Economy could bring out the bear in sports
KURT STREETER
With markets roiling in a tumultuous financial climate, teams and leagues can spend lavishly and, almost paradoxically, struggle at the same time.
The latest economic news from the sports world presents us with a mixed-up, bipolar scramble.
ESPN just inked a fat, $500-million contract to broadcast a full plate of college football bowl games beginning in 2011, a deal 50% bigger than the one currently in place.
But General Motors, cash strapped and having already pulled support from a pair of NASCAR tracks and golf's Masters, announced it won't run a commercial during this year's Super Bowl.
The Yankees just ushered in the year's baseball free agency spending spree, offering pitcher CC Sabathia the richest contract ever tendered someone at his position: a reported $140 million over six years.
But last season, major league baseball attendance dropped for the first time in years.
The NBA is cutting nearly 10% of its workforce and has shuttered its L.A. office.
The NFL recently slashed playoff ticket prices and its commissioner frets publicly about everything from attendance to the fiscal health of corporate sponsors, to how the credit crunch may hurt new stadium plans.
Women's golf? Contracting. The Olympics? London 2012 organizers are scrambling to find top-tier sponsors and enough cash to build venues.
NASCAR? Two of its most prominent teams just melded together to cut costs.
It's more than a little confusing. In some parts of the sports world, it's as if the Wall Street meltdown is simply a stiff, inconvenient wind that can easily be ignored. Other, more cautious parts see not just a stiff wind but a terrible hurricane at the doorstep.
To gain some clarity on this matter I spoke this week with a handful of scholars who make their livings studying economics and athletics. A summation of their thinking: Yes, that is indeed a terrible hurricane at the doorstep. And yes, we can take the old adage that big-time athletics is somehow recession proof, and toss it out the window.
But what of the news signaling that not much has changed? What, I wanted to know, of Sabathia and the reported $55 million for two years offered Manny Ramirez and the fat TV deal that signals ESPN is bullish on the future?
A touch of silver-lining news in times like these should come as no surprise, said Wayne DeSarbo, director of the Center for Sports Business Research at Penn State. "In some sense every economic condition presents not only a loss, but an opportunity . . . which is exactly what we are seeing now," DeSarbo said. "Star players are going to get their money. It is going to be the middle-range guys who are going to get squeezed."
