The financial impact of postponements
THE IMPACT of TV advertising spend on major competitions in the United States such as the National Hockey League, the National Basketball Association, and Major League Baseball is argued to be in the region of US$1 billion (J$134 billion) because of the postponement of these events. Several franchises have been making salary adjustments to limit the economic impact of the shutdown. This is being mirrored globally, with more events being cancelled, while events such as the Tour de France have not yet indicated what route they will take. Some European football leagues are still optimistic about completing the season, while Wimbledon has officially been cancelled.
In Jamaica, the fallout might not be as significant as it is in larger countries such as the UK, Italy, the US, and Spain, but we, too, will feel the effects of the shutdown of both local and international sport. Sadly, media houses could take a huge hit. Sport is a big content provider for several media houses, and sports report packages are used to inform and educate listeners. SportsMax TV and FLOW Sports generate a lot of revenue from subscription and sponsorship. SportsMax has been leading the way in producing and airing local content, as well as distributing international content for viewers in the Caribbean.
Like NBC, ESPN, and Fox Sports, SportsMax could be severely affected this year. While I am sure they will regroup and find innovative ways to capitalise on the events in 2021, the postponement of Tokyo 2020 to 2021 will add to their woes; add to that the UEFA Champions League and other local and international programming on a daily basis.
LOSS OF SPONSORSHIP
In some cases, it is expected that sponsorship will be lost, while others could be deferred to 2021, depending on the contract negotiations going forward. Free-to-air station Television Jamaica would have depended on the ISSA/ GraceKennedy Boys and Girls’ Athletic Championships (Champs), both in terms of sponsorship and subscription, on the flagship streaming site 1spotmedia.com, which was expected for this year, as well as the RJRGLEANER Group’s coverage of the Tokyo Games. Our local radio stations and print media would have budgeted for sponsorship for coverage of events such as Champs, the Penn Relays, the Red Stripe Premier League (RSPL), and Tokyo 2020, to name a few.
While the RSPL remains a semiprofessional football league, it provides employment for not just players but also coaches, officials, vendors, and ground staff. At this time, we would be seeing the play-offs, and that is one of the main revenue streams for clubs as the excitement builds around this time. I can only imagine what the clubs are going through now, even as they announced a 50 per cent reduction in salaries for players earlier this week.
Track and field has been the number one sport locally, in terms of coverage and the overall earning potential of athletes, with many becoming professionals. Those with contracts already might continue to get support from their brands, but others may struggle as they were depending on this season to earn on the circuit or secure professional deals with one of the apparel sponsors. These are in the majority and may now be forced to make serious decisions about their future in the sport.
HORSE RACING
At Caymanas Park, the organisers tried desperately to keep the venue open, including proposing racing behind closed doors. It was only a matter of time before it was closed down, and with that, the hopes of many owners, breeders, jockeys, and support staff at the stables.
I am sure this will negatively affect the betting, gaming, and lottery industry, which pumps millions into the Sports Development Foundation through CHASE, which is distributed by the Ministry of Sport to various sporting associations and for sports-development activities. We are no closer to ascertaining the financial impact on Jamaica’s sporting industry, but rest assured that the global shutdown will have a rippling effect on the local sporting landscape.
Any sector of the economy that you look at will suffer significant losses. Some will look to the Government for support when this is over. I am hopeful, like everyone else, that this will end soon, but the forecast looks grim for the next few weeks. The lingering effect in the future will be problematic for the rebuilding process, and to make matters worse, we are approximately eight weeks away from the start of the Atlantic hurricane season.