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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...
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...
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