Mr. and Mrs. Met stage the presentation of Delta Air Lines’ “Let’s Go Mets” at JFK Airport to celebrate the team’s return to the postseason on October 6, 2015 at New York City.
Brad Barket | Getty Images
While U.S. sports leagues continue to welcome stadium fans, the impacts of the Covid-19 are still persistent and may interfere with airline sponsorship revenue.
Data analytics firm GlobalData projects sports leagues around the world will face more than $ 300 million in sponsorship losses and “will likely see a broad withdrawal from the airline industry from its sponsorship commitments.” as the travel industry recovers from Covid-19.
“Given the damage done to the industry following government-imposed blockades around the world and the subsequent fall in international travel, airlines, even those that can rely on sovereign wealth funds, have suffered drastic losses and job cuts, ”wrote Patrick Kinch, a sports analyst at GlobalData. “As a result, in an effort to recoup costs, the airline sector is likely to withdraw from its current sporting commitments.”
Kinch added: “Rights holders will face the challenge of having to find 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 approximately $ 737 million in sponsorships in 2021. And of that figure, U.S. sports leagues will receive approximately $ 197 million in fees for deals 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 in 2021 on sports sponsorships, of which $ 13 million in operations 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 invest $ 23.3 million this year, with approximately $ 11 million in expiring deals. And Delta will spend about $ 70 million, with $ 14 million in expiring deals.
GlobalData also expects these airlines to spend about $ 60 million in the National Combined Football League, while the National Basketball Association has sponsorship deals totaling $ 25.86 million by 2021.
Wiacek, when asked if offers would be renewed, said: “It depends on many factors; mainly how things open up as blockages are facilitated and vaccinations continue.” He added that “government support to keep airlines in the fleet” will also play an important role.
As part of the $ 1.9 trillion Covid-19 aid package, $ 14 billion is earmarked for U.S. airlines, the third round of federal aid to the industry. Airline contractors allocated $ 1 billion. U.S. and international airlines serving the United States transported 398 million people last year, a 62 percent decline from 2019, according to the Department of Transportation.
In addition to the general falls in travel, the pandemic disrupted the airline’s sports charter businesses as the seasons were postponed or shortened. Prior to attacking Covid-19, airlines had added service for major sporting events, such as college football playoffs.
Wiacek added that airlines could help if consumers start traveling, especially to watch sports teams play. If demand improves, airlines could retain some of their sponsorship offers.
“People will want to travel; they will want to fly, and things like sport are the engine,” Wiacek said. “That’s the positive and what airlines can look for: the drive to get back to normal.”