No Major League sports team has ever collapsed... yet. If a team has gotten into financial difficulties, it has either been sold, re-located or merged into another team. So have leagues. For example, the American Basketball Association was merged into the National Basketball Association. Ditto for the American Football League, which was folded into the National Football League.
But there is no doubt times are changing for the worse. In Los Angeles, ticket holders of the VERY popular Lakers, have been forced to part with some seats at BELOW face value. Until very recently, this has been unthinkable!
It's very easy to figure out the problem: most teams are stuck with very costly long-term contracts, while costs of attendance, for the most part, remain sky high! In this economy just how many folks can dish out a few hundred smackers to bring a family of four? By the time you add up the ticket, parking, food and beverages, things can get quite pricey.
Bringing down salaries may prove problematic, at least in Baseball. Players are well known for their lack of flexibility, having gone on strike numerous times and even once forcing the cancellation of the World Series!
Now don't get me wrong. I'm not necessarily blaming the players - the owners were every bit as stubborn!
Reports are that Major League Baseball has lent money to Texas Ranger owner Tom Hicks and will continue to do so until the team can be sold. Hicks made the mistake of signing player Alex Rodriguez to a ten year deal worth $252 million, the highest in baseball history! Yet despite the addition of Rodriguez, the team finished LAST in each of the following three seasons!
The Yankees cut their most expensive seats in half. But, before you whip out the hankie and begin to boo-hoo, those tickets originally went for more than $2,500! So now they're a mere $1,250 and change. Those generous guys! I would think of this as something of a Christmas gesture, but the decision took effect last May.
But the generosity just keeps on a comin'. Hockey's Ottawa Senators just announced free parking! But before you jump for joy, there is a significant catch. Beneficiaries will be limited to those fans having season tickets for at least 5 years! The Senators will also reduce ticket prices next season. But some of those reductions are a whopping 2%! Others will reach 33%, so we can't entirely condemn their gestures.
Of course, these mighty acts of generosity are the result of falling attendance. So far, however, the drop in visitors has been held in check. Baseball attendance last year fell by a minor 5%. Football attendance has also fallen, but less than the 5% experienced in Baseball. Basketball attendance, thus far, is actually UP as is Hockey's!
It would seem inevitable that attendance will fall next year for nearly every league. But, that remains to seen.
I hope you had a Happy New Year and aren't too hung-over to read today's blog.
Tomorrow we'll revisit the Stock Market.