Dec 31st, 2008 – A Year Sports Fans Might Want to Skip
On the morning of September 15th, 2008, the news from Wall Street was disastrous. Later dubbed as another “Black Monday” by the media, John McCain insisted in a speech that same morning that “the fundamentals of our economy are strong.”
With those seven little words his run for the American Presidency effectively was over.
For the majority of voters, he was so clearly out of touch to the realities of living in tough financial times that all the Moose Hunters and all the Joe the Plumbers couldn’t put his campaign together again.
You’d think that everyone in the world of sports would have taken notice of that little bit of news. However, following that event, along with several dozen more major corporate collapses and the worst unemployment figures in 40 years, the first major sporting league in their first opportunity to demonstrate a new found restraint, that would be baseball in their winter meetings, proved that some still have their collective heads buried in the infield dirt.
Or elsewhere.
The New York Yankees spent $423 million in long-term contracts – on just three players.
That kind of jaw dropping disconnect was not lost in the daily deluge of disastrous financial news. Coming just days after the big three automaking CEO’s came hat in hand to Congress via corporate jet, the pure ballsiness of the Yankees was roundly ripped.
They, as they invariably do, voiced indifference to the protests insisting they “can afford it.”
The thing is, they really can’t.
Sure, with their TV deal – they own their own TV deal – and with the New Yankee Stadium (The House that Free Agency Built?) opening up, there will be no tag days any time soon for the Steinbrenner clan.
No, it’s the optics that is just so bad. Going far beyond the usual, “Damn Yankees” shtick, in 2009, they will be the prohibitive favorites and outside of New York, they won’t just be hated as they traditionally have been, they will be vilified.
In 2009, all indications are tolerance for big spenders (unless it’s the government) will come to an inglorious end. A worldwide recession and in some places depression, combined with a new Obama-driven “we’re all in this together” attitude will hit sports like never before.
Beyond that attitude, there are the actual fiscal realities as well.
Take your humble TV or example, which have been the sporting world’s bread and butter for the past few decades. Well, those days are gone. Although all the major sports leagues have their contracts locked up through next year, television is changing. Spurred on by the DVR revolution, where viewers are provided the opportunity to skip through commercials, advertising revenues are plummeting. Networks are feeling more than a pinch – they are in full-blown panic.
Sports, due to its live action nature has long been thought to be DVR immune, but that’s irrelevant when advertising budgets are being slashed.
Every major sports league is in for a reality check when they renegotiate – with some particularly negative media types speculating that future offers could be cut by as much as half. Considering the NBA gets about $930 million a year, MLB $670 million and the NFL, $3.6 billion from its television partners – that will be a devastating.
Those in sports know that their collective bubbles are about to burst and a day of reckoning is coming. For many, that day has already arrived. MLB, the NBA, the NHL and even the richest of ‘em all, the NFL, are all laying off staff.
As for the teams themselves, so tied in with corporate America with stadium licensing, luxury boxes and company season ticket holders, the bottoms are dropping out of their bottom lines.
A prime example is the Yankees’ cross-town rivals, the New York Mets. They were counting on Citigroup forking out $400 million over 20 years to have their name on their new ballpark that opens in the spring – the same Citigroup that just laid off more than 50,000 people and is receiving billions in federal bailout money.
Two New York City Council members are proposing the name be changed to “Citi/Taxpayers Field.”
Corporate sponsorship is so tight – two of the best brands there are in sports, the Olympics and Tiger Woods, both took a hit. Johnson & Johnson, the #1 packaged goods manufacturer in the world, cancelled its $100-million deal with Vancouver for the upcoming winter games. GM dropped Woods after their 9-year relationship.
Topping all those however is the Super Bowl. For the first time ever, its likely not going to sell out its advertising allotment. The former surest of sporting “sure-things” has finally woken everyone up to the reality of just how tough the times will be in 2009.
Everyone except the New York Yankees that is.
All-in-all 2008 was a truly great year in sports, and as it comes to a close it is tradition to wish everyone a Happy New Year.
The only problem is, for most in the sports world, 2009 will be anything but.
Cheers – Gavin McDougald – AKA Couch
