On March 11, the NBA announced that the NBA season would be suspended indefinitely due to COVID-19, halting the regular season while it is about 80% complete.

Due to the suspended NBA season, we estimate that ESPN's cash flow will contract by 20% this year, with cash flow down to approximately $2.40 billion. A large portion of the decline in cash flow is attributed to lost advertising revenues. We project ESPN ad revenue declines could be in the $600 million to $630 million range.

With ESPN's large portfolio of annual sports rights payments and the NBA regular season reaching about 80% completion, the network's programming expenses for 2020 are only estimated to decline by about 5% due to the NBA suspension.

There is still a chance that the NBA could resume play where it left off, but nothing has been confirmed. NBA Commissioner Adam Silver said in a statement to the press during a TNT interview that after a 30-day period, the league would reassess the situation.

The estimated timeline for a best-case-scenario return, as of this analysis, is mid-to-late June.

In lieu of live sports, ESPN is turning to re-airing classic games marathons, breaking sports news, sports films and documentaries, and oddball tournament-style events such as "Acrobatic Pizza Trials."

"We are working with the leagues themselves to free up the possibility to show encore presentations and discussing how we can present them," Burke Magnus, ESPN executive vice president of programming acquisitions and scheduling, said in a recent interview with the "ESPN Front Row" site.

Economics of Advertising is a regular feature from Kagan, a media market research group within S&P Global Market Intelligence's TMT offering, providing exclusive research and commentary.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.