Smaller crowds are only the first domino to fall for U.S. sports leagues, which could see lower corporate spending, flat or declining revenue and stagnant team values in a global recession, analysts said. To cope with these problems, league executives have begun offering deals on tickets, cutting jobs and in the case of the National Football League, reopening its labor deal with players to reduce costs.How can we go on spending tax money to save pro teams who do not construct our sidewalks or build our libraries?
While revenue remains strong in many sports, officials no longer see the sector as recession proof. “We’ve taken an incredible leap with the pricing of tickets that is going to come back to haunt the major sports,” said Michael Cramer, professor of sports management at New York University. “It’s not just the people at the bottom end,” added Cramer, who is former president of Southwest Sports Group, which owns the Texas Rangers baseball and Dallas Stars hockey teams. “It’s the people at the top end that don’t have the money.”
Signs of a slowdown abound, including a decline in regular-season attendance for Major League Baseball, soft season-ticket sales for the National Basketball Association and an NFL memo citing revenue pressures. Throw in cutbacks by sponsors in such struggling industries as financial services and automotive, and the U.S. sports industry is facing more trouble. “We’ll cross our fingers like everyone else and hope that there’s some type of economic recovery and any negative impact on our business will be a minimal one,” National Hockey League Deputy Commissioner Bill Daly told Reuters this month.
Fan frustration is rising along with ticket prices.
Wednesday, October 22, 2008
Monkey Cage has a thought-provoking post on the financial decline of pro sports that indirectly touch on the welfare of both the Nashville Predators and the Tennessee Titans. Deals with both teams include Metro funding that looks archaic and excessive with a collapsing economy and a capital budget that cannot even be paid for. Says the Cage: