Sports! No Longer Recession-Proof

So, your favorite sports team…Do they have an economic contingency plan?

Lets face it, the economy is going as well as the St. Louis Rams football season (Jim Haslett is gonna turn it around? really? R-E-A-L-L-Y? Is he playing in the games too?), couple that with the fact that the first “Bailout” failed (good luck with the second one!) and you have an economy that is seeing dramatic decreases in the stock market, increases in unemployment, and millions of homeowners in trouble.

So how does a crappy economy effect sports?  Quite simple.  Sports are not a necessary expense, and at some point, sports fans are going to have to choose between going to a football game and having gas money for the week.  In fact, the economy is already having a large effect on some sports, as evidenced by this Bill Reiter article in the Kansas City Star,

“There’s definitely an impact [Ed. - "On Sports"] with the sagging economy, a direct correlation,” said Bill Newman, the Chiefs’ senior vice president of administration.

That influence has been felt nationwide. The NBA plans to get rid of 6 percent of its work force and has closed its office in Los Angeles. The NCAA has held meetings on spiraling travel costs. Major League Baseball will see its first attendance drop in four years. Local teams from the Royals to the Chiefs to the Wizards have begun offering fan bargains.

“People are absolutely thinking about this — they’d have to have blinders on if they weren’t,” said Mark Lev, executive vice president of the Fenway Sports Group, a sister company to the Boston Red Sox. “As teams do their budgeting for 2009 and beyond, they’re mindful of where the economy is and they’re trying to project out the impact of all this.”

Need a specific example?  In the NBA, the Charlotte Bobcats cut 35 jobs this past week, a move that they blamed, in part, on the nation’s current economic situation.  Although sports certainly haven’t suffered as much as other facets of the economy, which is due in part to long term television contracts from which a large portion of revenue is gained, there is certainly cause for concern, especially when increasing revenues for some sports are in question.

So, how has sports been attempting to cope with the economic situation?  Clever Promotions.

The Royals responded toward the end of their season as the financial hardships for Americans spread.

“In August, we came out with a promotion with QuikTrip in which you were able to get four tickets and a $20 card for gas or food there — an $80 value — and we promoted it for $40,” Tilson said. “The whole idea was to call out and try to associate with what was on the top of people’s minds.”

But at some point, these promotions will lose their usefulness in small market areas with suffering economies.  Is a $20 dollar gas card going to fill up the seats at a Royals game?  Are all you can eat seats at a Pittsburgh Pirates game going to get the attendance over 13,000?  probably not for any sustained time period.  And these problems will only be exacerbated if the economic spiral continues.

So, the moral of the story?  Next time your congress-person is voting on bailout legislation, think about your season tickets and beer prices at the stadium, maybe you want to think about giving them a call.

Kansas City Star:  Financial woes put a pinch on sports fans

Sports Business Digest:  Misleading MLB revenue and attendance

Tags: Bailout, clever promotions, Congress, Economy, Small Markets, sports

Category: Baseball, Basketball, Football, Hockey, Miscellaneous