Revisiting Post-Pandemic Predicitions

In March of 2021, sports in the United States were slowly coming out of the COVID pandemic into a quasi-state of normal. Although games were being played, the games and the experiences were changed in the name of safety for everyone involved. Consider that the NCAA Division I men’s basketball tournament was played entirely in the state of Indiana using different venues and a very limited fan capacity in each arena. The NBA had shortened its season to 72 games and the Toronto Raptors had to play their “home” games in Tampa, Florida due to COVID restrictions in Canada. Even the men’s and women’s 2021 NCAA Division III basketball tournaments were cancelled in February due to low school participation. Uncertainty was the rule of the day and I wrote a blog post at the time attempting to predict the short-term economic outlook for, specifically, professional sports. This post will examine my predictions and determine what I got right and what I got wrong. Predictions

Prediction #1: Attendance will rebound to post-coronavirus levels in the four major professional sports (MLB, NBA, NHL, and NHL). Although it was not a perfect parallel, I used the 2008 recession as an example for a post-pandemic attendance comeback. Since a worldwide pandemic interrupting professional sports is a new phenomenon, the resulting economic consequences were best reflected by the 2008 economic collapse, in my opinion. From 2008 to 2009, three of the four major leagues (MLB, NBA, and NFL) experienced a decrease in attendance and did not return to post-recession levels within four years.

Below are the post-pandemic attendance numbers from the four major sports.   

 

2019

2022

MLB

68,506,896

70,747,365

NBA

21,964,447

22,234,502

NFL

17,040,039

18,819,164

NHL

22,186,851

22,436,532

Result: Correct. Not only did attendance rebound, but it improved from post-coronavirus levels. In fact, MLB, the NBA and NHL all had record-setting years for attendance in their latest seasons (Adler, 2023; National Basketball Association, 2023; Salvian & Mendes, 2023). The NFL saw its largest increase in the past nineteen seasons (Broughton & Fisher, 2023) so it was evident that fans were ready to get back into their seats.

Prediction #2: Teams will expand new revenue streams that were developed during the pandemic. There were four areas where I felt we would see this expansion:

Advertising – Teams will provide more streaming options to their consumers and see an increase in advertising revenue.

Result: Correct. Leagues have moved games from linear television to strictly streaming (ex. Thursday Night Football on Amazon and Friday Night Baseball on Apple TV). In 2021, time spent watching sports on linear television was only eight percent; however, sports streaming was responsible for one-third of the revenue from live sports programming (Lukic, 2023). This is in spite of sports only accounting for 2.7% of the broadcasting content (Lukic, 2023).

New distribution opportunities – League schedules will change to spread out games over more days. For example, multiple NFL games on Thursday and Monday nights.

Result: Correct. The NFL is scheduled to play multiple games on Thursdays or Mondays for four weeks this season as compared to one week in 2022. The NBA has announced an additional in-season tournament beginning in November. MLB expanded the number of playoffs teams in 2022. These additional games, including prime time games in the NFL, will allow leagues to earn more advertising revenue from their media partners.

Sports betting – There will be an increase in teams adding sports gaming websites as sponsors.

Result: Correct. In 2018, the Dallas Cowboys were one of the first American professional teams to strike a partnership deal with a casino. Since then, sportsbooks and casino sponsorships with pro teams has skyrocketed from a handful in each of the big four leagues in 2020, to the majority of teams having a deal in 2023. The NBA leads the way with twenty-four out of thirty teams with sportsbook partnerships (Dahlstrom, 20223).

Virtual experiences – Fans will be allowed more access to games through virtual innovations such as unique camera angles, enhanced audio, or the ability to broadcast the games for an additional fee.  

Result: Developing. While teams are using tools such as virtual reality (VR) to improve their players’ performance on the field, the widespread use of or augmented reality (AR) with fans is still in development. Some current examples include an AR photo booth at Nashville Predators games where fans can take a photo with an AR-generated player, the Los Angeles Rams provide an app that allow fans to play each other in a series of AR games, and other interactive experiences where fans can place their favorite players as AR-generated images anywhere in the world (Balti Virtual, 2023).

Prediction #3: Ticket prices will remain relatively similar to pre-pandemic levels, but other avenues of revenue including items such as concessions, merchandise, and cable and streaming subscriptions will increase.

Result: Mostly correct. From 2019 to 2022, the Fan Cost Index for the four major professional sports all increased. The Fan Cost Index is the average amount of money a family of four can expect to spend at a game, including tickets, parking, and refreshments. The Fan Cost Index numbers are provided below (Gough, 2022).

 

2019

2022

MLB

234.38

256.41

NBA

430.00

444.12

NFL

540.52

590.64

NHL

425.22

462.58

My believe that teams wouldn’t raise ticket prices suddenly, to prevent sticker shock, was somewhat incorrect. For example, the average NFL ticket prices rose by over nine dollars from 2019 to 2022 (Gough, 2023a) and the average MLB ticket price increase by just over four dollars over the same time span (Gough, 2023c). Concession prices, however, did see an increases in soda, beer, and food. From 2019 to 2022, the average NFL concession price for soda rose by $.43, beer rose by $.30, and hot dogs had the largest increase by $.50 (Gough, 2023b). This is likely driven by increased costs due to inflation.

Additionally, all major streaming companies have increased their prices over the past year (Fischer, 2023). Below are four examples of streaming services that were launched just before or during the pandemic and their change in subscription prices during this short amount of time (Fischer, 2023). All four carry live sports.

Peacock (2020) $9.99 to $11.99

Paramount (2021) $9.99 to $11.99

Disney+ (2019) $6.99 to $10.99 – ESPN+ is included in the Disney+ bundle

Apple TV+ (2019) $4.99 to $6.99

The demand for live sports has come roaring back since the pandemic and an increase in attendance and prices should result in record revenues for the big four leagues. What remains to be seen is if these numbers are part of a pent-up demand after COVID lockdowns or a long-term trend. While inflation has appeared to cool, it is likely that the increase in prices will remain baked into the cake. This can spell trouble for sports teams as discretionary spending is one of the first places to be cut in household budgets. It does not appear, however, that this has had much of an effect on pro sports teams. Giving credence to the idea that sports are recession-proof.

References

Adler, D. (2023, October 2). Attendance up, game time down in record-setting ’23 season. MLB.com. https://www.mlb.com/news/mlb-attendance-mlb-tv-post-big-numbers-in-2023.

Balti Virtual. (2023, April 11). Augmented reality & sports. https://www.baltivirtual.com/post/augmented-reality-sports.

Broughton, D., & Fischer, B. (2023, January 16). NFL per-game attendance makes big jump. Sports Business Journal. https://www.sportsbusinessjournal.com/Journal/Issues/2023/01/16/Upfront/nfl-attendance.aspx.

Dahlstrom, T. (2023, October 5). Sports betting partnership tracker - leagues, venues, athletes, & celebs. SportsHandle. https://sportshandle.com/partnership-tracker/.

Fischer, S. (2023, July 25). Almost every big streaming service is getting more expensive. Axios. https://www.axios.com/2023/07/25/streaming-prices-2023-comparison-raise.

Gough, C. (2022, November 29). Sports leagues fan cost index 2022. Statista. https://www.statista.com/statistics/1318050/fan-cost-index-sports-leagues/.

Gough, C. (2023a, April 20). NFL average ticket price 2022. Statista. https://www.statista.com/statistics/193425/average-ticket-price-in-the-nfl-since-2006/.

Gough, C. (2023b, September 19). NFL average concession stand prices 2022. Statista. https://www.statista.com/statistics/202604/concession-stand-prices-in-the-national-football-league/.

Gough, C. (2023c, September 21). MLB average ticket price 2023. Statista. https://www.statista.com/statistics/193426/average-ticket-price-in-the-mlb-since-2006/.

Lukić, M. (2023, July 19). Sports streaming statistics (how many people watch sports online?). PlayToday. https://playtoday.co/blog/stats/sports-streaming-statistics/.

National Basketball Association. (2023, April 10). NBA sets all-time records for attendance and sellouts during 2022-23 regular season. NBA.com. https://www.nba.com/news/nba-sets-all-time-records-for-attendance-and-sellouts-during-2022-23-regular-season.

Salvian, H., & Mendes, I. (2023, June 21). NHL attendance 2022-23: A team-by-team breakdown. The Athletic. https://theathletic.com/4625953/2023/06/21/nhl-team-attendance-results-2023/.

Brandon Podgorski is an Associate Professor of Sport Management at Trine University and the Director of the Trine Center for Sports Studies.