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More news on the sports economy watch

2008 October 24
by Skip Sauer

Sunil Gulati, Columbia economist and president of US Soccer:

Look, economic downturns have negative effects, full stop. For people to say sports is somehow recession proof, that’s basically nonsense.

Gong!! I wonder where this term “recession proof” and its relation to sports originated anyway. Anyone know? Here is more from Gulati on the downturn and US soccer.

In the land of the giants (NFL & EPL), viewing is stable, but broadcast revenue is under pressure:

At a conference on the globalization of sports held ahead of Sunday’s NFL game in London, Goodell also reiterated that the league will face challenges in the current economic climate, but that the NFL is “incredibly strong” and should weather the downturn relatively unscathed.

However, he said network partners are already reporting that advertisers are pulling back, both on a local and national level.

“The sales market is different than it was even several weeks ago,” Goodell said during a panel discussion with Richard Scudamore, the chief executive of the English Premier League. “We see it primarily on a local level, which I think is through a large extent a reflection of what is happening in the automobile industry. But it has now in the recent weeks gone to the national level. It’s had an impact. The fortunate thing is that it hasn’t had an impact on our viewership.”

As in the classic case, price adjustment in the face of an aggregate downturn is key. This story reports adjustments from St. Louis and elsewhere:

The Cardinals cited the uncertain economy this week as a reason for freezing prices on 70 percent of their season-ticket packages. The team is prepared for attendance to be below last season’s 3.4 million.

The Blues, who last season opened unsold luxury boxes to noncorporate buyers for individual games, are finalizing a new ticket program — described by a team official as “creative” — to meet their goal of 30 sellouts.

If prices were “right” last season, is freezing them the right move? Moreover, the language suggests price increases for 30% of the Cards’ tickets. Perhaps last year they were underpriced?

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