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Historically, sports have been recession proof. I was in my early 20s when the Great Recession of 2008 hit. I first became a Washington Wizards season ticket holder in the 2008-09 NBA season, when the Wizards won just 19 games. And during a time when many people were losing their jobs left and right, I fortunately wasn’t laid off. And I went to Wizards games at the then-Verizon Center to unwind after a 9-5.
Just a little over a decade later, the American economy is back in a recession. Unlike the Great Recession, it wasn’t caused by a housing bubble. Rather, it’s the novel coronavirus, which doesn’t know international borders, races or political views of its victims.
The coronavirus has changed sports as we know it. The NBA season restarted yesterday and the Washington Wizards will play their first significant game this afternoon. That said, the game will be played without fans, and it’s unlikely that fans will attend games for the 2020-21 season.
If fans can’t attend games in the 2020-21 NBA season, it will put a bigger hole in team owners’ pockets, who have to pay player salaries, team overhead costs, the rent or mortgage for the arena and more. According to Brian Windhorst of ESPN, game revenue is about 40 percent of the NBA’s earnings. So teams and their owners can expect a significant loss because of it.
The Wizards, like all teams, are not immune to these realities. They will likely lose millions of dollars if and when next season’s games can’t be played in front of paying fans.
In the short term, Washington may not be in bad shape. Laurene Powell-Jobs, the widow of former Apple CEO Steve Jobs acquired a 20 percent stake of Monumental Sports & Entertainment in 2017. That stake makes her the second largest partner in the organization to Ted Leonsis, who remains the managing partner but is no longer the majority owner, for now.
Still, it should not be a surprise to see NBA team values plummet in the next few years. Games will probably not be played in front of fans in the United States for at least the next 12 to even 24 months. On that note, the Toronto Raptors may have to seriously think about relocating in exile to the United States in the short term, since it is unlikely that the whole league would move to Canada in a bubble.
Do you think the Wizards can weather the storm better than most NBA teams during this era of the coronavirus? Let us know in the comments below.