A Very American Coup By Michael – Louis Ingram, Editor-in-Chief...
Crisis in Sports
For major sports, many sports figures earned money once reserved for Fortune 500 corporate owners, and many live events have priced the common man out.
When I visited my daughter in New York and we looked into either going to a Ranger game or Knicks game. What we found that just to get in the door would cost $200 for the both of us.
As the Yankees move into their new stadium, many fans will find that an afternoon at the ball park will cost the equivalent as a flight to Disney World.
Many communities find themselves supporting billion dollar operations and million dollar players with taxpayers subsidies while the average taxpayers are priced out of the park. While TV has allowed more choices for fans, live arenas are pushing people away.
The question that remains for various sports is how the slowing economy will affect future revenues. As sports franchises deal with economic downturn, the questions is how will this affect both ticket prices and player salaries?
Many sport franchises have depended upon corporate help in subsiding team revenues. As corporations cut back on advertising, this could have short term negative impact on revenues as Corporations review their own spending.
The longer the downturn, the greater the impact the slower economy will have on sports. At any one time, there is only so much money available for entertainment and in bad times, there is less money for entertainment. A short recession will have little impact on sports but a longer economic slowdown will have greater impact.
Economic woe was seen in the recent Mosley-Margarito fight. Last year, this bout would have been a PPV event costing boxing fans $49 to view it and ticket prices would have been far more expensive but interesting, lowering the price actually led to a full house at the staple.
As ESPN Dan Rafel observed, “When you put two great fighters in the ring and price it right; people will come.” The question that arises is there is a limit to athlete salaries and ticket prices before it creeps back down to more realistic price?
In the past two decades, the answer appears to be no but this could change over the next few years. The NFL strategy of using revenue sharing and hard salary caps have allowed their teams to be competitive; and the league has become the passion of American sports fans.
For the NFL, their league is as strong as their weakest franchises; which is why historical franchises like Green Bay have been allowed to compete. The Pittsburgh Pirates have suffered 15 straight losing MLB seasons while the NFL Steelers have just won their second Super Bowl in four seasons.
While football wants strong franchise from top to bottom whereas baseball tolerates terrible franchise at the bottom and does little to ensure a more balanced competitive league.
Major League baseball works on the assumption that when the Red Sox and Yankees are at the top; overall ratings go up. The NFL works on the assumption that every team fan needs to know that their team can win a Super Bowl.
While baseball has seen record attendance, Football has taken over as America’s sport and its television ratings have surpassed baseball years ago.
The biggest danger that many sports have is alienating their fan base. On one hand, most fans can easily keep track of their sports. Using their blackberry or their cell phone, they can tap into any information on their sport or favorite team any time.
On the other hand, the average fan can no longer afford the trip to the ballpark and eventually a price will have to be paid as fans are separated from the live action of the sport they love.