The outlook for the North American sports market is currently in a fluid situation with the majority of professional sports having paused because of the COVID-19 pandemic. Before the COVID-19 virus spreading to North America, there was expected to be an annual average growth of the sector of over three percent. Sports Video published a study from PricewaterhouseCoopers forecasting the growth of the North American sports market from $71.1 billion in 2018 to $83.1 billion by 2023.
These forecasts were put into place long before the rise of the Coronavirus in China and its spread across Asia into Europe and on into North America. The forecast from auditing and financial sector specialists regarding the North American sports sector and its growth have been largely altered by COVID-19 and the uncertainty that remains about many tope sports leagues and associations.
What COVID-19 has highlighted is the reliance of the major sports leagues on traditional revenue streams, such as fans paying at the gate and the constant stream of broadcaster's rights funding most teams. North America is home to four of the top five sports leagues in the world, with only the English Premier League breaking the monopoly of the NBA, NHL, MLB, and NFL in terms of revenue. However, each of these leagues, including those outside North America are now seeking out new revenue streams that may lead to new ways of finding funds such as the use of new technologies and more closely engaging with fans.
Social media engagement led by companies such as Greenfly has become more important than ever since the arrival of COVID-19 as fans are looking online for their sports-related content. The North American market could see some shrinkage as broadcasters and sports franchises clash over the compensation available for missed games. The NBA is currently working under a nine-year contract that is worth $24 billion, which is dependent on the league being able to fulfill its contractual obligations.
The 2020 COVID-19 pandemic has led to the suspension of every league at some point in North America with the World Economic Forum explaining the long-lasting success of any franchise is based in its position in a specified league. When the league play of North America was suspended, the problem for every team was a loss of revenue and an economic future that is far from certain.
Overall, there is little chance of a major turnaround in the way the top sports franchises in North America look to make money and increase revenue. However, the lockdown seen because of COVID-19 could have the effect of bringing about a change in the way revenues are created for the majority of teams and leagues. All the major sports leagues and organizations have dipped into their archives to bring classic games to fans around the world. Fans in the U.K. were given the chance to relieve the European Championship of 1996 in full throughout the lockdown.
The opening up of social distancing restrictions should have a positive effect on the sports market with most leagues taking up the offer of a tournament-style event at a single location. This should lead to a return to profitability, but any further lockdowns due to the second wave of COVID-19 will lead to a much darker outlook with many smaller teams on the verge of extinction.