Many plan to steer clear of sporting events until coronavirus vaccine is created: Poll

College of the Holy Cross Sports Economics Specialist Victor Matheson joins Yahoo Finance’s Seana Smith to discuss how Americans view attending sporting events as some stay-at-home orders are lifted and economies reopen.

Video Transcript

SEANA SMITH: Sports stadiums could be empty for a while. Listen to a new report released by "Reuters," found that the majority of Americans don't plan to attend movie theaters, concert venues, or stadiums until there's a coronavirus vaccine. For more on this, we are Victor Matheson, specialist in sports economics at College of the Holy Cross. And, Victor, thanks so much for taking the time to talk to us. I want to talk about this poll.

So the majority of Americans are not willing to attend events without a vaccine-- only 42% of those surveyed say that they would return whenever it reopens to the public. What do you think of these numbers and then the potential economic implications of this?

VICTOR MATHESON: Well, obviously, it's huge for sports leagues themselves. The typical league depends somewhere around half of its revenue on in-stadium and live audience. So that's a huge portion of their revenues. But again, think about why we go to sporting events, right? We go to sporting events for entertainment, for fun. And it's just not a fun experience if, you know, everyone around you is a potential enemy, right-- someone who could get you sick. And that's not what the sporting experience is like. We should be worrying about what that next at-bat is, we shouldn't be worrying about the person two rows down who just sneezed.

SEANA SMITH: Victor, it's interesting-- in some of your recent comments, you talked about the fact that state and local governments who have financed billions of dollars in new stadiums over the past 25 years, that they're going to be on the hook-- that they could be potentially facing huge problems as a result of this. Talk to us about exactly what you mean and the potential losses there.

VICTOR MATHESON: Well, so, a typical stadium is financed through the setting up of a public entity-- basically a sports authority. And they issue bonds in order to pay for the stadium. Those bonds are paid back through a combination of private sources-- so the owners paying for rent-- but also it usually involves something like a tax on ticket sales or a local tax increment financing district in the area of the stadium-- so bars, restaurants, theaters, any sort of retail in the area, and also very commonly things like citywide restaurant or hotel tax or rental car tax is used for those.

Of course, basically every industry I've just mentioned there has been decimated by coronavirus. And we're not bringing in hotel taxes. We're not bringing in restaurant taxes. And of course, until those stadiums open up, we're not bringing in ticket taxes or any sort of revenue at or near the stadium either. Of course, those payments on the bonds still need to be made, and that means that the cities are typically the backstop of all these.

So if the sports authority themselves can't raise the revenue, it means the city is on the hook for any debt payments that can't be made. This could potentially be very, very serious for cities that are already going to be facing huge, huge cash crunches due to the collapse of other revenue sources.

SEANA SMITH: Victor, when we talk about what the economic implications could be, there's been talk out there of how some of these seasons could go on-- in the NBA or NFL, they could be playing without fans potentially next year. There's also talk about maybe pushing back the start of some of the seasons-- specifically the NFL. What do you make of some of those comments? And I guess, how likely do you think some of these scenarios are?

VICTOR MATHESON: So I would suggest that it's probably extremely likely in some leagues that we will be going back to games with either behind closed doors or extremely limited audiences. Again, a league like the NFL or NBA makes well over half of its money from media rights and licensing and sponsorships. So if you can at least get the games back on television, that's not a perfect scenario-- because, again, you know, these teams do make millions of dollars from the in-person audiences-- but at least if they can recover 50%, 60%, 70% of their revenues, they'll jump at that in a second. That being said, I think we're a long way away at least from sold out stadiums and packing 75,000 people into an NFL stadium or 20,000 people into an enclosed arena.

SEANA SMITH: Yeah, I personally will be a little bit hesitant to attend anything that would be crowded here for quite some time. So it certainly does make sense. Victor Matheson, thanks so much for joining us.

VICTOR MATHESON: Thank you for having me.