coyotes and the Oakland Athletics ran the risk of going bankrupt leading to numerous layoffs, as many major sponsors could not make their payments to professional teams. Ticket revenues took massive hits since fans are not allowed in large gatherings  leaving sports stadiums across the country empty. Leagues like the NBA and NHL opted for isolated “bubbles” to complete their playoffs which forced them to spend hundreds of millions of dollars while no revenue was coming in. NHL Commissioner Gary Bettman even admitted to the media at the beginning of the 2020-2021 season that the league and club teams would be operating at a loss. The current state of sports business could not look bleeker, however, it is in an excellent position for a post-COVID-19 boom which could revive the industry. 

Both the NFL and NHL are engaging in new television contract negotiations which could significantly help the economic misfortunes of the past year. Front Office Sports reported that the NFL is looking to have its negotiations wrapped up by March which would double the total revenue it currently earns taking its annual national television revenue from $7 billion to $14 billion. The NHL is looking to expand into a two-network relationship like the NBA, MLB and MLS currently have in their leagues while also increasing their total US national television revenue, separate from their Canadian television deal with Rogers SportsNet. This could include the potentially shocking departure from NBC after their announcement of shutting down NBCSN and transferring to their streaming platform Peacock at the end of the year. They may instead move to new partners such as ESPN and Fox who have both expressed mutual interest. If both the NFL and NHL are successful in their efforts to increase their television revenue, they will show that the television networks feel there is no significant long-term damage to the business.

Outside of national television contracts, merchandising and virtual fan experiences have been the only opportunities for teams to connect with fans since last March. However, with COVID-19 hotspots such as New York and New Jersey beginning to host fans again over the next two weeks, many will come back hungry wanting to grab as many sporting events in person as possible, as both the New York Rangers and Knicks are both selling tickets for over $300 per ticket on the resale market. With businesses fully open again, most sponsors should be able to pay their contractual obligations and get their advertisements and experiential activations in front of fans again. All of these signs point to 2021 being a year of revival for the industry once seen as recession-proof.