The sports world has come to a halt due to the outbreak of coronavirus, preventing leagues from generating revenue money.
Sports executives and decision makers made the choice to prioritize the health and safety of the public over financial loss, which was the obvious and right choice to make.
The canceled NCAA basketball tournament and suspended NBA season are two of the biggest sporting events this time of year.
Here is the financial impact of the coronavirus outbreak on the NCAA and NBA.
This is the first time that the NCAA men’s or women’s basketball tournament has been canceled.
The men’s tournament has been held every year since it began in 1939.
The women’s tournament has been held every year since it began in 1982.
As a result of canceling the men’s and women’s basketball tournaments, the NCAA now won’t have their most lucrative event.
The event makes up a significant portion of the NCAA’s yearly revenue, according to Fox Business.
In 2019, the NCAA earned an estimated $933 million when factoring in media rights, ticket sales and sponsorships.
NCAA President Mark Emmert recently said that he expects to lose tens of millions of dollars in missed ticket revenue alone.
The NBA has already dealt with about $200 million in lost revenue after the fallout from Houston Rockets General Manager Daryl Morey’s tweet in support of Hong Kong protesters.
Even before the season was suspended, NBA stakeholders were projecting “hundreds of millions” in lost revenue due to coronavirus-related complications, according to ESPN.
Commissioner Adam Silver confirmed the NBA season will be suspended at least 30 days.
Revenue from ticket sales and national television advertisements will be zero.
As explained by Ghost Insights, he NBA salary cap is determined by basketball-related income, so a prolonged absence in revenue would decrease the salary cap for the 2020-2021 season.
Players will also lose a portion of their salaries, as a result from a clause in the NBA Collective Bargaining Agreement (CBA) that allows teams to take back some pay in events such as epidemics and natural disasters.
The CBA states that if games are canceled, players will forfeit 1/92.6th of their salary per game missed (5 preseason, 82 regular season and 5.2 postseason).
For example, high-paid star LeBron James will lose around $9 million in salary.
The previous calculation will result in losses ranging from hundreds of thousands of dollars for players with smaller salaries to millions of dollars for the high-paid stars in the league.