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US: Losing streak sees precious few signs of recovery
Wed, Oct 22, 2008
Reuters

SMALLER crowds are only the first domino to fall for United States sports leagues.

Indeed, analysts said that these leagues could see lower corporate spending, flat or declining revenue and stagnant team values in a global recession.

Teams have begun offering deals on tickets, cutting jobs and, in the case of the National Football League, re-opening its labour deal with players to reduce costs.

While revenue remains strong, the officials no longer see the sector as recession- proof.

Signs of a slowdown abound, including a decline in regular-season attendance for Major League Baseball, soft season-ticket sales for the National Basketball Association and an NFL memo citing revenue pressures.

Throw in cutbacks by sponsors in such struggling industries as financial services and automotive, and the US sports industry is facing more trouble.

"We'll cross our fingers like everyone else and hope that there's some type of economic recovery and any negative impact on our business will be a minimal one," National Hockey League deputy commissioner Bill Daly said.

However, things could get worse for fans if a recession leads sports leagues to seek lower-cost deals with players, resulting in strikes.

Corporate sponsors are also tightening their belts.

Carmaker General Motors will not run TV ads during next year's Super Bowl, after shelling out almost US$46 million (S$68 million) over the last four years.

Lower sponsorship spending is the likely result of mergers in the financial sector brought on by bad mortgages and tighter credit, analysts said. Advertising budgets will also suffer.

As Mr William Chipps, senior editor of IEG Sponsorship Report, said: "These companies are trying to stay afloat, and they've got much bigger concerns than whether they will continue to sponsor pro-sports teams."

 

 
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