Zimbalist on "The Sports Recession"
Andrew Zimbalist is interviewed in The New Yorker. Most of the discussion is about the impact of the economic crash on professional sports — ticket sales, revenue sources, labor relations, and fans — but the conversation is wide-ranging and certainly worth a read. Here’s a snip:
What kind of effects are we seeing in Major League Baseball?
Attendance is down about five per cent this year. That news comes on the end of a string of thirteen years where attendance went up and revenue went up at a clip of eleven per cent per year. That was the average annual growth of revenue in baseball since the strike of 1994-95. Now that growth has stopped, and we’re probably seeing a reversal.
At Yankee Stadium and Citi Field they have less capacity than they did at the old stadiums, and they’re still not selling out. A lot of sponsors have dropped out. Certainly the automobile sponsors are disappearing in baseball, as they have in other sports. Of course, the sport that has been hit most acutely by the recession is NASCAR—they depend most heavily on the automobile industry.
Did any of the leagues anticipate an end to the boom, or did they just assume that salaries and sponsorships would keep on rising? Did any league prepare itself well for the collapse?
Sort of. Other than Nouriel Roubini at N.Y.U., not many people saw a collapse coming. People in the financial sector certainly didn’t see a collapse coming. You’d hardly expect David Stern and Bud Selig and Roger Goodell and so on to anticipate something that the country’s leading economists and finance gurus didn’t anticipate.
But they did make some moves when they saw instances where the economic problems were creeping up on us. The N.B.A. laid off ten per cent of its front office, and the N.F.L. did something very similar. The N.B.A. is projecting lower basketball-related income going forward, which should, if it holds up, lower the salary cap. Baseball teams have heavily discounted tickets and have increased the number of comps that they’re giving out to the community.