Sports Comeback Not Enough For Victory Against COVID-19
Sports are (mostly) back.
With the exception of MLB, which has a standoff between players and team owners around terms of a potential restart, all major suspended U.S. leagues have either announced, or are about to announce, plans to restart their interrupted seasons.
This can’t come soon enough for the beleaguered media companies who have major sports networks as part of their portfolio. Viewership of sports networks plummeted as the coronavirus began to spread across the country, with all active sports seeing their activities curtailed.
The total number of major games or events lost from schedules across March through to the start of July currently stands at a staggering 1,108. Should the MLB not come to terms with their players on a truncated season, this number will swell to an even greater degree.
In terms of network impact, Disney has been hurt the most. In a reversal of fortunes, the reliable ESPN family of networks have turned from an advantage to a hindrance in the coronavirus world, with 499 scheduled events having to be removed from schedules. To illustrate the scale of how Disney was impacted, NBCUniversal was second with 281 events, which equates to 56% of Disney’s COVID-19 aftermath. It is worth noting that this calculation does not include the postponement of the Olympics, which left NBCU with a 1,064 hour hole across its networks, as well as leaving plans to anchor the launch of new SVOD service Peacock around the Olympics in tatters.
The networks will be hoping that the return of sports will yield the same audiences as before the pandemic began. This is of particular importance as the networks will be looking to sports to restore their fortunes, having taken a hit in ad revenue from the missing games.
The truth is, it may not be so easy as, ‘build it and they will come.’
The first reason for this is that cord-cutting has already increased at a frightening rate in 2020, with 1.7 million cancelling their service. With the enormous unemployment levels across the nation, this can be expected to continue to exponentially grow in Q2 (April-June). VIP’s estimate is that around 3-3.5 million people will cancel their cable and satellite subscriptions in Q2. No cable obviously means no ESPN, so ratings will take a hit.
This will also impact direct-to-consumer sports platforms such as ESPN+, Bleacher Report Live and NBC Sports Gold. A large proportion of monthly subscribers can be expected to have cancelled their service in the face of no sports, and with the economic pressures facing many households, further cancellations and a reduced number of pickups can reasonably be anticipated.
Another issue that sports networks will have to contend with is the lack of a fan-generated atmosphere. Per ESPN’s own research, the majority of sports fans are in favor of sports returning without spectators, and intend to watch. The truth may be different, if WWE’s petri dish experiment of continuing without fans is anything to go by. The sports-entertainment firm continued producing new episodes of their shows once live audiences were no longer allowed, and after an initial boost, the average audience soon fell below pre-coronavirus levels.
With that said, returning sports will be a boost for networks desperate for advertising dollars. Even if the games don’t reach the ratings levels seen in regular times, they will still be able to attract greater audiences than are currently watching linear TV.
The worry in the back of the mind though will be that increasing numbers opt to watch fewer games as the reality of atmosphere-less games sink in. Compounding this is the reality that there will be fewer Pay-TV subscribers able to watch, meaning a hit in both advertising and affiliate revenues, plus truncated seasons with fewer available games to sell advertising for. Sports may be about to be back, but it is too early to escape from COVID-19’s impact on the bottom line.
