NBA suspension due to coronavirus will hit low-wage workers first
The NBA's decision this week to halt games for at least 30 days is likely to hit low-wage workers the hardest. Businesses near arenas and television networks will also get walloped, rather than the league's highly paid players and coaches.
Concession attendants are part of a larger group of hourly employees, including ushers and janitorial staff, who work when there's a live game. With the league suspending games, employees may not get paid. Team executives said they're looking into how to cushion the impact for low-paid employees.
By contrast, coaches and players earn lofty salaries that are guaranteed, with the latter making an average of $7.7 million annually.
"We feel for the workers mostly, the low-income wage earners that count on working our games," Golden State Warriors general manager Bob Myers said at a press conference on Wednesday. "If you're going to have empathy, have it for them."
Dallas Mavericks owner Mark Cuban said this week that hourly workers at American Airlines Arena, where the team plays its homes games, are his biggest concern. He said he's working on a plan to help employees who can't come to work, although he didn't provide details.
"I reached out to the folks at the arena and our folks at the Mavs to find out what it would cost to support, financially support, people who aren't going to be able to come to work," he said. "This was their source of income, so we'll do some things there. We may ask them to go do some volunteer work in exchange, but we've already started the process of having a program in place."
The NBA is the latest sporting organization canceling or postponing events because of the coronavirus pandemic. Fear of spreading the pathogen has already led to cancellations of the NCAA's March Madness college basketball tournament, Major League Soccer and the National Hockey League. The Boston Marathon will be postponed until the fall and so will the U.S. Masters. Major League Baseball is postponing its season as well.
Utah Jazz player has COVID-19
The NBA decision to suspend play came after Utah Jazz player Rudy Gobert tested positive this week for COVID-19, the disease caused by the coronavirus. Teammate Donovan Mitchell tested positive Thursday.
NBA Commissioner Adam Silver said Thursday that the season's hiatus will last at least 30 days. "But then the question becomes: Is there a protocol — frankly, with or without fans — in which we can resume play," he said. "And I think the goal is what makes sense here without compromising anybody's safety."
While hourly employees are slated to lose wages, analysts said television networks will likely lose millions in advertising dollars. ABC, ESPN and TNT broadcast national games for the league under a $24 billion contract that ends in 2025. Under the contract, the NBA designates a day of the week for each network to broadcast a game in return for the networks' payments. The networks earn a profit by selling commercials that air during games' time-outs and halftimes.
"ESPN, TNT and ABC are on the hook to pay the NBA whether the games happen or not," said Rich Greenfield, an analyst with LightShed Partners. "You're paying the cost and not getting the ad revenue. It's terrible."
The networks have not disclosed how much they could lose in NBA ad revenue. Disney, which owns ESPN and ABC, could lose $481 million if the entire season is canceled, according to MoffettNathanson estimates. Turner/TNT stands to lose $210 million.
Networks are now trying to convince advertisers to buy commercials on different shows or live events to offset the lost revenue from NBA games, said Michael Nathanson, a MoffettNathanson analyst.
Local business impact
Hotels, restaurants and bars near NBA arenas count on live games to draw NBA fans, adding millions of dollars to local economies.
One year after the Sacramento Kings built its Golden 1 Center, the venue attracted 1.6 million visitors who spent more than $71.5 million in downtown Sacramento, according the city's economic council. The Phoenix Suns playing at Talking Stick Resort Arena generates $182 million in spending on retail, hotels, food and drink, the city estimates.
In the meantime, players are promising hoop fans that they'll be back, though the nature of the coronavirus makes it nearly impossible to predict when. "Basketball will be back at some point but right now, protect yourself and stay safe out there," said Warriors guard Stephen Curry.
