The National Football League could have lost as much as $5.5 billion in gross revenue this season if fans weren’t allowed into stadiums to attend games, one of the sports’ top agents told Sportico this week.
Be that as it may, those losses still will be severe, as 12 of the 32 teams are playing without fans contributing stadium revenue in ticket sales, concessions, parking or merchandise in professional football stadiums as the coronavirus continues to spread across the U.S.
In the other 20 stadiums, attendance has been restricted from as few as 250 a game in Minnesota’s U.S. Bank Stadium to a high of 20,000 of the 80,000 capacity in AT&T Stadium where the Dallas Cowboys play in Arlington, Tex.
Still, it’s a huge chunk of lost revenue.
“The problem economically obviously is at the gate,” Leigh Steinberg said Tuesday in an exclusive interview from his office in Newport Beach, Calif., south of Los Angeles. “Gate makes up roughly 38% of the gross revenue. If they had no attendance, they’d probably lose about $5.5 billion, which equates to about $220 million a team. That’s a big economic hit.”
In comparison, Major League Baseball claimed a $3 billion loss after completing its 60-game COVID-abbreviated 2020 season without fans attending.
In the NFL, nine of the teams allowing fans are above the 10,000 level in stadiums with an average capacity of about 70,000.
Big market teams playing in New York and the San Francisco Bay Area, plus new stadiums in Los Angeles and Las Vegas, are forced by local health and safety restrictions to play without any fans at all. That affects the Giants and Jets in MetLife Stadium, the 49ers in Levi’s Stadium, the Rams and Chargers in SoFi Stadium and the Raiders in Allegiant Stadium where they moved from Oakland this season.
SoFi and Allegiant just opened this year at a cost of $5 billion and $1.84 billion, respectively—and have yet to host a single fan.
National television revenue averages about $200 million a team in a league that shares much of its revenue. At the gate, the NFL splits ticket sales on a 60-40 basis between the home and road team, while club seats and suite sales are retained by the home team, Steinberg said.
“Television revenue remains consistent,” he said. “Memorabilia, merchandise and ancillary revenue streams ought to be pretty much normal—the problem is at the gate. Here in Southern California, neither team at SoFi Stadium has fans. For the Rams, at least, that [72,240-seat] stadium would be totally sold out. It’s the eighth wonder of the world and there’s the novelty of it. That’s a hit.”
Steinberg has represented some of the top quarterbacks in NFL history, including Troy Aikman, Steve Young and current Super Bowl MVP Patrick Mahomes of the defending champion Kansas City Chiefs.
Steinberg, who also represents Miami Dolphins rookie QB Tua Tagovailoa, says he’s attended recent games in Fort Lauderdale, Fla., and Arlington, “and I felt safer in the stadium than I do at home.”
The Dolphins cap attendance at 65,326-seat Hard Rock Stadium at 13,000. Fans are required to wear masks and the facilities are constantly being sanitized.
Steinberg said the NFL had the benefit of starting later than MLB, the National Hockey League and National Basketball Association. The latter two leagues conducted their postseasons sans fans in bubble environments.
MLB played its shortened season and the first round of the playoffs in home parks with limited traveling within regions. The last three postseason rounds were played in bubbles. Fans were allowed to attend the 13 National League Championship Series and World Series games at about 25% capacity in Globe Life Field, adjacent to the Cowboys’ stadium in Arlington.
Like MLB, the NFL has already had a rash of games postponed because of coronavirus outbreaks among individual teams. The constant surge nationally in cases and deaths could ultimately affect how many fans can attend Super Bowl 55. The big game is slated this year for Feb. 7 at Raymond James Stadium in Tampa where right now fans are able to attend at 25% of the facility’s 65,890 capacity.
“Our intent is to have as many fans at the Super Bowl as can be done safely,” NFL Commissioner Roger Goodell said during a media conference call Tuesday during which he didn’t address the league’s financial losses. “Whether there are vaccines, whether there’s additional testing, we are actively considering that.”
Steinberg said the severe revenue shortfall should have an adverse effect on the salary cap, the amount each of the teams are allowed to pay players. This year, the hard cap was $198.2 million, a figure that’s based on a complex equation of the previous season’s revenue.
Active roster size in the NFL is 53 players. Though teams may have as many as 90 players protected on their individual rosters, only the top 51 contracts count against the cap.
“The hope is that next season, 10 months from now, things will be better,” Steinberg said. “It’s a one-year hit, and it will affect the salary cap.”
Prior to the season, the NFL and the union agreed on spacing out the revenue shortfall over two seasons. That would drop the salary cap no lower than $175 million next season.
“The cap will drop based on the income this year. It’s basically a 52-48% revenue in favor of the NFL,” Steinberg said. “And if the revenue is not there it’s going to ultimately be reflected in the salary cap and the contracts players have.”