Economists: Suspension of Sports Will Cost $12B; Colorado to Feel Impact

Economists have taken an early look at how the loss of sports during the COVID-19 pandemic will affect the national economy and they’ve set the cost at around $12 billion in total revenue. 

While the $12 billion figure just considers the expected loss since the coronavirus exploded across the globe, the fallout of the pandemic will also claim a number of full-time and seasonal sports-related jobs that could reach well into the hundreds of thousands for an undetermined amount of time with no guarantee of coming back.

From professional to amateur sports, the need for workers to host and work games and tournaments is a huge economic driver in communities that use sports and its associated travel to provide employment and revenue for local workers and businesses.

“As an economist, you stand back, you look at the carnage that’s taking place — dumbfounded, awestruck, mind-numbing,” Patrick Rishe, director of the sports business program at Washington University in St. Louis told ESPN. “All of those phrases, they’re all relevant because we just have never seen anything on this scale.”

Impact of Sports Suspension Felt By Amateur Leagues

As most consider the economic devastation that suspending professional leagues have taken on seasonal workers that need home games in arenas and stadiums to make ends meet, there is a larger impact being felt at the amateur level where traveling to tournaments has created an industry that is worth hundreds of millions of dollars to hotels, restaurants, and those individuals who run the events.

In a survey conducted by the Sports Events & Tourism Association, nearly 700,000 amateur athletes were unable to participate in tournaments and events in the month of March. The loss of those games impacted the United States tourism industry by over $700 million, an indicator how a summer without amateur sports could sink businesses that need the revenue generated by these youth sporting events. 

With youth sports organizations across the country looking at their weakening balance sheet, many are now asking the U.S. government to step in with an economic rescue package totaling $8.5 billion to stabilize the businesses that run amateur events. 

Why Colorado Feels The Revenue Loss of Sports Tourism

With Colorado’s mild summer weather, the state is one of the primary locations in America for youth sports tournaments as large baseball, softball and 7-on-7 football tournaments are held every weekend during the season.

With cities such as Denver and Colorado Springs playing host to megaplex facilities where tens of games can be played each day, the loss of an entire summer is costing local Colorado economies millions in tourism dollars and putting pressure on the youth organizations that hold the tournaments to maintain their economic viability in the face of the coronavirus.

How the Return of Pro Sports Might Not Help Colorado Economy

It’s fairly well known in today’s sports world that media is the engine that pushes revenue streams down the road. But in a period of time where there are no games, teams are left without income streams that help pay professional athletes millions of dollars in salary each week during the season.

The same holds true for the hundreds of seasonal workers that maintain the stadiums and arenas during the season and accommodates the needs of fans at the games. Without the events, those employees are left without jobs during a once in a lifetime crisis.

For the Colorado Rockies and Denver Nuggets, both franchises rely on workers to help them get through the spring and summer months when attendance is high and the revenue generated supports the employees responsible for the home games. 

How the Nuggets Helped Employees During Suspension

Once the NBA season called for a suspension of game activity, many teams announced plans to help the employees that counted on home games for their salaries. The NBA employs over 52,000 workers to help the 30 teams host their 41 home games each season, that includes roughly 1,900 workers needed for each Nuggets contest at the Pepsi Center.

The ownership group of the Nuggets, Kroenke Sports & Entertainment, put together an economic package that assisted those workers hurt most by the cancellation of games in April.

“One of the many consequences of the pandemic is its effect on area businesses of all sizes,” KSE Vice-Chairman Josh Kroenke said in a press statement. “Many companies – in particular the service industry – are temporarily laying off hard-working employees due to the cancellation of events amid an uncertain future. Our hourly KSE event staff plays an integral role in ensuring our fan experience is first class in every way, and it is with these thoughts in mind that KSE will continue to pay its part-time and hourly employees for the next 30 days.”

But once those 30 days ran out in early May, many of the seasonal employees were looking elsewhere for work and wondering when they’ll be needed at a Nuggets game again.

What The Rockies Expect to Need When MLB Returns

ESPN’s Jeff Passan reported this week that MLB is close to finalizing a plan to return to playing baseball in early July. The shortened season is unlikely to include fans and more so, will use as few employees from the teams as possible to limit possible exposure of COVID-19 to players, coaches, and umpires.

After considering playing all games in just one or two cities, MLB has broached the possibility of having teams host games at their home ballpark. This likely scenario will force teams, including the Rockies, to choose the essential employees to help run the games at Coors Field.

Such positions as maintenance workers and groundskeepers will be essential to preparing the parks and playing fields for games, but without fans, there is no need for concession vendors, robbing the team of a large revenue source that generates tens of jobs at each home park location.

As the Rockies and Nuggets prepare for games without fans, just a small percentage of workers will go back to jobs, with the rest looking elsewhere until the time comes where games can be held once again with spectators.

About the Author

Derek Worlow

Derek Worlow is a freelance writer that has covered the expansion of legal sports betting in America for several well-known industry websites. During his writing career, he has written profiles on dozens of athletes and contributed work on the collision of sports and politics. Derek has also published two acclaimed biographies about Texas quarterbacks; Johnny Manziel and Robert Griffin III.