World Series Fans a Preview of 2021 As Packed Arenas a Year Away, Fitch Says

Brendan Coffey
·2 min read

Get used to the sight of quarter-filled stadiums like this year’s World Series in Arlington, Tex. The best-case scenario for the start of U.S. sports going into 2021 is no attendance or severely limited numbers of fans, with hopes for packed arenas and stadiums postponed to more than a year from now, according to a new report from Fitch Ratings.

“Maybe if you’re the Dallas Mavericks you can get 25%; if you’re the Knicks in New York City it’s probably going to be a no-fan scenario. It’s going to vary jurisdiction by jurisdiction, but for the most part we don’t think anything above 25% is a reasonable case for Q1,” Chad Lewis, Senior Director at Fitch Ratings, said in a phone call. That means two of North America’s four major sports leagues will be particularly affected, with the NHL probably eyeing a January 2021 start and the NBA also possibly waiting until early 2021 for its next season.

“If you look to Q2, with potential extra assessing, safety and health protocols you might be able to see 50%, but building in other conservative assumptions you can also think that there will be some cities that are limiting the size of gatherings,” Lewis added. Fitch’s analysis of fans returning to arenas projects that attendance will probably rise through next year, with 75% to 100% of seating capacity being sold in the last quarter. Attendance to those levels would almost certainly require a vaccine that is widely distributed.

Lewis leads Fitch’s Global Infrastructure and Project Finance Group, which evaluates sports teams and municipalities that issue billions of dollars in debt backed by revenue generated from sports attendance and related taxes.

Still, despite the pandemic’s obvious effect on ticket sales, franchises in the major North American sports have been weathering the situation well, according to the report, since they largely had maintained enough financial flexibility to endure projected labor dispute stoppages, Lewis explained. More affected are ticket vendors like Live Nation and StubHub as well as concessioners like Aramark, which generate large portions of their core business revenue from sports attendance.

Should COVID-19 continue to spread out of control or an effective vaccine not come to market, the potential for long-term damage for sports businesses remains.

“There’s clearly been reserves and ownership support to deal with a one-year scenario,” said Lewis. “The concern: Does this become a longer-term issue? It’s not our current expectation, but if this does go into late next year and early 2022, that is when you could see some general pressure across the entire sports ecosystem.”

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