Mr. and Mrs. Met take to the stage at Delta Air Lines’ unveiling of the ‘Let’s Go Mets’ aircraft at JFK Airport to celebrate the team’s return to the post-season on October 6, 2015 in New York City .
Brad Barket | Getty Images
As U.S. sports leagues continue to welcome fans in stadiums, the effects of Covid-19 are still persistent and could interfere with airline sponsorship revenue.
Data analytics firm GlobalData projects sports leagues worldwide, will face more than $ 300 million in sponsorship losses and ‘will likely broadly withdraw the airline sector from its bail obligations’ as the travel sector recovers from Covid-19.
“Given the damage the industry has suffered as a result of government shutdowns around the world, and the ensuing decline in international travel, airlines, even those that can rely on state funding, have seen drastic losses and job cuts,” writes Patrick Kinch ‘ a sports analyst at GlobalData. “As a result, in an effort to recover costs, it is likely that the airline sector will withdraw from its current sports commitments.”
Kinch added: “Right-holders are going to face the challenge of either finding an industry that is less bothered by the pandemic, or accepting a reduced value for their sponsorship.”
GlobalData announced its findings on Thursday, estimating that international airlines will spend approximately $ 737 million on sponsorships in 2021. And from that, US sports leagues will receive about $ 197 million in fees for transactions with American Airlines, United and Delta.
In an interview with CNBC, Conrad Wiacek, head of sports analysis at GlobalData, estimates that United Airlines will spend $ 29 million on sports sponsorships 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 about $ 11 million in agreements expiring. And Delta will spend about $ 70 million, with $ 14 million in transactions expiring.
GlobalData also projects airlines to spend a combined $ 60 million on the National Football League, while the National Basketball Association has bail agreements of $ 25.86 million for 2021.
Asked whether the transactions would lead to renewals, Wiacek said: “It depends on many factors; mainly on how things open up as the closure eases and the vaccination continues.” He added that ‘government support to keep airlines afloat’ would also play a role.
As part of the $ 1.9 billion Covid-19 aid package, $ 14 billion is earmarked for US airlines, the third round of federal aid to the industry. Airline contractors have set aside $ 1 billion. U.S. and international airlines serving the United States carried 398 million people last year, a 62% decrease from 2019, according to the Department of Transportation.
In addition to the general travel decline, the pandemic has intensified the airline’s sports charter business as seasons have been postponed or shortened. Before Covid-19 struck, airlines added service for major sporting events such as college football playoffs.
Wiacek added that airlines could be helped if consumers started traveling, especially to see sports teams play. If demand improves, airlines can retain some of their sponsorship deals.
“People will want to travel; they want to fly, and things like sports are the driving forces behind it,” Wiacek said. “This is the positive and the thing the airlines can look for – the eagerness to return to normal.”