In yesterday’s newsletter entitled “COVID-19 Unlikely to Decimate Sports-Related revenues in America”, we explained why holding events without fans in attendance would seemingly be worst case scenario for domestic sports leagues as it relates to the Coronavirus. Dr. Harvey Schiller (former executive director of the USOC, former CEO YankeesNets, former President of Turner Sports) suggested as long as the number of domestic cases continued to grow incrementally, COVID-19 wouldn’t have much of an impact on the March or April sports calendar. That remains our position – even in the wake of the Ivy League’s decision to cancel their post-season basketball tournament – but there is one scenario that would result in a U.S. pro sports league’s season coming to a sudden halt; an active player testing positive for the virus.
Howie Long-Short: Most of the talk to date – at least publicly – has focused on the precautions the NBA, NHL and MLB are taking to keep players safe. There has been little to no discussion about how the 3 leagues intend to handle the situation should one of their players fall ill to the virus. Long-time front-office executive (A’s, Grizzlies, Warriors) Andy Dolich doesn’t believe that the leagues are being coy, he says it’s more likely that they’re trying to “stay as nimble and agile as they can. Information [surrounding the virus] is changing by the day. They want to gain as much input as possible before formalizing plans.”
At this point, the NBA, NHL and MLB are all preparing to play games as scheduled. While holding games in empty buildings is becoming increasingly more likely (see: MAC & Big West conference tournaments), expect the show to go on unless/until a player contracts the virus. Should that occur, the infected individual – along with anyone else he’s come into contact with (see: teammates, opponents) – would be facing mandatory two-week quarantines. Dolich says the prospect of several teams having to take an unplanned hiatus “would bring about competitive balance issues and ultimately force the league to shut down for some time.”
While it’s true that NFL and MLB games were made-up in the wake of the 9/11 terrorist attacks, Dolich thinks that an extended work stoppage would more than likely result in a shortened regular season. “History has shown – in large part due to labor interruption – that the leagues will choose to have an abbreviated season (see: NBA ’98-’99, NHL ’12-‘13) and move on to the following year on schedule [as opposed to pushing their playoffs back].” Remember, post 9/11 NFL teams missed just a single game and MLB resumed play less than one week later. There weren’t weeks worth of games to make up.
Should one of the big four sports leagues decide to play an abbreviated schedule it will cost owners and players alike. A loss of games would all but certainly result in clubs having to refund a portion of ticket and sponsorship sales revenues (Dolich indicated that broadcast dollars could likely be offset with future “make goods” in the form of programming) and as Bloomberg’s Scott Soshnick reported there is a ‘force majeure’ clause in the NBA CBA that could cost players 1% of their annual salary for each game missed. The NHL has similar off-set language in their player contracts that calls for “a prorated reduction in pay” should games be cancelled for reasons beyond the league’s control.
If/When league’s decide on their own volition to play games in ‘fanless’ arenas (as opposed to the government making the decision for them, as it did in San Jose), it will likely be the liability associated with a fan or team/league/arena employee picking up the contagium at the venue driving the decision. Dolich says one must look no further than all of the lawsuits filed by passengers who were aboard cruise ships carrying COVID-19 patients to understand why playing games without fans could be in a league’s best interest.
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