Mr. and Mrs. Met pose onstage at Delta Air Lines’ unveiling of the ‘Let’s Go Mets’ plane 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
While US sports leagues continue to welcome fans to stadiums, the effects of Covid-19 are still present and can disrupt airline sponsorship revenue.
Data analytics firm GlobalData projects sports leagues worldwide will suffer more than $ 300 million in sponsorship losses and “will likely see a broad withdrawal of the aviation industry from its sponsorship commitments” as the travel industry recovers from Covid-19.
“Given the damage done to the industry following government-imposed lockdowns around the world and the subsequent decline in international travel, airlines, even those who can rely on sovereign wealth funds, have seen drastic losses and job cuts,” wrote Patrick Kinch, a sports analyst at GlobalData. “As a result, in an effort to recoup costs, it is likely that the aviation industry will withdraw from its current sporting commitments.”
Kinch added, “Rightsholders will face the challenge of either finding an industry less affected by the pandemic or accepting diminished value for their sponsorship.”
GlobalData released its findings Thursday and estimates global airlines will spend approximately $ 737 million on sponsorships by 2021. And of that figure, US sports leagues will receive about $ 197 million in fees for deals with American Airlines, United and Delta.
In an interview with CNBC, Conrad Wiacek, chief of sports analytics at GlobalData, estimates that United Airlines will spend $ 29 million on sports sponsorships by 2021, of which $ 13 million in deals 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 deals expiring. And Delta will spend about $ 70 million, with $ 14 million in deals expiring.
GlobalData also projects that these airlines will jointly spend about $ 60 million on the National Football League, while the National Basketball Association has sponsorship deals totaling $ 25.86 million for 2021.
Asked if the deals will be extended, Wiacek said, “It depends on many factors; mainly how things open up as lockdowns get easier 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 has been set aside for US carriers, the third round of federal support for the industry. Airline contractors were given $ 1 billion aside. US and international airlines carried 398 million people last year, a 62% decrease from 2019, according to the Department of Transportation.
In addition to the general downturn in travel, the pandemic rocked airline sports charter businesses as seasons were delayed or shortened. Before Covid-19 hit, airlines had added service for major sporting events such as college football playoffs.
Wiacek added that airlines can be helped as consumers travel, especially to watch sports teams play. If demand increases, airlines can keep some of their sponsorship deals.
“People will want to travel; they will want to fly, and things like sports are what drives that,” said Wiacek. “That’s the positive thing and what airlines can look for: the eagerness to return to normalcy.”