The Hidden Cost of Cancellation
With the current state of a world entrenched in warfare with an invisible enemy we look at the hidden cost of a pandemic. Everyone knows about the big highlighted economic issues surrounding the US. The big ones being unemployment, the stock market and main street America, but what happens when a pandemic causes the cancellation of major events or cancellation of an entire sports season.
What the general public sometimes fails to recognize is the behind the scenes operation of putting on a major events like the super bowl, the college football playoff or the behind scenes work that goes into putting on the NFL season. With these events come dependents on the event itself. What these are the contractors that are hired to run the event, set up the event, market the event, the vendors at the event, the tv and/or radio stations that will be broadcasting the event. These companies/vendors rely on the event as part of their overall budget and when the events get canceled that revenue is lost. This forces the companies to adjust their budget to account for the loss of revenue by laying people off and cutting other operational costs to stay afloat.
Another hidden cost of the event/season cancellations are the overall economic impact to the local economies that were scheduled to host them. Take for example the effect on the City of Spokane when the NCAA tournament was cancelled. Experts estimate the economic impact in this event-less March alone will be a deficit of roughly $20 million. Organizers say they will lose at least $3.4 million just in tax revenue; the city projects a $6 million sales tax hit on its initial projection of $53 million in 2020. These are staggering numbers and is only one example in a pool of many. This is only one example of many cities that have been impacted similarly. Another example is the impact of the cancellation of SXSW festival. How many vendors lost out on the revenue they were counting on as part of their budget or how many stage setup crews lost their job due to the cancellations?
Overall the national economic impact of the coronavirus has been staggering with the stock market plunging to near 2008 levels, but what also needs to be understood are the hidden cost when a pandemic hits a country causing widespread cancellation.