NFL faces tough times for 2020, then bright economic outlook

Let’s get this straight from the out­set: If the NFL has no fans at any games this sea­son — or doesn’t have much of a sea­son at all — it will not go out of business.

Sure, the 32 teams and the league itself will lose mil­lions, very pos­si­bly bil­lions of dol­lars. Its broad­cast part­ners will take a hit hard­er than any that Von Miller has deliv­ered on the field. Same for spon­sors and adver­tis­ers who pin­point pro foot­ball as the best way to reach fans (read: consumers).

And unless the coro­n­avirus pan­dem­ic stretch­es beyond the 2020 sea­son, the NFL will come out right where it has been for decades: on top of the sports world.

“The NFL is to the sports and enter­tain­ment indus­try the way Ama­zon is to the retail indus­try,” says Marc Gan­is, co-founder of Chica­go-based con­sult­ing group Sports­corp and a con­fi­dant of many NFL owners.

“We need to look at this as an over­ar­ch­ing umbrel­la: This has a like­li­hood of being a one-sea­son prob­lem. So as we get to the 2021 sea­son, the prob­lem will have gone away, so it is a one-year aberration.

“There’s a semi-per­ma­nent impact (on oth­er indus­tries) I don’t see for the NFL. I see the NFL com­ing back stronger than ever for two reasons:

— “The val­ue of the NFL for non-atten­dance activ­i­ty. Broad­cast­ing, gam­bling, Inter­net, video gam­ing, those all need the NFL more than ever before. The kinds of peo­ple and con­sumer activ­i­ties it attracts, it will come back more strong.

— “The new CBA with the play­ers, the 11 years of labor peace. When it was approved in March there were a host of high-pro­file play­ers say­ing they were against it, in large mea­sure because they didn’t see a rush to do it so quick­ly. They were as wrong as any­body could ever be. You just don’t know what tomor­row will bring, so get it done when you can get it done.”

Get­ting done the biggest chunk of NFL rev­enues, new broad­cast deals, is on the hori­zon, too. From net­work TV to cable to satel­lite to radio to stream­ing rights, the NFL is like­ly to fill its vaults with untold rich­es even with the over­all U.S. econ­o­my struggling.

First, of course, there is the COVID-19-impact­ed 2020 sea­son, and the finan­cials won’t be pret­ty even if the entire reg­u­lar sea­son and play­offs go off as sched­uled. Cer­tain­ly not with emp­ty sta­di­ums across the nation — less than a dozen teams are like­ly to have fans on hand this sea­son, bar­ring a turn­around in the pan­dem­ic that no one in the med­ical com­mu­ni­ty is predicting.

If games are can­celed, or the play­offs and Super Bowl need to be moved back in the cal­en­dar, the mon­e­tary effect will be sub­stan­tial — felt per­haps the most by NFL mar­ket­ing partners.

“The gen­er­al con­sen­sus is nobody is com­plete­ly jump­ing ship right now,” says Mark Reino, CEO of Mer­it Mile, a Boca Raton, Fla.-based adver­tis­ing, PR and sports mar­ket­ing agency.

“How­ev­er, no one is sign­ing the lev­el of lucra­tive con­tracts they signed in pre­vi­ous years. They are still assess­ing and try­ing to under­stand how these dynam­ics will play out. We are not even sure where this is going to take us. Most of us expect the NFL to play a sea­son, but it could take a dif­fer­ent turn.

“Nat­u­ral­ly, cor­po­rate spon­sors need that vis­i­bil­i­ty to dri­ve a lot of ini­tia­tives … but they’re not eager to make the aggres­sive moves giv­en the cur­rent situation.

“The fan base is hun­gry, and if the teams can fig­ure out the right way to pack­age up cor­po­rate spon­sor­ship val­ue and deliv­er unique ideas to the adver­tis­ers and cor­po­rate spon­sors, they will be OK. This will be a unique year, and every­body will take hits, but those who have pro­gres­sive thinkers like­ly will win. And teams with own­er­ship inter­est in their sta­di­ums will have much more oppor­tu­ni­ty to cap­i­tal­ize than those that don’t.”

That’s a com­mon theme.

The Dol­phins, who have announced plans to have about 13,000 fans at Hard Rock Sta­di­um for their home open­er in Week 2 against Buf­fa­lo, already have got­ten creative.

Own­er Stephen Ross and his staff came up with an idea that met with raised eye­brows: turn­ing the sta­di­um into a dri­ve-in theater.

Sim­i­lar to Gan­is, Reino sug­gests there will be oth­er poten­tial pro­grams in tan­gen­tial areas of sports mar­ket­ing, such as gam­bling and online bet­ting — once taboo in NFL circles.

“Rest assured all 32 teams have some sort of task force on how they will mon­e­tize online bet­ting as soon as it is approved nation­wide,” Reino says.

How about pro­vid­ing sea­son tick­et holder’s extra val­ue such as access to play­ers social­ly dis­tanced and on an exper­i­men­tal basis?

“These are the ideas that all of a sud­den rise to the con­cept state because it is 2020 and where we are in 2020,” Reino adds.

So where is the NFL in 2020, at least finan­cial­ly? Like near­ly every oth­er busi­ness in Amer­i­ca — and cer­tain­ly like all sports — it’s in a tough spot. Teams could afford recent con­tracts such as the megabucks giv­en to Patrick Mahomes and Joey Bosa under nor­mal circumstances.

Because of eco­nom­ic effects from the pan­dem­ic, future play­er deals and a salary cap that will be adjust­ed due to some mon­e­tary set­backs, upcom­ing free agents might find the mar­ket­place tighter.

But to hold a bake sale — well, some­thing a bit larg­er — to aid the NFL won’t be necessary.

“There are acti­va­tions being planned that are dif­fer­ent from what we have seen in the past,” Gan­is says. “Auto com­pa­nies are plan­ning on major spon­sor­ship acti­va­tions; Amer­i­cans always need to buy cars. There is a major plan for much more pro­duc­tion by man­u­fac­tur­ers and they have to get the cars out the door. Auto com­pa­nies are major team sponsors.

“Air­line spon­sor­ships will be a prob­lem, and the NFL has a deal, as do each of the teams. Any­thing trav­el-relat­ed is a problem.

“But there is so much inter­est in the NFL com­ing back in broad­cast­ing and dig­i­tal, and all the ancil­lary pro­gram­ming and fan­ta­sy leagues and sports gam­bling. Nobody wants to leave the NFL right now. ”

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