Today, the NFL announced the possibility of how they could recoup some of the projected losses they are facing due to the impeding coronavirus situation.
If the entire 2020 season were not be allowed to have paying fans present, ESPN estimated that the league could lose as much as $3 billion in revenue if games are played without paying customers. That equates to about $100 million per club. There are talks about having partial houses in place, or even small percentages of fans. Regardless, the loss of tremendous income is at stake.
The new plan will allow NFL owners the ability to sell advertising all around the first block of seats in each stadium for the television audience to view.
According to Sports Business Journal, the first eight rows in each arena would be tarped-off with an advertiser’s message emblazoned upon the signage. These seats usually are the most expensive, so this angle is a gamble and a trade off. But the league has to do something to off-set the fact that there may be limited attendance and therefore a drop in revenue.
The signage could be sold to local companies, but the target will be more likely national brands.
Currently, it is unsure if fans will allowed to attend or if partial sales are appropriate, what percentage and configuration that will entail. One thing is certain: that source of revenue will decrease dramatically. Add the fact that reduced spectators will also result in fewer sales with concessions, parking, merchandise, programs and stadium advertiser signage contracts.
This new plan is viewed as an opportunity for clubs to make some money, but will not off-set the large amount of losses the league is expecting from the loss of ticket sales.
Currently, training camps remain in play to open in July, but there is uncertainty as to whether fans will be able to attend. The choices the league are facing at this point is either zero fans, or to abide by what their local and state guidelines will allow.
The quickest answer might be for the NFL to just come out and state that no fans will be allowed to attend any games all year. That would solve all problems right away and erase the complications that could ensue regarding the spread of the virus, social distancing requirements, mask obligations, seating arrangements, and other items such as escalators and concourse restrictions.
Of course, fans want to see live games, and the NFL is built on fan attendance.
It was mentioned that certain stadiums have already considered not selling the lower half of their lower bowls in order to keep the fans as far away from the playing field as possible. The advertising placement would simply become a natural buffer that would generate funds.
Television contracts are the league’s greatest source of revenue, so this new plan makes sense.