Sunday, February 1, 2009
Economy Hits Sports, Too
Thanks to Handsome Significant Other for this one:
It didn't take long for the recession to spread its effects into one of the most overpaid segments of the economy - sports.
The release of Joe Torre's tell all Yankees book came along with revelations that Yankees pitcher Andy Pettite ran into the "New Economy" head on. The team offered the veteran 10 million dollars to re-sign. Nope, said Pettite. He was looking for 15 million. And after shopping around, discovering nobody, just nobody, was going to pay him that amount of money, he came back to the Yankees and said okay. He'd accept 10 million. The Yankees said no go. The offer was now 5 million. And he took it.
It's not so much a reflection of Pettite's skills, though he is certainly not a young buck anymore. It's the economy. Even the legendarily generous NY team is tightening up the spending for most players.
There are 30 free agents in major league baseball, all looking for new teams. Being a free agent used to be the holy grail - once you reached that status, you were pretty well assured of a mind-bogglingly large salary after a heated bidding war among MLB teams. Not this year.
Manny Ramirez, for instance, never expected to still be without a home this late in the winter. And he's got an agent who's considered a master of the negotiating game. But so far, only the Dodgers are playing - everyone else would love to have him, but the salary he would command is a luxury now.
The economy is bound to hit the teams where it hurts - in the wallet - and they know it. The rising costs of ticket prices have put a day at the ballpark well beyond the comfort level of most fans. Boston, the most expensive ticket in baseball, had an average fan cost index in 2008 of $321. That's the estimated cost of a day at the park for a family of four, according to the Team Marketing Report.
Sixteen of the thirty teams are freezing or cutting ticket prices in 2009. They are anticipating trouble.
The Super Bowl isn't immune - secondary ticket prices are down almost 40%.
So what's next? Movies? Films, during the Depression, were one of the few things that saw a steady business. We loves us our escapism when times are tough. But movies aren't cheap to make, actors are remarkably overpaid, and the prices at the ticket counter have risen steadily. And they're not the only game in town now. We've got DVDs, we've got BluRay, we've got television and we've got Hulu.com.
Marketers in every sector are responding to the new national mood - Allstate encourages us to insure what we've got with a company we can trust - Walmart is positioning itself as the place to save money and downsize. It's a new world. And indications are it's going to be around for awhile.
Maybe stickball is going to make a comeback.