Sports activities leagues dealing with greater than $300 million drop from airline sponsors
Mr. and Mrs. Met pose on stage at Delta Air Lines’ launch of the ‘Let’s Go Mets’ aircraft at JFK Airport to celebrate the team’s return to the postseason on October 6, 2015 in New York City.
Brad Barket | Getty Images
As U.S. sports leagues continue to welcome fans to the stadiums, the effects of Covid-19 will continue and may affect airline sponsorship revenue.
Data analytics firm GlobalData estimates that sporting leagues around the world are suffering more than $ 300 million in sponsorship losses and “are likely to see the aviation sector largely retreat from sponsorship commitments” as the travel sector recovers from Covid-19.
“Given the damage inflicted on the industry by government-enforced lockdowns around the world and the subsequent decline in international travel, airlines, even those dependent on sovereign wealth funds, have experienced dramatic losses and downsizing,” wrote Patrick Kinch . a sports analyst at GlobalData. “In order to recoup the costs, the aviation sector is likely to pull out of its current sporting obligations.”
Kinch added, “Rights holders face the challenge of either finding an industry less affected by the pandemic or accepting reduced value for their sponsorship assets.”
GlobalData released its results on Thursday and estimates that global airlines will spend around $ 737 million on sponsorship in 2021. Of this, US sports leagues receive fees of around $ 197 million for deals with American Airlines, United and Delta.
In an interview with CNBC, Conrad Wiacek, director of sports analysis at GlobalData, estimates that United Airlines will spend $ 29 million on sports sponsorship in 2021, of which $ 13 million will expire this year.
A Delta Airlines Boeing 757-251 approaches Washington Ronald Reagan National Airport (DCA) in Arlington, Virginia on February 24, 2021.
Daniel Slim | AFP | Getty Images
American Airlines is expected to spend $ 23.3 million this year, with approximately $ 11 million agreements expiring. And Delta will spend about $ 70 million with $ 14 million being phased out on business.
GlobalData also estimates these airlines together will spend about $ 60 million on the National Football League, while the National Basketball Association has $ 25.86 million in sponsorship deals for 2021.
When asked if the deals will be renewed, Wiacek said, “It depends on a lot of factors. Mostly how things open up when the lockdowns wear off and vaccinations continue.” He added that “government support to keep airlines afloat” will also play a role.
As part of the $ 1.9 trillion Covid-19 aid package, $ 14 billion is earmarked for US airlines, the third round of federal aid for the industry. Airlines were given $ 1 billion. U.S. and international airlines serving the U.S. carried 398 million people last year, down 62% from 2019, according to the Department of Transportation.
In addition to the general declines in travel, the pandemic weighed on the airlines’ sport charter business as the season was postponed or shortened. Before Covid-19 hit, airlines had added service to major sporting events like college football playoffs.
Wiacek added that airlines could be supported as consumers start traveling, particularly to watch sports teams play. If demand improves, airlines could keep some of their sponsorship offers.
“People will want to travel; they will want to fly, and things like exercise are driving it,” said Wiacek. “That’s the positive and what airlines can be looking for – willingness to return to normal.”