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The Sports World, starting to feel the downturn in the Economy.

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  • The Sports World, starting to feel the downturn in the Economy.

    I think these are things that people fail to take into account how businesses that have been affected but have not shown the sgins will begin to show them and how no one or very few escape a downturn in the economy:

    Welcome to the No Benjamins Association

    excerpts:
    I skipped my annual NBA All-Star Weekend column because I was frantically trying to finish my book. At least that's how I rationalized it. I need to finish this book. I have a deadline. I can't afford to spend that writing time on anything else. But after reflecting for a few days, I came to a sobering conclusion: The book was a convenient excuse. I could have found time to pump out that column. I just didn't want to hand it in. See, it wouldn't have been a typical All-Star Weekend account for me. It would have been about money. You might remember me writing that the NBA was the No Balls Association two years ago. Now it's the No Benjamins Association. Nobody is rolling in Benjamins anymore. Everyone is scared. Money hangs over everything.
    That's what I ended up discussing for four solid days in Phoenix. Hands down, it was the most depressing All-Star Weekend I've ever attended. Celebrities were scarce. The parties weren't as good or plentiful. Even the number of groupies seemed lower than usual. It's not as if everyone was drinking Natural Light and eating Hamburger Helper, but still, when you're celebrating a weekend with the No Benjamins Association, you know it. We should have been talking about Kevin Durant's coming-out party, a potentially delicious see-if-you-can-top-this battle between Kobe and LeBron at the game (never happened), whether H-O-R-S-E worked, who might emerge in a wide-open playoff race, even whether the Nate Robinson and Dwight Howard dunk contest "battle" was too contrived … only everything kept coming back to that dark cloud of money...


    This season? We talked about money. Constantly. We didn't even know about the line of credit on the horizon; that didn't leak until the Monday after the All-Star Game. (On Thursday, we learned that 12 teams will accept the league's offer to borrow $200 million from JPMorgan Chase and Bank of America, with between $13 million and $20 million available to each team. I found this ironic after learning in Phoenix that David Stern and Jerry Colangelo blew a jaw-dropping $100 million on the entire Redeem Team process from beginning to end. My how times have changed.) We knew about layoffs of employees within the league and various franchises. We knew various local and national sponsors were bailing, most notably car companies and major banks (two staples for the NBA). We knew certain franchises were losing significant wads of money and reacting accordingly. (Details are still trickling out. For instance, after the trade deadline, The Sacramento Bee reported the Kings would have lost $25 million had they not dumped Brad Miller's salary and bought out Mikki Moore, and the newspaper's Kings blog reported team employees were no longer allowed to work overtime or eat dinner in the media room.) Even trade talk -- normally a staple of any All-Star Weekend -- revolved more around themes such as, "They have to cut payroll," "They can't take on any money right now" and "They're too terrified of the tax to do anything."
    You know who was mentioned in more "Where do you think he's going?" scenarios than anyone besides Amare Stoudemire? Raef LaFrentz's Expiring Contract. That thing got mentioned so many times it could have hired a PR staff and an agent. Here's the kicker: Raef can't play. He's a basketball invalid. He has been injured since something like 1973. Portland's insurance company repays the Blazers 80 percent of his salary, making him a cap figure and little else. In the No Benjamins Association, that makes him a freaking commodity. Teams wanted to dump clearly superior players on Portland at the deadline just to get Raef's insurance money...

    Which brings us to the Lockout That Hasn't Happened Yet. Unless the players' association agrees to major concessions by the summer of 2011 -- highly doubtful because that would involve applying common sense -- the owners will happily lock out players as soon as the current CBA expires, then play the same devious waiting game from the summer of 1998. David Stern will grow another scruffy beard. The owners will plant their feet in the sand, grab the tug-of-war rope and dig in. Only this time, they KNOW they will win. See, we learned a dirty little secret in the last lockout: An inordinate number of NBA players live paycheck to paycheck. Yes, even the guys making eight figures a year. You can play high-stakes poker with them … and you will win.

    Quick tangent:
    You're asking yourself, "Wait, how can a dude making $8-10 million a year live paycheck to paycheck?" Easy. First, he's only banking 40 percent once the IRS and agents are done with him. Second, he's probably overpaying for multiple houses and luxury cars just to keep up with everyone else. Third, he's buying expensive clothes and dinners, chartering planes, buying expensive TVs, going to casinos, and paying for friends and family at every turn. Fourth, there's a decent chance he's supporting a bunch of people back home -- family and extended family -- and not just that, but he might have gotten roped into funding at least one dumb "investment" by a loser family member. ("Uncle Lenny, I thought you told me this nightclub couldn't miss?") Fifth, he is, um, "dating" frequently -- even if he's married -- and if you "date" frequently, mistakes might happen that lead to hospital bills and child support payments. (If you catch my drift.) And sixth, he's not adding these numbers up in his head because he's thinking, "I don't need to worry about money, I'm making $10 mil a year!" I know it sounds farfetched, but I've heard the Inexplicable Tale Of Financial Woe with NBA stars too many times to count … and that doesn't include stars such as Scottie Pippen who were screwed by their financial advisers. It's a long and inglorious list, and if you don't think we're headed for 15 "Real Sports" segments in the next decade with Bernie Goldberg catching up with Broke Former NBA Superstar X, you're kidding yourself. Remember the lessons of the '99 lockout -- the players HAD to come back. And it wasn't because they missed playing...

    Looking at the next 15 months only, the consensus of people in the know was that multiple NBA franchises (guesses ranged from three to eight) will move cities, get sold to new owners or throw themselves on the mercy of the league...

    So that's the climate for the No Benjamins Association right now: Murky, unpredictable and not so lucrative. And you wonder why I didn't want to write about All-Star Weekend. Looking at the big picture, the league won't struggle even 1/10th as much as the NHL in years to come -- of all the wildest predictions I heard in Phoenix, the craziest came from a connected executive who predicted that fifteen NHL teams would go under within the next two years (and was dead serious) -- and Major League Baseball is about to get creamed beyond belief. Other than the NFL, the NBA will emerge from this financial quagmire in the best shape of any professional sport; not just because its billion-dollar deals with Disney and Turner (inked fortuitously in the summer of 2007) run through the 2015-16 season but because the Lockout That Hasn't Happened Yet will ultimately solve every major league issue except its stupefyingly dreadful officiating.
    The economic downturn has turned the NBA into a league of dollars, not sense.

    The BlackBerry buzzed atop the cherrywood desk. Both belong to Pistons GM Joe Dumars, and as it was the day before the NBA trade deadline, the humming came roughly every 10 minutes, as proposed deals landed in his electronic mailbox.
    Dumars read most of the messages silently before returning his attention to the TV on the wall or the board to his left that listed every NBA player's free agent status. But this time Dumars clicked the trackwheel to open the note. "Oh, wow," he said in quiet awe. It was a response undoubtedly echoed by every other GM and team president who opened the same e-mail.
    The league office had sent the message, a warning to teams that the economic crunch currently squeezing the rest of the world had found its way to the Land Where Amazing Happens. Specifically, the note said that the league's projected revenue, which had been rising forever, had turned decidedly southward. Teams were already seeing defections in season ticket renewals and sponsorship deals, and as a result, the league was projecting its luxury-tax threshold next20season to dip to $69M. Dumars had expected the mark to hold at this season's $71.15M. But a decrease?...
    Last edited by tsetsefly; March 03, 2009, 10:53 AM.

  • #2
    Re: The Sports World, starting to feel the downturn in the Economy.

    Sports World was/is in a Bubble of its own :-(

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    • #3
      Re: The Sports World, starting to feel the downturn in the Economy.

      I know it's small of me, but I'm going to bask in some schadenfreude for just a little while.
      Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. -Groucho

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      • #4
        Re: The Sports World, starting to feel the downturn in the Economy.

        Originally posted by Shakespear View Post
        Sports World was/is in a Bubble of its own :-(
        And it was all because they were a prime benefactor of the whole FIRE economy. The corporate luxury boxes and season tickets, the big spending on TV ads by auto and FIRE companies...you're totally right they're in for a new reality.

        As a hockey fan I'm not looking forward to a league meltdown because I bet the players aren't going to face the reality before long lockouts and turmoil wake them up to the facts. Will the best players in the game be able to play for 2-3 mil a year (if they're lucky) instead of $5-10m?

        As long as the gov't doesn't do something totally boneheaded like try to bail out a league there should at least be some rationalization and a better long term structure in the leagues once the pain is gone. Maybe Joe Six pack will be able to buy tickets again without having to pay a mortgage.

        As an aside, a friend of mine from in New York said that a lot of Yankee fans are going beserk over the Personal Seat License fees they're getting slapped with for the new stadium. I think he said something like one guy he knows got a bill for $120k for his seats? Great timing Yankees.

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        • #5
          Re: The Sports World, starting to feel the downturn in the Economy.

          Originally posted by Master Shake View Post
          I know it's small of me, but I'm going to bask in some schadenfreude for just a little while.
          No doubt we'll see some "shovel-ready" stadium projects get funded under the "infrastructure investment" initiatives. That should ease their pain...

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          • #6
            Re: The Sports World, starting to feel the downturn in the Economy.

            Originally posted by CanuckinTX View Post
            I think he said something like one guy he knows got a bill for $120k for his seats? Great timing Yankees.
            No one's forcing him to pay it.
            Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. -Groucho

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            • #7
              Re: The Sports World, starting to feel the downturn in the Economy.

              Both the Yankees and Mets built new ball parks opening this year. I'm sure their business model was for 4 and 3 million in attendence. Lots of stories about people not resigning for their season tickets. Lots of evidence of tickets available. A popular way to do it was have 8 - 12 people buy a group plan and split the games up. Not only are people have problems paying up. The prices on the really good seats are through the roof.

              Btw: Check out what the Giants and Jets have done with PSL's The gouging was incredable.

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              • #8
                Re: The Sports World, starting to feel the downturn in the Economy.

                What were the sports gaining fans during the Great Depression ?

                I've heard of Roller Derby which seems to have been invented in 1935, but I'm not sure why people like it.



                Fans flock to San Francisco's style of roller derby despite current recessed or depressed economy. "Since 2008, our attendance figures have grown by 60%", said the leagues marketing manager.


                http://www.baycitybombers.com/

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                • #9
                  Re: The Sports World, starting to feel the downturn in the Economy.

                  Baseball saw its attendance take a major hit during the Great Depression; hope it happens to baseball this time around, too.

                  Despite the immense popularity of baseball in the 1920s, the 16 teams that made up the major leagues then were not insulated from hard times. Attendance plummeted 40 percent from 1930 to 1933 and did not return to pre-Depression levels until after World War II, when millions of soldiers returned.
                  http://www.nytimes.com/2009/01/07/sp...2&ref=baseball

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                  • #10
                    Re: The Sports World, starting to feel the downturn in the Economy.

                    First Great Depression Sports Report:

                    "I know, but I had a better year than Hoover."

                    -- Reported reply when a reporter objected that the salary Babe Ruth was demanding ($80,000) was more than that of President Herbert Hoover's ($75,000).

                    How quaint ;)

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                    • #11
                      Re: The Sports World, starting to feel the downturn in the Economy.

                      Originally posted by Chomsky View Post
                      Baseball saw its attendance take a major hit during the Great Depression; hope it happens to baseball this time around, too.



                      http://www.nytimes.com/2009/01/07/sp...2&ref=baseball
                      If im not mistaken the NFL before it was NFL also went through major restructuring during the the Great Depression, although it was not as popular as its now, obviously...

                      Alot of the player organizations, like the baseball union have for years been out of touch with economic reality, it will hit them hard in the face now.

                      Originally posted by GRG55
                      No doubt we'll see some "shovel-ready" stadium projects get funded under the "infrastructure investment" initiatives. That should ease their pain...
                      No doubt, as the article aboved explained cities will be falling in line to either not lose the tax revenues or get some new revenue...

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                      • #12
                        Re: The Sports World, starting to feel the downturn in the Economy.

                        I think the attraction of professional sports for most people is 1) they played and are projecting a bit into the pro game and 2) in a society that's rigged from top to bottom, sports has retained an essence of reality. Hit the ball, make the catch, sack the quarterback. Those are real events. We don't get many of those in MSM entertainment.

                        When Joe Sixpack's home team star, enjoying his multimillion dollar paycheck, fails to perform, that's when salary becomes an issue for Joe and his fellow fans. We all know the mantra, in good bubbly times at least. As reality's bite sharpens, my guess is sports will, if anything, be more a welcome escape than ever.

                        Of course one of America's smaller elephants in its parlor is that what players are paid is nearly wholly dependent on competing corporate team owners. Player leverage is restricted to playing the owners' desires off on one another. The baseball free agency market is in its own recession right now and the players have no response whatsoever except to wait around for a smaller offer.

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                        • #13
                          Re: The Sports World, starting to feel the downturn in the Economy.

                          I purchased tickets to one 49ers game last season for the first time ever and a rep. from the team actually called me last week to see if I wanted in on any of the various ticket offers.

                          It wouldn't be surprising to see teams from all five pro leagues contracted during this recession.

                          The Arizona Cardinals struggled mightily to sell out the tickets for their very first appearance as a franchise in the NFC championship game in January.

                          Check this blurb from Yahoo! Sports in November just after the current NBA season started:
                          I had to cringe last weekend when I read Phil Mushnick's column about the attendance problems that some NBA teams are having. He reports that at a recent New York-Memphis game in Tennessee, an eyewitness said there were only about 4,000 people in the stands to see the two teams play. Mushnick also believes that by next spring we will be hearing/seeing stories about how some NBA (and NHL) teams are close to suspending operations because of larger financial troubles.


                          avg. attendance (total tickets sold including to scalpers, not actual bodies in the seats) in Sacramento for the Kings has fallen off by 2,000 out of 14,000 since last season.

                          http://sports.espn.go.com/nba/attendance?year=2009

                          This graph of NHL and NBA attendance figures has been making the rounds for a few months:

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                          • #14
                            Re: The Sports World, starting to feel the downturn in the Economy.

                            I think it is worth noting that seats sold and seats occupied are different things. Many companies have season ticket plans and let their salesmen dole out tickets to customers. For the Nets and Devils it has always been the case that there are lots of empty seats at the games and the announced attendance is higher than it appears. I'm sure that's true in other parts of the country as well. (Excluding rivalry games.)

                            As the economy continues to contract, I believe a number of corporations that purchase ticket plans will cut back. Scalpers will no longer have a market since tickets will be available at the stadium or ballpark. This is the way it was in the late 70's and early 80's. When I was young you could walk up and buy tickets at the box office. And inflation adjusted prices have risen WAY too far. They will now start to drop.

                            Btw: Is the deflation or disinflation?

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                            • #15
                              Re: The Sports World, starting to feel the downturn in the Economy.

                              Originally posted by cjppjc View Post
                              Scalpers will no longer have a market since tickets will be available at the stadium or ballpark.
                              That's who I'm really going to feel sad for - those poor scalpers. What other industry is there where a completely unnecessary middle man can step in just to charge higher prices and provide no service whatsoever?

                              And I'm not talking about something like StubHub where it brings together buyers and sellers, but those scum of the earth that buy up large blocks of tickets for no purpose other than to turn around and sell them for more.

                              Good riddance (i hope).

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