NBA suspends season as player tests positive for COVID-19
Passionate sports fans are being forced to find something else to do in their spare time after most major leagues announced season suspensions or delays amid health concerns in wake of the COVID-19 outbreak.
But while fans are left with boredom, there's a group of people likely working furiously behind closed doors: Advertisers.
"They'll be negotiating like crazy for makeups. The advertisers won't accept 'no you're not running [the ad].’ So they'll be looking for deals for future seasons or when it comes back on,” Alan Middleton, professor of marketing at York University's Schulich School of Business, told BNN Bloomberg in a phone interview.
“There's going to be a lot of negotiation going on.”
The National Hockey League and the National Basketball Association have suspended their seasons until further notice. Meanwhile, Major League Baseball has cancelled spring training and will delay its 2020 opening day by at least two weeks, and Major League Soccer is suspending its season for 30 days.
Human impact aside, the COVID-19 pandemic is putting sports advertisers and team owners in a difficult position because neither are at fault for the season disruptions.
Middleton suggested leagues can present televised specials or give permission to sports networks to run old footage or championship games.
"Everyone is trapped in this dilemma," Middleton said. "But equally, how much of the total loss can you afford? I would say for the major sports, the networks and the other people supplying them will probably be a little more generous than obviously the minor sports. But that leads to another opportunity. If you're Maple Leaf Sports and Entertainment, you have to save a number of different sports."
"The stronger the club, the stronger the traditional audience, the stronger the media coverage, the more feisty the negotiations will get," he added.
Compounding the issue is the fact that the suspensions for Canada's two biggest sports leagues – the NHL and NBA – are coming near playoff season, which typically commands higher-paid advertisements.
"[NBA Commissioner] Adam Silver is a pretty sharp guy, [NHL Commissioner] Gary Bettman is a sharp guy. They're now thinking: What can we structure if we get the virus under control enough to actually have a playoff?," said Glen Hodgson, fellow-in-residence at C.D. Howe Institute and co-author of the book Power Play: The Business Economics of Pro Sports.
“For example, if there are teams tied for the wildcard in hockey, do we have a three-game tournament rather than having playoffs?"
Hodgson said if leagues opt for an abbreviated version of the playoffs, there will be questions about whether the players are in shape, and whether there are regional pockets where teams still won't be able to compete.
Brands linked to arenas will also likely face some tough questions in the coming weeks and months about their returns on investment.
"If your name is on a hockey rink and you're only getting two-thirds of the value you paid for this year, are you going to get a refund? Are you going to get a credit for this year? Will you take from your budget and find other ways to advertise? They will look for other ways to get their brand out there," Hodgson said.
"But truly, it's a huge issue here. The NHL season is about 80 per cent done, so how are [advertisers] going to share the impact in terms of revenue loss?”
There's incredible uncertainty in particular about when – or even if – the hockey and basketball seasons will resume, as they were close to their end. But if games start back up, Middleton says the advertising opportunities will likely be significantly devalued.
"Hockey playoffs have been declining in audiences in Canada but they're still high because of the time of year. But if it goes on too long, they’ll likely be in the middle of baseball season and holiday season,” Middleton said. “The advertisers are going to look at that — summer drop-off in television viewing— even with attractive finals and ask whether they’re going to get the same eyeballs.”
“The answer is probably not," he added.
He said the difficulty for advertisers is knowing when to plan for recovery.
"The big uncertainty is not that it's happening,” he said. “You're not sure about how long it's going to be."