Semi-OT: The NFL and the Economic Crisis

[Patsfanin Philly]

Moderators- I wasn't sure if this was appropriate for the main board or the political forum but I posted here due to the general interest and relevance.

The Economic Crisis and the NFL

I haven’t seen it written about but I’ve given some thought to the national economic crisis and its impact on the NFL. Like the presidential candidates, I’m not an economist but some things seem self-evident.

1) If fans don’t have jobs or less income due to inflation and higher prices or credit crunches, they are less likely to buy tickets to attend games but they will still watch them on TV. While the ticket sales are a small part of the revenue stream, if the games aren’t sold out there could be blackouts and the last thing the NFL wants is the sight of empty seats at stadiums. Season ticket holders may decline to renew as those thousands of dollars start going to heat the house or pay the bills.

2) Corporate sponsors will have to devote more of their resources to direct costs such as supplies and salary and will have less available for marketing.One local company that had a round of layoffs declined to renew their Phillies tickets for the playoffs for obvious reasons and I'm sure that type of decision is going on nationally as I write this. This past week General Motors announced that they would not be advertising at the Super Bowl this year. With fewer ads being sold and at lower rates, the TV networks are less likely to bid higher for the next contract (especially if it is a long protracted economic downturn). This plays into the salary cap as annual increases are tied to total revenues. The net result is smaller increases in the salary cap.
3) Luxury boxes are often rented for long terms such as ten years and may seem immune to the fluctuations in the economy but if companies start going into bankruptcy, the annual rent may be among the last to be paid, and certainly not renewed. The result of this is less money flowing to the owners’ coffers and less for other uses.
4) Players’ salaries won’t increase as fast as in the past (if the salary cap doesn't increase)and fans may not be as sympathetic to someone whining about not being to ‘feed their family” (e.g. Ty Law) or being insulted by a seven figure or low eight figure contract offer when those fans are worried about feeding their family or keeping a roof over their heads. It is predictable that some player will make a really stupid comment that will make the suits on Fifth Avenue wonder “what was he thinking.”
5) Front offices- Teams that are notoriously cheap will become more so as staffs are pared and possibly retired employees are not replaced as all teams look to cut expenses wherever possible, more so than usual.
6) Credit Crunch- This all depends on what plays on in Congress but any credit crunch that impacts the entire economy will impact the NFL if they rely on banks for financing. IIRC the NFL has inhouse financing available but I'm not familiar enough to be sure of the total ramification.

7) NFL Headquarters
I would like to compare it to the last few recessions, 1973, 1979 and 1991 but the NFL was nowhere the monster it is now back then. I hope that the NFL has a plan to address it and that they are not fiddling while Rome burns. I would have had more confidence in Rozelle or Tagliabue to be more pro-active than the current commish who seems inconsistent in his decisions.
8) I;m sure there are more that I haven't thought of...

 

[TealSox]

In my experience, I have to hesitate in thinking the Economic Crisis will effect the NFL in a "earth-shaking" manner.

It is my opinion that the NFL is so healthy right now that the economic crisis doesn't really effect their bottom line. The networks are locked into broadcast contracts and I can't see them trying to get out of them because I don't see fans turning off their TVs or canceling their cable.

Revenue sharing effects ticket sales and soft goods, but doesn't take into account luxury boxes that goes primary to the team. Unless you were resting on Countrywide or Washington Mutual to buy out all your boxes, the team will be okay.

Two years from now, I believe the salary cap is removed and that could be a problem if teams spend more than they can make. This sounds similiar to the NHL that had teams throwing money at players because they didn't have much of a cap and didn't have the revenue to pay the bills. This puts a lot of the blame on owners and GMs that open up the bank in shaky times.

Personally, I don't see Lambeau field any less packed than it has been in years past. The Cowboys will fill their new stadium just like all the other teams that have great attendence. Qualcomm isn't going to get any less full than it is unless the team itself gets worse, but the crisis won't hinder than any more than the lack of interest in San Diego to watch football live.

I find that people will tend to keep a bit of their budget for entertainment, such as vacations and ball games. Ironically, when they can cut in other places they will before they cut their yearly Pats game or turn down the opportunity to see the Sox beat the Yankees.

And their are still a ton of sponsors out there to throw money at being associated with a professional team. And when there isn't a big fish to sponsor, they will have a bunch of small ones sponsoring in different areas.

 

[Tunescribe]

Moderators- I wasn't sure if this was appropriate for the main board or the political forum but I posted here due to the general interest and relevance.

The Economic Crisis and the NFL

I haven’t seen it written about but I’ve given some thought to the national economic crisis and its impact on the NFL. Like the presidential candidates, I’m not an economist but some things seem self-evident.

1) If fans don’t have jobs or less income due to inflation and higher prices or credit crunches, they are less likely to buy tickets to attend games but they will still watch them on TV. While the ticket sales are a small part of the revenue stream, if the games aren’t sold out there could be blackouts and the last thing the NFL wants is the sight of empty seats at stadiums. Season ticket holders may decline to renew as those thousands of dollars start going to heat the house or pay the bills.

2) Corporate sponsors will have to devote more of their resources to direct costs such as supplies and salary and will have less available for marketing.One local company that had a round of layoffs declined to renew their Phillies tickets for the playoffs for obvious reasons and I'm sure that type of decision is going on nationally as I write this. This past week General Motors announced that they would not be advertising at the Super Bowl this year. With fewer ads being sold and at lower rates, the TV networks are less likely to bid higher for the next contract (especially if it is a long protracted economic downturn). This plays into the salary cap as annual increases are tied to total revenues. The net result is smaller increases in the salary cap.
3) Luxury boxes are often rented for long terms such as ten years and may seem immune to the fluctuations in the economy but if companies start going into bankruptcy, the annual rent may be among the last to be paid, and certainly not renewed. The result of this is less money flowing to the owners’ coffers and less for other uses.
4) Players’ salaries won’t increase as fast as in the past (if the salary cap doesn't increase)and fans may not be as sympathetic to someone whining about not being to ‘feed their family” (e.g. Ty Law) or being insulted by a seven figure or low eight figure contract offer when those fans are worried about feeding their family or keeping a roof over their heads. It is predictable that some player will make a really stupid comment that will make the suits on Fifth Avenue wonder “what was he thinking.”
5) Front offices- Teams that are notoriously cheap will become more so as staffs are pared and possibly retired employees are not replaced as all teams look to cut expenses wherever possible, more so than usual.
6) Credit Crunch- This all depends on what plays on in Congress but any credit crunch that impacts the entire economy will impact the NFL if they rely on banks for financing. IIRC the NFL has inhouse financing available but I'm not familiar enough to be sure of the total ramification.

7) NFL Headquarters
I would like to compare it to the last few recessions, 1973, 1979 and 1991 but the NFL was nowhere the monster it is now back then. I hope that the NFL has a plan to address it and that they are not fiddling while Rome burns. I would have had more confidence in Rozelle or Tagliabue to be more pro-active than the current commish who seems inconsistent in his decisions.
8) I;m sure there are more that I haven't thought of...

This is an interesting subject. Actually, the NFL was in existence during the Great Depression. I wonder how it survived then. A couple things I think will happen in the short term:

* People will find ways to save money on parking, either by carpooling more or using some sort of alternative transportation.

* In-stadium concessions/souvenir sales will nosedive. The $7 beer, $5 soda and $4 hotdog will suffer.

 

[spacecrime]

1) If fans don’t have jobs or less income due to inflation and higher prices or credit crunches, they are less likely to buy tickets to attend games but they will still watch them on TV. While the ticket sales are a small part of the revenue stream, if the games aren’t sold out there could be blackouts and the last thing the NFL wants is the sight of empty seats at stadiums....

The last thing the NFL wants? Melodramatic and really really wrong. There are lots of things that the NFL doesn't want to happen a lot more than a few empty seats (which teams could fill by giving seats to Boys/Girls clubs if they wanted to.

But all they have to do is keep the camera on the field instead of on the stands.Problem solved. Not that there is a problem; if the stands have empty seats, so what? You watch a game to see people in the stands? The rest of teh world is watching to see the game, not four fat guys with J E S T written on their over-hanging bellies.

Blackouts affect only a tiny area of the home team, and will have ZERO effect on the NFL TV revenues.

 

[Patsfanin Philly]

The last thing the NFL wants? Melodramatic and really really wrong. ..............

Blackouts affect only a tiny area of the home team, and will have ZERO effect on the NFL TV revenues.

Why is it melodramatic to say that the league doesn't want blackouts? When was the last blackout that you remember? The fact is that blackouts and unfilled stadiums would mean lesser popularity for the league as a whole if people can't watch their home team on free TV. Do you think fans in Boston or Philly would want to watch the Giants or Dallas if the Patriots or Eagles are playing at home because there are unsold seats at Gillette or the Linc??
When was the last time a team gave away a few thousand tickets to the Boys Club to avoid a blackout?? They let the local TV station buy them.....

 

[godef]

No more season ticket mortgages will be available.

 

[PatsFaninAZ]

Don't forget that if there are any empty seats, fans in the local market can't watch the game. It's blacked out.

Which is really messed up, because it creates a downward spiral. Fans lose interest in the team when it's not on tv and they sell even fewer tickets. We saw this happen here in Arizona when the Cardinals were in their old stadium. Since moving they've sold out every game, and interest has gotten better. But it's looking likely that they will have their first non-sell out this week against the Bills, unless they can sell 2,000 seats in the next couple of days.

It's kind of a dumb rule. In a bad economy, where people will still support the team but just can't get to every game, taking them off tv is stupid.