Are you ready for Wednesday matinee football? Ready or not, for the first time, Wednesday will feature a game as 2020 continues to get wackier. Twenty Ravens players are on the COVID-19 list and the reigning NFL MVP himself, Lamar Jackson, has tested positive for COVID-19. The NFL canceling games seems to be out of the question, but why? It sounds irresponsible to play a Wednesday game with two more positive COVID-19 tests on Tuesday night.
Well, as usual, the answer lies in the numbers. TV contracts, player contracts, and sports betting contracts all have a hand in making this decision. Sportsbooks have had a tough time attempting to follow this chaotic season. For example, the Ravens vs. Steelers game was moved five times in a week. First it moved from Thursday night primetime (Thanksgiving) to Sunday, then to Monday night, then again to Tuesday night, and finally, the game has settled into Wednesday.
The Steelers opened up as four-point favorites and have methodically moved to 10.5 point favorites with COVID-19 positive cases piling up. Shouldn’t the league just cancel this game or even delay the season until the league has no more COVID-19 cases? It certainly seems like the NFL is taking a huge risk by playing these games. Well, the financial ramifications of canceling an NFL game might be more costly than we think.
Financial Impact Of Canceling An NFL Game
NFL Sports Betting Licensing: $2.3 Projected Billion Per Season
According to the American Gaming Association (AGA), legalized sports betting projects to be worth $2.3 billion annually for the NFL. Sports betting has become a massive industry in the land of football as it is the most popular sport in the United States. Furthermore, the AGA believes that the NFL gains could rise to $4.2 billion in revenue from legal sports betting. These figures do not include the playoffs or the Super Bowl either.
It is important to recognize that the revenue discussed by Nielsen (In Combination with the AGA) is not just from sportsbook partnerships, advertising, and product fees. A huge piece of betting revenue is increased engagement and consumption because of sports betting. 2020 sports betting has given the NFL a huge revenue spike. Nielsen estimates an incremental increase of $573 million this year thanks to gambling services.
The New York Times also has some interesting reporting on the subject of sports betting. According to a study published in the NYT last year, 34% of the revenue reported by sportsbooks was from football. The New York Times also believes that this is an increasing number, despite the fact that the NFL has one of the shortest seasons in professional sports and it is not nearly as popular overseas.
In estimated gambling-related revenue alone, each regular-season game is worth $8,984,375 million to the league.
TV Contracts: ESPN $1.9 Billion, DirecTV (Sunday Ticket) $1.5 Billion FOX $1.2 Billion, NBC $1.1 Billion, CBS $1.0 Billion Per Season
In 2019, regular-season NFL games averaged 16.5 million viewers according to Forbes. This staggering number is put into perspective when 47 of the top 50 broadcasts in television history are NFL games. The NFL regular season consists of 256 games over 17 weeks including bye weeks for teams.
Taking the dollar figures that companies spend per year on hosting the NFL, we can project how much each game is worth to the NFL from a TV perspective. The NFL is not at risk of canceling any playoff games or the Super Bowl. Having that said, we will not be taking into account any of the playoff games because it is not included in the above price.
Using this projection, each regular-season game is worth $26,171,875 million dollars in TV contracts alone!
NFL Players Do Not Get Paid
Everyone wants to play games, including NFL players. If the NFL cancels their games, the players do not get paid per the collective bargaining agreement. For each game that is not played, players lose 1/16th of their contract.
The minimum salary in today’s NFL is $610,000 per season (not including playoffs). Should a player being given the minimum contract miss a game, they would miss out on $38,125 for every game missed.
What Happens To NFL Futures Bets If Games Are Cancelled?
It is important to recognize that each sportsbook has its own house rules. Anyone can view these house rules by searching for them. DraftKings Sportsbook, for example, makes their rules available easily and can be found here. All rules are subject to change by each individual company but as of right now these outcomes could happen given some rules that are currently in place.
NFL futures bets are some of the most popular wagers in the betting industry. In fact, betting future win totals is one of the largest markets that sportsbooks offer. Should any NFL game get canceled, those teams win total bets would be voided and refunded. This would include bets that are a foregone conclusion at this point anyway.
For instance, if the Baltimore Ravens vs. Pittsburgh Steelers game were to be canceled, both of their win total futures bets would be in jeopardy. Prior to the season, the Steelers win total was projected at 9.5 after going 8-8 last season. They are currently 10-0 and have already gone over. Theoretically, that bet over or under on their win total could be refunded regardless of the fact that the outcome was already completed.
The dicey situation also rears its head into “season leaders bets,” “division winners,” and “to make the playoffs” bets.
The expectation would be that these bets would be refunded by the sportsbook. This is always subject to change, however. The NFL is aware of this, and given the licensing agreements that are in place, they will continue to avoid issues.
Alas, the NFL is not canceling games, and barring something catastrophic, there will not be any games canceled at all. Based on the numbers, the NFL season will push on.