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ESPN: at least $12 billion in sports losses; a suspension of the "substitution effect"

No wonder major sports leagues are itching to return to play, with the NBA contemplating games in a single location, and Major League Baseball considering games in empty stadiums.

After all, ESPN reported 5/1/20 that the suspension of pro sports represented losses of at least $12 billion, and that sum would double if pro and college football don't launch in the fall.

That ESPN-commissioned analysis included assumptions that may not hold true, such as MLB welcoming fans back to a truncated season and the NBA and NHL moving directly to fan-free playoffs.

One reason team owners are itching to re-start: the losses won't be covered by insurance.

The revenue loss ripples down through team travel, youth sports, venue employees, and local tax collections. It remains unclear whether the public-spirited (and savvy) decisions by team/venue owners to pay workers for months will continue, given the expected lack of future game-day attendance and spending by visitors.

A new frame

Intriguingly, the article notes that the coronavirus crisis has forced a reframing of a typical critique:
Many economists believe that sports has little impact on the overall economy because of a "substitution effect." The theory is that fans seek out alternate forms of entertainment if, for example, a league goes on strike or a team moves to another city.
"In COVID-19, that issue is turned on its head," said Victor Matheson, a professor at College of the Holy Cross in Worcester, Massachusetts. "The money that is not being spent on the NBA, that's true loss, because it's not being made up anywhere else."
That means there's nothing to bet on in Nevada--except, amazingly, games like Russian table tennis.