May 16, 2010

If you’ve followed sports at all in the last two years, there is one concept that you constantly were aware of, even if not directly…the economic recession directly impacted sports and sports sponsorships.

We’ve seen the NBA bailout its teams through a $175M loan, a hockey franchise in bankruptcy court, the NFL coyly acquiescing on its lottery policy, various lay-offs and cutbacks; the notion that sports are or ever were recession-proof are now long gone.

And as for the corporate sponsors?  It was more of the same — decreased Super Bowl ad prices, stalwart advertisers choosing not to advertise due to different directions or bankruptcies, supposedly large naming rights deals going by the way side (Cowboys Stadium, anyone?)

And as for the fans themselves?  that goes without saying.

The recession did not discriminate, effecting fan, sponsor, and sports league alike.  But now that we’ve seen some significant turnaround are things truly back to normal?

Well…kind of.

Look at ESPN, for example.  They just reported that they saw their ad revenues increase by mid-single-percentage points in this past fiscal quarter.  Fantastic.  The problem?  Last year, ad revenues were down by high-single-percentage points, leaving ESPN at an ad revenue level that was still pre-recession.

At ESPN, ad revenues in the fiscal quarter increased at a mid-single-digit percentage. And Disney said the figure could have been “a few percentage points higher” if some college bowl games had not shifted schedules.

Still, last year ESPN’s ad dollars declined at a high-single-digit rate, so more growth would have been needed to return to a pre-recession performance.

Disney did say that so far this quarter, ad sales at the stations and ESPN are up at double-digit rates versus 2009. (via Media Post)

Its great that we’re starting to see a measurable turn-around, but again, it really makes you recognize the effect the recession had on the business of sports.  The question going forward is how much was learned from this entire situation.  Will sports do a better job at mitigating losses when the next recession comes around?  Did this situation make some of the unnecessary sports spending more apparent, such that teams and leagues and sponsors will be more efficient with their dollars?

…or will we see a return to not only pre-recession levels of revenue, but a pre-recession mind set?

Guess we’ll have to wait and see.

Be Sociable, Share!