The Business Edge

The Impact of Covid on the Sports Industry

April 01, 2021 Feliciano School of Business
The Business Edge
The Impact of Covid on the Sports Industry
Show Notes Transcript

Dr. Joshua Lupinek, Assistant Professor of Sport Marketing at the Feliciano School of Business, discusses how Covid has impacted the major sports leagues (NFL, MLB, NBA, and NHL).  He shares his opinions and expertise on the following topics:

·       Impact of the Covid restrictions on the major sports leagues

·       How the leagues have implemented the Covid guidelines 

·       The future of live attendance at arenas and stadiums 

·       The post-Covid fan experience 

·       Possibility of a return to the pre-Covid fan experience 

Dr. Lupinek has a Ph.D. in Sport Management from the University of Minnesota and a M.A. in Sport Management and Sociology from the University of Connecticut, Storrs. He is currently working on a Marketing Analytics certificate from Penn State University. His research interest includes VR eye tracking research that measures consumer reactions. Before joining The Feliciano School of Business, he served as a tenured Associate Professor of Business Administration at the University of Alaska, Fairbanks, where he also was Director of the Sport and Recreation Business Program, and Director of the School of Management Virtual Reality Lab.

Phil Mattia:

Hi everyone and welcome to another episode of the business edge podcast. My name is Phil Mattia. I'm here with Dr. Joshua Lubinek. He is the Assistant Professor of Sport Marketing here at the Feliciano School of Business, which is in the department of hospitality and tourism. So welcome Dr. Lupinek, thank you for taking the time to speak with us.

Josh Lupinek:

Thank you, pleasure to be on.

Phil Mattia:

So before we begin our discussion here, we're talking about how COVID has impacted the sports industry. This is our we've done several of these podcasts over the past 12 months and looking at different how COVID has impacted different industries. And this the first conversation we're having about the sports industry. And for those of you listening, whether it's your first time, you please look up our business edge podcast channel, which is on several podcasts, sites like Spotify, Amazon, and Buzzsprout. So I welcome and I encourage you to take a look at other other episodes. But today we are talking about what the sports industry and how COVID has impacted it. And Dr. Lupinek is gonna spend some time with us going through it. So before we begin, I guess the first question here is, you know, what impact has COVID has had on the the major sports leagues MLB, NBA, NFL and NHL from a revenue standpoint, I think, Josh, I'm a big fan of sports. And this is near and dear to my heart. And but I know there's some really big losses that have occurred over the past, I guess a year now because Today is March 30. So it's about a year, since COVID has impacted the world. So if you can give us a sense of from a revenue standpoint, how's it impacted? The industry?

Josh Lupinek:

Yeah, thank you, Phil. And first, I guess I'd be remiss if I didn't mention that. It's great to be a part of the Montclair State University campus. So this is my second year here, by way the University of Alaska and when we talk about the impact COVID tab on a lot of my colleagues working in the industry, they're pivoting and they're looking to get back in as the world kind of kickstarts, again in the sport industry. So it's great. It's great to be here. And you know, one of the notes that I pulled for today was, it's estimated about 14.5 billion in lost revenue from the Big Four leagues, that's kind of the COVID at impact 14.5 billion. And to put that in perspective, I pulled a kind of like a fun fact of the day and spun it to sport. So it's here, it's March 30, when we're recording here, and on this day, in 1867, the US bought Alaska from Russia for 7.2 million, right, we just talked about 14.5 billion in losses for a year across four major sport leagues, then Alaska was purchased for 7.2 million. And then if you pull that into today's money, that would equal about 130 million through inflation and whatnot. So to spend that in a sport sense. That's about what the St. Louis Cardinals will spend on payroll this year. So we bought Alaska from Russia for St. Louis Cardinals payroll, and then you think about what 14 point 5 billion how the sport industry has grown? And what that money? What that dollar amount really means? It's incredible.

Phil Mattia:

Yes, it's interesting, because as a sports fan, you think of last March, whenever the whole world was going through COVID, it was fairly, we were learning everyday what was going on, have a sports industry reacted to it, whether the whole point of allowing fans into the games or into the arenas of the stadiums. And it was happening by the hour seem like there was so much happening, and how these teams, regardless of whatever leagues they were in, how they had to react to one ensure the safety of their players and their coaches and their staff, but also safety of their fans. And it seemed like every day there was announcements coming out from different teams at different arenas or stadiums reacting to it, and it took some time for them to get their arms around that. But you know, revenue, of course, is the heart of how this industry is running. And if you could share with us give us some ideas on what these major leagues sport leads what they've lost in revenue.

Josh Lupinek:

Sure, yeah. So I have some notes on the Big Four and it's kind of interesting because league shut down at different times the world kind of stopped at the same time and in for me, that was March 11 it was no comparison obviously to 911. But it was one of those moments that I'll remember where I was when the NBA pulled their games. And then the NHL and I was working in my early hockey game that night and I remember just being in the locker room seeing that after and being like Okay, guys, this is this happened. You guys are gonna remember this is the last game that hockey game we're gonna see for a while. So, and I say that because some, like the NHL, NBA they're mid season when we shut down, there's the NFL, if you call them fortunate, they got their Super Bowl in 2020. Before the shutdown, so different, obviously different seasons different times. But for the NFL it's estimated about 5.5 billion in revenue losses from COVID. So remember, we talked 14.5 billion, the NFL alone, it's, you know, 5.5 billion, perhaps more, and I'm just going to I'm going to rattle some numbers real quick and then want to go back to the NFL, but, you know, 2.5 billion for the NHL 3.5 billion NBA three, 3 billion MLB. And those are, revenue losses related to home games, and in some TV money when the 14.5 number really comes from as TV contracts and some, some other things that aren't related to tickets and gate receipts and hosting, right, so So let's go back to the NFL for a second, right. You know, what impact has it had? Well, we're seeing right now, a very strange salary cap year related because the salary cap, how they, if you're not a big sports fan, salary cap is kind of the maximum amount that you can pay your roster for a given season. So you know, you kind of take your star quarterback, and then in the NFL typically is the highest paid player on the roster. And then you kind of working backwards and everybody is coming up for contract renewals at different times and free agency and all that, but the salary cap is tied to revenue. So now, for the first time in history, the NFL has a lower salary cap, going into this upcoming 20, Fall of 2021 start of the season never happened before probably will never happen again. But because of the loss revenue from last season, teams have less money regardless of how much, how wealthy an owner is, they're only allowed to pay their roster X amount of dollars. And that's the salary cap. So now they have to look at cutting costs. So I bring to example in the NFL, the Patriots, the New England Patriots free agency, anomaly typically, the New England Patriots do not spend a lot of money in free agency, if you're a big football person, you kind of know that they're not out there signing, you know, star players to large contracts in free agency, they're always looking for bubble talent, you know, perhaps the, you know, the player that, you know, 30, you know, 28 teams kinda kind of passed on, but they have super high potential and value signings is how I would kind of display that. So because of that they've stayed true to that strategy, whether it's the right or wrong strategy, you know, we learned we talked about in in class and the Feliciano School of Business all the time, you have to have a plan, you have to understand who you are as a business, you have to understand who your customers are and what your mission is. Are you out there to make money? Are you out there and win championships, okay. The Patriots have a business strategy, they've developed that strategy, and they've stuck to it. So regardless, if you agree to it, the New England Patriots are very refined and steady in their business strategy, per our external view, right. None of us work for the New England Patriots. Maybe some organizational representatives will be listening in to the podcast. But, you know, I can't speak to the inside of the walls. But in nine days, the Patriots spent $159.6 million dollars to overhaul their roster. You know, they are in a position to take advantage of this weird market blip because of COVID based on a business strategy and identifying these high potential value signings, because with the salary cap going down this year, one time, all these other teams who would normally be going after these star players do not have the money available to sign them. It's unfortunate for those players that randomly came into free agency during a down market year, you know, you feel for those players not being able to capitalize on perhaps their 2018 or 2022 potential. So maybe they're signing shorter term deals because they're hoping to maybe we'll you know, gonna make less money because of COVID revenue decreases. So maybe they're shorter contracts, but now knowing that knowing what Patriots are able to sign a higher caliber of player because they have more cap space so they have more money available to fill the roster and we might never see this again. I'm not saying it's good. It's unfortunate, obviously, for many parties, but the New England Patriots are actually able to capitalize on that. That's not what the country wants to hear after seeing the Patriots win so many Super Bowls over the years, but they didn't make the playoffs last year, I think they need some help. But I don't think the world's ready to let him be helped yet, as far as from that we put our fan hats back on, but they have a business strategy that they've stuck to. And they've had revenue losses. And their owner Robert Kraft came out and said in, in all my years of ownership, I've never been asked to come out and put up this much capital in such a short amount of time. But, you know, it's not much different than playing the stock market and, and taking advantage of an opportunity that falls in your lap. So the NFL 5.5 billion in revenue losses. Advantage normal patriots and nine days. So interesting.

Phil Mattia:

You know, it's amazing is or sad is part of these revenue losses with people fail, or some people maybe don't notice is that in these arenas, and stadiums, there are 1000s of employees that work there that are ticket agents that work in the concessions, or they are security, they lost their jobs within a matter of days. You know, and these are, these are individuals that are not making hundreds of 1000s of dollars. And they were without jobs. And, and that's it was a sad situation, because I know some of the teams from what I heard, they were they were helping, or they were giving them some type of severance or helping their employees out during this time. But it really affects everyone. And you mentioned 911. And one thing that I remember of 911 when the the New York teams weren't playing for a few days, the Mets and the Yankees, and then eventually baseball went back on. And it really was a diversion. Think of the how horrific that time was in this country, especially in the New York area. But to be able to turn on the TV and watch a Met game or Yankee game really took your mind off of things. And that really helped people to kind of mentally for that hour, two hours. And I thought about that when you said that regarding COVID, where the leagues weren't playing. So not only we're dealing with this horrible situation where you have people getting sick and dying. There was nothing really to divert our minds for that evening to put out a basketball game or a baseball game. And so sports are part of the fabric of this country. And in the fact that and I remember ESPN had nothing to show and they were showing games from years ago where they were showing games from other countries that weren't they at one point at the ESPN was showing some baseball games from different countries, I think at one point because that had nothing to air on television. But people were just hungry for sports. And just especially during this during this time. So

Josh Lupinek:

Sure that and thanks for bringing that up, Phil and you know, not discounting any of the negative and you know, our hearts go out to so many. But you know, we're here talking today about Sport and Sport and the fun side of why we all enjoy being fans. And one of the most difficult parts of the beginning of the pandemic shutdown in March was, okay, now we're all in our residences. And normally, I don't have time to watch TV. Because I'm in the car, I have a commute. You know, we're working at a sporting event, but all of a sudden, the one time we have time to watch TV, there's nothing on if we are a sport fan. There's no live content, right? You just made that ESPN example. And it was just a really strange and unique time. But I want to bring back to the first part that you said as far as lost jobs, and that there is a light at the end of the tunnel. You know, I don't know how long this podcast will have legs. And for our listeners out there who are listening and in 2022 and beyond. In our class, I won't mention for confidentiality, which team it was but one of our New York baseball teams was was in our sports sales class that we have here in the Feliciano School of Business three weeks ago. And it was an inside sales manager. And he was very grateful that his organization only cut 25% of their staff that is a lot less than many, many up to 75%. Across MLB in a temporary shutdown scenario. So obviously there still were cuts. There were lost jobs, but they're out there right now, recruiting, they don't have the jobs to offer, but they're building a database of talent because they are a month away or so from starting the sales season for 2022. We haven't even broke the first pitch yet of the major league baseball season. Yet, we're out here talking about ticket sales for the summer of 2022. Because they're essentially saying whatever we get this year, it's going to be fine in 2020. We have the season ticket base, Nobody sells out 100% of their season tickets. That's bad. That's bad business because you want single game sales and a lot of other reasons, which is why it's a great class. And we have great students, but they will have the season ticket base to support whatever capacity they're at their pushes already 2022 in the hope of the vaccine normalicy and things like that. So our students, my colleagues, who are currently looking for that next spot, there's light at the end of the tunnel. We're just, you know, we're still we're still reaching for it. It's not here yet the end of the tunnel isn't here so still holding my breath. But it's coming.

Phil Mattia:

Well, the the biggest global event, biggest global sporting event that all countries and most countries participate in is the Olympics. You know, Tokyo 2020 did not happen, obviously. So what's going on with with the Summer Games? And is that gonna happen this year, next year? And what are some some of the implications of that that cancellation happened last year?

Josh Lupinek:

That's a great question, Phil. And, you know, Tokyo 2020, is now Tokyo, 2021. By all accounts sitting here, on the 30th of March in 2021. It's going to happen. And a lot of that success goes to the Big Four leagues in North America, some who participated in a bubble environment, and some who have not, we're currently winding down our March Madness tournament, which has never looked this way before. But I believe that we're all grateful for those student athletes and providing that live entertainment source even if we're not able to be there. But the athletes are going to be able to compete it looks like but what's really interesting is, at what capacity are these events going to be? How's the IOC? You know, they're able to fund through broadcast rights across the globe for revenue for receipts. And it's, it's interesting you ask is earlier this month, I was reading an article that Japan made the call to block international spectators from attending the Olympics and the Paralympics. So those happened kind of a couple months apart, over in Tokyo due to the pandemic. And you know, it's just led to a flood of refund requests, requests, excuse me. So if you were, you know, from the US and you were planning to go to Tokyo, you're probably not going by yourself, part of a group of friends family. So, you know, this article talks about how it's more than $10,000, in some cases, refund requests from fans that purchased tickets years ago, they've been holding on to that money and hoping. And now they're trying to get that back in. And what's really interesting is co sport, which is the acoust sees me exclusive rights holder for the Olympic ticket. Oh, man, let me let me go back and restart that sentence, it happens too much, you get to go and get excited. So co sport is the exclusive rights holder. There we go for ticket sales at the Olympics in the US got that one out. So they announced that they are not going to refund their 20%. That's high 20% handling fee for American fans. And this is per a Yahoo article, by the way, if you want to fact check me. And I don't know what kind of blowback they're going to get for that once the Olympics actually happens. And once this becomes more popular, right, because we're starting to lead into that new cycle for the Olympics, and it's not really hitting mainstream yet. But there might be some big blowback and they might change that policy but for right now you're if somebody paid $10,000 which many have to bring a group over you're withholding you know, $2,000 from a family and they're not able to go that just seems kind of extreme for some cases. So but that's country specific in the UK. It's a company called Team GB live and they said they'll offer full refunds so long winded answer that yes, for but the Olympics, it looks like Tokyo 2020 is now 2021 it's ago for the athletes it's a go for TV, it's going to be a made for TV Olympics more so than in the past. You think about what how the NHL pivoted their stadium series games outside to Lake Tahoe this spring where there weren't any fans but it was a beautiful backdrop. You know, it's just kind of it's kind of really interesting how we're, we're pivoting still to made for TV events in the Olympics are going to try to do that as well.

Phil Mattia:

Over the past few weeks, I know New York, New Jersey, which is where we are there they've they've loosened the restrictions so I know that the Yankees and Mets they're gonna be allowing fans into the stadium I think 10% and the Brooklyn Nets and so I know they're they're allowing fans to come back in. But some some people may argue and I've heard this is there's a fine line because when owners obviously want the games to be held and they want the basketball, baseball football games to happen. And we as fans, we want to watch it on television, which we still are, but is obviously no fans or limited amount of fans. But there's always that argument of and I've heard this from a tag. And so we'll say, Well, you know, we putting our players and staff and fans at risk even at all be at it at of 10, or 20% capacity of an outdoor stadium or indoor arena, simply to make owners money, because ultimately, that's who's making the money, I mean, obviously creates jobs, which were happy about or brings jobs back, which which it helps people that are unable to weren't able to work have no fault of their own simply because of the restrictions. But the winners in all of this are the owners, they're the ones who make the most money. And obviously, the players make a lot of money. But do you get a sense that owners are clamoring for these games to happen simply because they're losing, as you mentioned earlier, millions or billions of dollars, or do you feel that it is safe. You know, you and I live in New Jersey. So you know, I know there's there's sports happening every day and fans are coming back. But do you think we're doing that at the expense of the safety of the fans and the staff of the players by putting bringing these people back into the arenas in the stadiums?

Josh Lupinek:

What a great question. And that is a really muddy one Phil, and I'll do my best. This is opinion based. I don't want to get into politics and vaccine talk and all that. But it's all it's all a part of this, right? So we can be as mad as we want about the owners for making money. They lost their butts last year. And fortunately, they have more than one cheek to sit on because they're doing pretty well alone in these teams. But hopefully it's just a blip for them. I like to think of it from a consumer perspective. If my father and I are both vaccinated, one from being of a certain age and one from being a teacher, right or wrong, if that's the way it is. And we feel comfortable enough to go attend an outside baseball game together. Why Why not? Why not leave that on the individual? Why not say, you know, I don't mean to be morbid here, but like how many years of life are we willing to give up before choice and what it means to be an American and make those choices for yourself really digs in? So I'm not saying it's right or wrong. I'm just saying that. As you know, it's way different. It was way different in New York than it was in Florida through the pandemic, right, right or wrong, not touching it. But what I will say is that, as an American, I believe it is our right to choose our own risk assessment level for our daily activities. So as if that's my perspective, as a consumer, if you're sitting there as an owner, you know, we're following the CDC guidelines. You know, we, organizations, many of them have gone above and beyond to provide additional experience for their normal season ticket holders or give them value and future years and, you know, make them feel a part of the family of the organization. But if, if there are people out there that feel comfortable and safe, whether it's right or wrong, why not be open for business and provide that as long as you're following the rules? So I don't think I answered your question directly. But you know, I'm just providing an opinion from a consumer perspective on I'm not saying what the right risk assessment level is. But I think you got to leave it in the hands of the consumers as right to choose.

Phil Mattia:

Yeah, and of course, these teams are following CDC guidelines. So they're, they're keeping that in mind. It's not like they're, they're deviating from what what the CDC is recommending, you know, in this well, I'll make a statement, then we'll get to the next question. This happened what March Madness last year, the NCAA, which we'll talk about bad timing. I mean, that's that's a huge, huge event. And I remember early on, NCAA canceled, they had, their plan was to keep the games but don't bring in the fans. And then a few days later, I think they just canceled the entire tournament because of pressure they were getting at the other other leagues. So it's it's a touchy subject. And I think we're definitely a better place than we were a year ago. And we'll see how this all plays out. The good news is things are getting better. And I think the team's because I read yesterday with Major League Baseball, they even came out with a rule that if 85% of the team players and the staff are vaccinated, that when they're together, they don't have to wear masks any longer. They could pretend this 2019 because 85% of vaccinated so it this is and they're planning on when these teams come back to their home stadiums which will come back this week as the season begins. I think Thursday or Friday, that the players, they'll be, they'll be able to be vaccinated. So hopefully if they get to the 85%, then players in the staff and coaches and managers there can all kind of, but then when they leave that little bubble, they'll have to put mass on and be socially distance, because it'll be interacting with fans and the general public. So the guy yeah, no, you're right. So it's a it's a very complicated subject. So let's talk about how it

Josh Lupinek:

May I comment on that ( for sure) Yeah. So one of the things too, is the key point to remember back is it was the availability of test testing availability was a big thing. And that that was part of what shut down the NCAA tournament last year. Because why should sport talk about the luxury of having this conversation as a first world problem? discussion, right. But think about why should testing be a year mapped for the NCAA Basketball Tournament men and women when other people need it critically? So we're moving past that, like you said, We're going in the right direction. And in the spirit of giving opinions. Unfortunately, I don't think it's the last pandemic of our lifetime. I think it's the first but this is hopefully going to dictate how we respond and handle it better in the future.

Phil Mattia:

Which leads me to my next question, which is which league was most successful in managing COVID especially on the impact on their players and the season of the four majors?

Josh Lupinek:

Well, the easy I, I don't know which one is most successful, but definitely which one was most fortunate has to be the NFL. You know, I'm a hockey guy. I love golf. And, but the NFL is my favorite sport to watch on television. You know, but they were the most fortunate they got their 2020 Super Bowl and right before the official pandemic, there was some slight discussion and concern. And then talk about scheduling luck with 2021 being scheduled in in Florida, you know, if it was scheduled in a different state, the state government might have might have shut it down. But Florida had a different viewpoint on restrictions and they have an outside stadium. You know, if it was in the new stadium in Minneapolis for the Vikings, it probably wouldn't have happened there, they would have had to shift it. So they were the most fortunate because they got in their 2020 championship and then their 2021 scheduled to be outside and then they were able to let a limited number of fans in to experience and also hats off to the NFL, they did a great job with the the cardboard cutouts and everything from a TV made for TV perspective. You know, I, my wife came in I was like how there's so many people there, you know, you're just walking by, right. So they did a good job visually for TV, but they were definitely the most fortunate, the best, the most success and we're taking money out of it not in terms of revenue. But the most successful restart in the pandemic, in my opinion was the NHL and how they restarted in a pure, real bubble scenario in Edmonton. And they got through their entire revamped close to regular season. They kind of did a little different. And then their playoffs was zero positive cases up in Edmonton. And that's, that's incredible. That's a hats off to the NHL, and everybody in the city of Edmonton. MLB was probably the biggest mess if you want to think about the other side of the coin. But they were the first non bubble attempt. So hats off to them for giving it a try if they felt comfortable, but they had a lot of you know, they had a lot of issues. And you know, they got through it, but it was a mess. And then, you know, probably the best use of resources would would be the NBA because thinking about the difference between an ice rink and a basketball court. You know, it's a little bit different of a setup, and how they moved to Disney in Florida. And they had all those made for TV courts you saw throughout their restart and in playoffs and ballrooms. So hats off to Disney and the NBA and that relationship with ABC, ESPN for making that happen when, when there was a time when, as America if you were a sport fan at all, regardless of sport, I'm not a big basketball person. We needed that content. We needed that live content in our lives to provide that little bit of normalicy for a few minutes. So those are some thoughts there.

Phil Mattia:

I'm not sure if you felt the same way but watching a game whether it was baseball or hockey or football whatever game without fans it was just different. And when you're at home watching it, it wasn't as exciting. It seemed a lot different to me. I'm not sure if you had the same feeling I still watched it but some you just realize how much the fans play a part of the game and when they're not there you know when you can actually hear quarterbacks yelling out plays and guys yelling to each other on the bench and that was kind of cool hearing all that but then again, you missed the fans, right? It seemed like so different.

Josh Lupinek:

Not only do you miss the fans, it actually has a minor impact to the game outcome regardless of sport players, coaches officials, they feel the pressure you don't necessarily hear the one comment Konya bomb. Sometimes you do if it's well timed, but you know, you feel the pressure building, you hear the roar that can impact a player you think about in football, you hear the roar that gives somebody a little extra juice to get an extra half a gear in on a punt return or the pressure that can put on a pitcher in Major League Baseball, you know, or an official even or how a coach interacts. And the pressure you think of one of the biggest criticisms we have of NFL coaches is their use of timeouts. We're all timeout coaches on the couch right in the NFL, but there's so much going on and pressure can dictate that. So I'm not saying you have to have a different champion a different outcome in any League, but there's a very micro level that actually impacts all stakeholders of the game.

Phil Mattia:

Yeah, good point, because there really was no homefield advantage, because every every stadium or arena was kind of a neutral territory. So that's

Josh Lupinek:

you just had a locker room advantage.

Phil Mattia:

Yeah,I mean, the one and here's an unrelated question, because I just have to ask you this because I know you're a Patriots fan. And you mentioned the 2021 Super Bowl. So how did you feel for Tom Brady when he won a Super Bowl year out if the leaving the the mothership of the Patriot or organization? Were you happy for Tom?

Josh Lupinek:

Well, thank you for bringing that up for our audience. I feel I might have lost a couple people just turning this podcast off now. But I'm from born and raised Connecticut so our split state my wife's a Giants fan. We have the wicked line running down 91 But anyways, I'm proud to be a part of the mothership. We were very bad in my childhood. So did we deserve to be this good for this long? Probably not, but it is what it is. And I was happy for Tom Brady. At that point when you had that Super Bowl matchup I was rooting for the Bucs because of Tom Brady. I don't wish any like Brady is better than Bella check or vice versa. I don't really get into all that I kind of wished it was a patriots box. Super Bowl. You know, that would have been just awesome. But you know, that wasn't that wasn't meant to be but, you know, I don't I don't hate the move as a business person as a marketing person. You know, you get older the bones get tired. No state income tax in Florida. It's nice.

Phil Mattia:

Yeah, it's hard feeling sorry for patriot fans when you hear them crying about you know, their bad season and they lost Brady. I'm like, you kidding me? You want to leave? I'm a Giants fan. So I'm not a big fan of the Patriots. But I'm like you want me to feel sorry for you with all your titles like you know that. That Run that Brady had will never happen again. I think we can all agree that you'll never see that dynasty in professional sports, especially in football because of salary cap. And you know, the average career of a football player is what, three or four years. So you guys had a good for a long time.

Josh Lupinek:

So in speaking a dynasty, something I saw the other day was interview with with Cal Ripken and you forget about his impact on baseball and being the Iron Man like 2007 games, I forget the actual number. And the current. The current Ironman, Ironman and MLB is like 300 something he's only 14 seasons away from catching cow. So what incredible run that is. And you know, there's just certain things in life that you'll probably never see again. And I agree that's one of them.

Phil Mattia:

Yeah, that's definitely one of them. And I do think the spending well, it'll be interesting to see what the Patriots do with respect to quarterback. I know they resigned Cam Newton. And there's rumor that they're going after quarterback in the draft or potentially getting Jimmy g back from from the 49 or so. What do you think's gonna happen there, who's who's going to be the starting quarterback in September?

Josh Lupinek:

I like the hyperbole around Jimmy g coming back. You know, he Bello chec groomed him and he understands he could call it the Patriot way or just the system and the ways that that team operates and if that's a good fit for Mr. Garoppolo, then it's definitely a good fit for the Patriots. As far as a fan, like just put my my Feliciano School Business cap off and put my patriots hat on for a second. I was happy to see the Cam Newton signing and I'm glad that he's back regardless of his role as a starter or a backup. He struggled last year last season for sure. But you can't deny that man's work ethic and I can appreciate that.

Phil Mattia:

Yeah, it seems that that's the direction and that's why I think Brady was I think even more satisfied because winning Super Bowl outside of New England because he was outside of the system he didn't want, prove that the system is out the reason why he won Super Bowls because he now wanted with a different team at 43, 40 however old he is now so

Josh Lupinek:

Sure. And lastly to that. Phil, you talked before about we talked before about the salary cap blip and the Patriots taking advantage of that the roster for Tampa is loaded compared to what the Patriots ever was. So there was some advantages there. And I'm sure those sessions happen behind closed doors. And Brady says, Hey, I'm willing to come this is what I would like for a commitment and looks like they made that happen for him.

Phil Mattia:

Yeah, I think I read yesterday that the first team that brought back all their starters for 2021 for the season, the first Super Bowl winning team has brought back all their starters. So they're gonna have the same exact team in for the 21 season. So, alright, let's talk about the future. What is the future of live attendance at these arenas and stadiums? And how will it be different than pre COVID?

Josh Lupinek:

I guess the biggest example right now is just thinking about MSG, and the Rangers and other indoor venues, just showing a negative test result to gain entry is really interesting and that has had a boom for a lot of private testing and medical companies that weren't really in the sport space, but now are when you think of different apps, and the ease ability and integration in New York State, you know, you have access to free free testing, just like in New Jersey, but those results can take time, right versus say, a rapid test and where can you get those. So there's a new inventory in the sports space. And that's testing and hopefully, that inventory goes away in the future, but it's just going to be an ill defined complex, constantly changing problem. You know, I borrow that from professors riddle, and Weber way back when in Cal Berkeley, when they define that as a wicked problem. So I mentioned that I don't believe this is the last one of my lifetime. Unfortunately, it's just the first, but we're going to be way better equipped to handle it in the future. So what does that future look like, because of the pandemic, teams are completely revamping ticketing software they didn't have to before but now they're, they're pushed, you got pod purchases happening now. So now you have software where you're able to share it, Phil, we are going to go out to Yankee Stadium, I could share you my Miami code and you can see exactly where I'm setting you can see up on the left hand and right to me before the pandemic that no way you know, who who's buying me or you, you know, like you, you give me some money and I'll hop on Ticketmaster, you couldn't even have that functionality. So now, you can also do that for a whole family when you when you think of a pod given availability of inventory and everything. So this is really true in the minor league or non sellout mentality where, you know, the team is going to have that space where you say, hey, season, season ticket holders, we got some extra space here. You know, we're gonna open up a couple seats on either side, if you have anybody in your family pod that you want to get in. So that's there's just enhanced ticketing is, is really changed. And for the better, you know, go ahead. Sorry.

Phil Mattia:

No, no, I'm sorry. I think what, you know, one of the things and this is not a discussion on sports, but this whole idea of a vaccine passport that a fan can because like you and I we obviously trust science because we been vaccinated. But I think that if the CDC came out with the fact that if you're vaccinated, we know that we're 90 to 95%, immune based on a Madonna and Pfizer or Johnson, whoever, whatever vaccine you're getting. But at once CDC comes out and says that you can transmit the virus. I think that's a game changer for sports in anything, any any large venue with 1000s of people because then you're saying, well, you prove that you're vaccinated with a passport, whatever you want to call it. And then I think that makes it a lot easier for people to say, Well, I know I'm vaccinated, I can prove it. And the CDC came out with the fact that I can't transmit it even if I do. I'm a carrier of it. That's a big deal. Because, you know, I've read about that come into an arena and showing that you have a negative test. But you're negative of three days ago, because you take you're taking the COVID test three days and typically takes two or three days to get the results back. So is that really an indicator of you? Because you could have COVID? Right, you know, it's like you're being tested that moment. It's not like it's a swab test or a rapid test. So I think the CDC has a big part in all this. That's my point.

Josh Lupinek:

Well, first of all, I made my choice. And I feel like it's personal. I think that you couldn't sell me on the not side of the vaccine. But I do understand some of my colleagues and other people who are hesitant, reluctant or have decided they're not going to get the vaccine. I get it. I really I really do. And I don't say that that choice is bad, but there's a lot of I don't think that choice is for the masses, right? So there's personal reasons not to do that. And I totally agree with those. My point related to what you said Phil was that once every American is eligible to get the vaccine if they want, once they have that choice, that's the tipping point, because you remember, we're doing things restrictions based on CDC, what is safe with a vaccine framework. And if you are choosing not to get the vaccine, you are essentially saying that I'm okay with the risk of COVID being in the world and normal exposure through my everyday life. So if you make that choice, and then you attend a sporting event, then you are adding that risk. Sure, but you've already made your choice on that risk. So as a team, you don't have to worry about people who are not going to get the vaccine. So I don't think you have to worry about that population, which I understand or respect for, for different reasons. The Tipping Point is once not scheduled once every person who would like the vaccine is eligible to have gotten it. That's the tipping point. I don't know. Right. Like, you know, the President made made his talk and, you know, Fourth of July goal and all that, but kind of makes you hopeful for Christmas next year. As far as that tipping point.

Phil Mattia:

Yeah, it's more of a question of perception of safety. So even when, hopefully, we get to a point where we can go to games and feel safe and not have these restrictions, but it's always in the back of our mind. People always going to be afraid. It's never going to be 2019. Again, it's that's gone. And I remember when there was a 14 day lockdown back in March of 2020. And we all thought that after 14 days we have to go out of our homes and live our life normally was obviously we, it didn't happen because there were additional lockdowns and quarantines. But I think it's more making people feel safe. And it's analogous to 911 making people feel safe to fly again. And I remember weeks and months after that people were afraid to fly obviously understood that of fear of terrorism. I think it's the same thing now with with COVID. Having people feel safe, like Mayor de Blasio mentioned that Broadway's in open backup in September. And of course, will be different restrictions of such but you're still gonna have the people that are going to be afraid whether to vaccinate or not, they're going to be free to go and I think that's natural. And that's going to take time. And hopefully we get to a place of herd immunity where we're 70 or 80% vaccinated and that that point per the CDC, we can take our mask off, and then we'll be fine. But we'll see when we get them. And again, it's always that the perception of people being afraid if something's gonna go wrong, or they're gonna or gonna get infected. So let's let's wrap up here on the last question about how the fan experience change and post COVID by each league. So kind of top line by each league, how's it gonna be different?

Josh Lupinek:

Sure. You know, NFL more open or Super Bowls, for sure. For planning, I'm going to try to push those more outside it gives them more flex than a dome. The NHL just had a new TV deal with ESPN, they're coming back to ESPN ABC seven year $2.8 billion deal. And, you know, there's going to be more TV location based outdoor games, in my opinion made for TV events with limited spectators, the spectators you mentioned who are still going to be afraid we're in a better place to accommodate those that obviously that might come with additional cost to the fan. But there's a way now we understand how to make safe I've and if you want predictions. America is never going to be healthier for the next three years after this, because of all the hand sanitizer and everything in place. We take better care of our hygiene now than we ever have in our lives. And that's going to take a while to slip back. So when you think about those overall stats you hear to hear first being here yet so the NBA, I think there's gonna be less access to players courtside, which is kind of interesting, more AI based camera angles. They've been experimenting through the pandemic with no fans and positions and cameras that normally would impact sight lines. So I'm interested to see how they integrate those back when there are sellouts again, MLB I'm not sure. But there could be more doubleheaders. I don't know. But for right now, for the short term, you have the increase screening difficulty of getting in and showing a negative test and all that. You know, that could lead to fans wanting to go less, but stay longer perhaps because of the difficulty of getting in. Perhaps you could have a unique promotion where you could have a bleacher premium swing on a day night doubleheader. You know you could have the bleacher seats in the afternoon and then an inclusive premium club for dinner, something like that. But one of the things that's really going to be interesting to see, Phil is when we look back at youth sport youth sport on its own is a $19 billion industry. So think about the kiddos that didn't play sports last year. Then think about the kiddos in that four, five six year old age range, who had tried something for the first time and found out they liked it. Right? I mean, we all know that you don't need to you shouldn't specialize as a young kid, but you get an interest spark somewhere. And that could impact different sports generating fandom. Also, you know, because you get fandom from playing, we don't often get fandom from playing NFL. I didn't, but other sports you get an appreciation for. And then you know, lastly, when you think about fan experience, change, more multipurpose stadiums. So the Real Madrid just, they're building a casino inside their state stadium. I was reading an article this morning that they they're vamping with a full service entertainment center, where a famous soccer team happens to play. So it might be vice versa. And you know, that'll finish summer 2022. The Washington Nationals plan to set up betting windows and kiosks and National Park and working without betting directly from the seats, the NFL, however, right like they're still prohibiting, and stadium betting areas and kiosks but will allow what they're calling gambling lounges. So take that for what you will right now. But that will showcase more betting options. So we're moving in a more gambling friendly environment. And part of that is because that $14 billion loss revenue, the league's are a little hungrier for that income source. And that's going to change the way that our fan experience changes. He said it's gonna impact the way our fan experience changes in the future for sure.

Phil Mattia:

It's funny, you bring up youth sports, that that that like for my son, he's now he's six, but he didn't play sports last year. And now they're playing soccer in a few weeks whenever it starts. But it was 80 bucks for him to join the league. And then you know, the $50 for the cleats, and then the $10 for the ball and the $25 for the shin guards. And if you think of you multiply that by the hundreds of 1000s of youth of kids playing in these little leagues, what the implications are from a revenue standpoint, but your your point about exposing children to different sports and seeing what what they gravitate towards, and what they like and how it relates to fandom is a interesting point. I never heard that one before. But my final question is, and this is your opinion, obviously, because we're in the midst of this. Will we ever do you think get back to the 2019 where you just hop in your car, drive to a stadium, go through security sit in your seat, and you have 1000s of people around you cheering and clapping and heading up to the concession stand for a beer you're around 25 people and walking out with everyone, what do you think we'll we ever get to that point? Where people are comfortable or not afraid? And will that ever happen? Again? It's a pain.

Josh Lupinek:

It's my opinion? Phil? It's a great question. I think we will in it's going to be 2022. But it's never going to look the same. In what I mean by that is think about the uproar. We're selling jersey space for the NBA the NHL for selling ad space on jerseys, right? We want to clean professional North American uniform. Think about, um, you know, this is our North American hat or U.S. hat like Oh, man, you know, when we used to travel International, you know, you go in the Asian market, and you see a lot of people wearing masks. So it was normal over there. And we like what's going on here. Like it's weird, it feels uncomfortable. Why are you wearing a mask. Now, we will be shoulder to shoulder but some people are going to be wearing masks and some people are not. But there's not going to be as much of that public stigma anymore. And when you think of like a clean image clean is probably not the right word here. But when you think of an image of what it looks like to put 80,000 people together in a packed college football stadium and the SEC, like you would not find one person wearing a mask for any reason whatsoever. I don't know if you'll ever see that again. And there's nothing wrong with that. Right? Everybody's gonna have a different risk assessment level moving forward. But like I said, in our lifetime, I don't know if you'll ever get at 100,000 people together and have it look the same anymore. But yes, we will be rubbing on somebody is going to spill beer on us again, it will happen. I promise you that.

Phil Mattia:

And you know, it's also predicated upon the vaccine and how how long it may be, you know, we have to get a vaccine every year I may need a booster or made it I think that's still haven't figured out yet. So the impact or how long the vaccine lasts and your body with the antibodies are. So if we find out we have to do is every year the vaccine is every year that may change things or maybe we may find out that the vaccine lasts more than a year maybe a couple years. So yeah, there's a lot of variables here that we don't know about. We will we'll find out. But yeah, I'm a giant season ticket holder. Yes. You can say you're sorry, sorry. Yeah. We had a good offseason. We have big big guys coming in. Now

Josh Lupinek:

we've got big moves Yeah.

Phil Mattia:

We'll probably be six and 10. This year as opposed to final leving quick plays. But, you know, we received a letter from ownership a few weeks ago as a season ticket holder saying that they're anxious and looking forward to bringing us back in September, but obviously, following the state guidelines. But how do teams figure that out? Let's say in September, only 10,000 giant fans are coming to the end to MetLife. How do they determine which 10,000 fans get it? Is it a dumb question, but how do they do that?

Josh Lupinek:

It's actually a really hard question. It's not a dumb question at all. So it's organization dependent. So first off, to answer that I'll say, since we're at the end, shout out to Mimi and Edwin Feliciano, that I have an amazing job. In our business school is big resource for everyone on campus, regardless if you're a business student or not. But all my classes here, super awesome, super fun. We we've had in my two years here, we've had, we've worked with the Jets, we've had the giants in you know, and the organization's they're in the same house completely different, right? So because of that, they have to understand who their organization is. Yet, it all comes back to the 8020 rule of business where 80% of your revenue comes from the top 20% of your consumers. So you could sit there, Phil and say, Hey, like, you know, I'm a valued season ticket holder, but I'm wait, I'm way up, you got somebody paying 50% more, they're doubling their tripling? Yup, whatever. So do the organizations look at those people differently? Do they give them first crack? It depends. Not every, every each organization decides they can be completely equitable, and have it be a lottery system, they could have priority waiting lotteries in in between the priority waiting, not that much different than when a team builds a brand new stadium and the seats don't align, and they have to move season ticket holders and they're not exactly the same, right. So it's, it's really tough, every organization is doing it differently. But in general, every team is still that I've heard is still catering to the top 20% and giving them first crack. And it's kind of even in that there's still some lottery based selection there. But we're moving towards a different different direction. And at the end of the day, it's about the foundation that you have a season ticket holder base Green Bay is going to do a way different than the giants and the Jets are definitely gonna do way different than the Giants shout out to the Giants great family organization. Top Notch that, you know, the Jets are, are grinding to. But it's been a pleasure to get to know those guys out back in this tri state market.

Phil Mattia:

We just got to win some games, and we have to get back to the playoffs eventually. So I wouldn't miss going to games this year, simply because I think we'll have a better year but i don't i don't think it's a playoff year. But we're getting better. I believe in the coach and I believe in some of the signings, hopefully the draft works well for us. Alright, let's wrap up. So, Josh, thank you. This was a great discussion about COVID and the impact on the sports industry. And I encourage everyone to join us on the business edge podcast channel. Check out some other episodes about the economy and the stock market. Retail advertising we've done we've done some really interesting conversations. So any final words before we close up here?

Josh Lupinek:

You mentioned diversity of topics there for any students listening out there if if I had one piece of advice, if something business related non sport to help you in your future sport, industry, job search because a tough industry to break in, checked out our cryptocurrency discussions and things like that, because regardless of if you care, you need to at least have a basic knowledge. You know, you have owners out there like Mark Cuban and the Dallas Mavericks saying that, hey, we're gonna accept cryptocurrency as a form of payment now, are they doing it just at the new cycle, perhaps but they have a, you know, a different style of owner there. But this isn't something that's going away. So as a business student, it should at least be something you're aware of that what a decentralized currency actually means.

Phil Mattia:

Great. So thank you all for listening and everyone stay safe.

Josh Lupinek:

Thank you.