Mixed Economic Signals

The country’s current economic conditions have definitely had an effect on the sports industry.  Even though sports are often consider “recession-proof,” ticket sales and sponsorship revenue has declined this year and several teams have even had to make budget cuts and reduce staff.  There is a good article on MSNBC.com (11/11/08) discussing the recession’s impact on sports, paying particular attention to the effect on “second-tier” sports that don’t have the level of guaranteed corporate and media revenue that the major sports have. 

Speaking of media revenue, a news item just came out today from SportsBusiness Daily reporting that the BCS may move their games to ESPN.  They’ve received a large bid from ESPN (don’t know the details), while Fox has offered a 25% increase over their current contract.  That seems reasonable especially considering the economy, but the BCS wants a 50% increase!  I assume that the ESPN offer has to be around this amount, so maybe the economy for sports (at least some of them) isn’t in such bad shape.  Maybe teams will try to weather the storm on the ticket side by trying to make up the revenue on the media side.  People are still watching the games – they just can’t afford to attend them!