The Effect of the Economy on Sports
The year is 2009. Our country is faced with some of its darkest days in history. The U.S. economy is on a steady downfall and it is only getting worse. Many people who make a living on Wall Street are starting to zip up their pockets to try and save some money here and there. It seems as though every industry in America is suffering – and in fact, they all are.
The interest in sports is widespread, but the vast variety that the U.S. houses is astonishing and makes the United States the world leader of sports. Since it is my intention to become a sports agent, I must truly ask myself a few questions: Will this job be around in 7 years? Will the money in sports still be available? Will people CARE? Will sports representation be heavily relied upon? While the short answer to most of these questions is probably yes, the current status of the economy and American life fails to enlighten me.
Instead of wondering about these questions, I felt as though it was my obligation to answer them. Bob O’Brien of Barrons.com wrote an interesting article analyzing whether sports are recession-proof. Smaller sports agencies aren’t hosting Super Bowl bashes as much as they used to and some big entertainment companies such as Playboy and Maxim either completely canceled or down-graded their parties. In addition to this, the NFL even had to slash ticket prices at Raymond James Stadium.
According to big-four accounting firm PriceWaterhouseCoopers, Tampa Bay was expected to earn about $150-million from tourism related to the big dance. That number is 22% down from last year’s Super Bowl in Glendale, Arizona.
The loyalty of fans to their sports teams comes unappreciated due to the fact that organizations still insist on charging so much money for tickets, food, PSLs.
Here are a couple of financial statistics for the “hurt” that is being felt by sports organizations:
- NBA is eliminating about 80 jobs.
- Baseball attendance fell 1% which was the first decline in four years
- Championship series game ticket prices in baseball were cut by 50%
- The Oakland A’s will cut 2009 ticket prices by 5%
- The most recent Talladega Superspeedway race in NASCAR showed 50,000 fewer fans
- Many stadium and tournament sponsorships are not being renewed – such as AIG and Tennis.
- Despite this, luxury boxes at the Mets’ new stadium (valued from $250,000-$500,000) sold out
- Median baseball salaries dropped 10%
So, in this time of great financial need, if sports teams and organizations do not give back to the fans in any way, they could find themselves in a particular situation that has plagued many previous empires – collapse from within.