Sports and the Economy
As our country deepens into a recession, we are now seeing how the poor economy is affecting the sports industry, firsthand. The NBA has laid people off, the NFL just laid off 10% of its work force, the NHL is on a hiring freeze, and the Arena Football League suspended its 2009 season. In addition, NASCAR teams are hurting for sponsors, athletes are seeing endorsements deals evaporate, and it seems as though the majority of baseball teams are hesitant to throw around the big bucks.
Being a casualty of the economy myself, I know how hard it is to find a job, let alone one that pays well. While athletes are still making their millions, we may see in the near future that the size of the contracts decrease. Rule of thumb seems to be contracts get bigger and bigger, but that may all change. The next draft will be that of the NFL draft, and I believe those prospects entering the 2009 NFL draft and the agents representing them will soon realize the dollars may not be there like in the past.
In the ’08 draft we saw number 1 pick Jake Long sign a 5 year $57.75 million contract, making him the richest offensive lineman in the NFL. We also saw Matt Ryan sign a 6 year $72 million contract with $34.75 million in guarantees. Those numbers are staggering in any economy. With the Lions most likely landing the number one pick it will be very interesting what kind of money they are willing to spend. Let’s not forget that Detroit has been hit hard during this economic downturn.
When it’s signing endorsement deals, free agents, draft picks, or in the Yankees and Mets cases filling brand new stadiums, things as we know it in the sporting world has most certainly changed. It’s now just a matter of how long will this last.