Mr. and Mrs. Met pose on stage at the unveiling of the “Let’s Go Mets” aircraft from Delta Air Lines 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 US sports leagues continue to welcome fans back to the stadiums, the impact of Covid-19 persists and may interfere with airline sponsorship revenue.
Data analytics firm GlobalData projects that sports leagues around the world will face sponsorship losses of more than $ 300 million and “will likely see a broad withdrawal of the airline industry from its sponsorship commitments,” as the industry tourism recovers from Covid-19.
“Given the damage done to the industry as a result of government-imposed blockades around the world and the subsequent decline in international travel, airlines, even those able to rely on sovereign wealth funds, have suffered drastic losses and job cuts.” , wrote Patrick Kinch, a sports analyst at GlobalData. “As a result, in a cost-recovery effort, the airline sector is likely to withdraw from its current sporting commitments.”
Kinch added: “Rights holders will face the challenge of finding either an industry that has been less troubled by the pandemic or accepting low value for their sponsorship assets.”
GlobalData released its findings Thursday and estimates that global airlines will spend about $ 737 million on sponsorships in 2021. And from that figure, U.S. sports leagues will receive about $ 197 million in fees for American Airlines transactions. , United and Delta.
In an interview with CNBC, Conrad Wiacek, head of sports analysis at GlobalData, estimates that United Airlines will spend $ 29 million in 2021 on sports sponsorships, of which $ 13 million in transactions will expire this year.
A Delta Airlines Boeing 757-251 is approaching 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 expiring deals. And Delta will spend about $ 70 million, with $ 14 million in expiring transactions.
GlobalData also projects that these airlines spend about $ 60 million for the combined National Football League, while the National Basketball Association has sponsorship contracts totaling $ 25.86 million for 2021.
Asked if the transactions will be renewed, Wiacek said: “It depends on many factors; mainly because of the way things open up as blockages ease and vaccinations continue ”. He added that “government support to keep airlines afloat” will also play an important factor.
As part of the $ 1.9 trillion Covid-19 aid package, $ 14 billion is allocated to US airlines, the third round of federal aid to industry. The airline’s entrepreneurs have been allocated $ 1 billion. US and international airlines serving the United States transported 398 million people last year, down 62% from 2019, according to the Department of Transportation.
In addition to the general decline in travel, the pandemic has worsened airline sports charter companies as seasons have been postponed or shortened. Prior to hitting Covid-19, airlines added services for major sporting events, such as college football playoffs.
Wiacek added that airlines could be helped if consumers start traveling, especially to see how 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 sports are the factors that drive this,” Wiacek said. “This is the positive aspect and the search for airlines – the desire to return to normal.”