Conference 7.286::sports_90

I believe CBS has already begun negotiations with Major League Baseball
for some give-backs for their $1B contract based on last year's ratings 
and future predictions.

The overexposure of sports on TV and the increasing cost of attendance 
will lead to the downturn of all sports in the 90's.   I think the year
2000 will see Pay-Per-View as the standard rather than the exception.

If I had to pick a sport that will suffer most in a recession, I would
guess pro football.  There are so few games, the tv ratings are lousy, 
many of the showcase players are at the tail end of their careers.

    Since DEC is the "official" computer vendor of the NBA and NFL (that I
    know of), it probably isn't a good idea to carry our DEC expertise to a
    sports franchise ;-)
    
    Gee, I thought I was really going to enjoy working for the Suns ;-)
    
    Mike

I'd guess baseball for the biggest downturn.

Those megabuck salaries are paid for by commercial time
(advertisements), not ball park revenue. I'd guess BP revenue barely
covers training camp, equipment, travel, and lodging.

The owners are being, have been, and will probably continue to be,
stupid. As stupid as any businessman that would use operating capital to
meet other expenses. If the Budweisers of the world decide to cut back
on their advertising, those monster paychecks will be coming out of
owners' pockets.

Of course the Bud drinkers of the world are paying for all those
inflated salaries via increased beer prices. They are also paying for
the jerkoff government's lamebrained programs, because every time some
weasel faced piece of shit decides to foist another `social' program on
the Great Unwashed, Booze and Cigarettes go up again, more people quit
smoking, and then the tax hits everyone... because you certainly can't
CUT a program... now can you?

Mike JN

    Doesn't baseball have a long term contract from CBS?
    
    In hard economic times, people may be looking for a temporary escape
    from their troubles.  Although going to the ballparks may get out of
    alot of people's price range, more people may be tuning into games on
    the tube where the real attendance figures count anyway.

    Another thing, spending big bucks on free agents give the fans the
    perception that the team is attempting to stay/become competitive. 
    Without these investments in free agents, the fans may lose interest
    with the home town team if they perceive them as not going anywhere -
    particularly in tough economic times.  Afterall, you won't get too
    cheery if you turn on the tube after just losing your job to see your
    favorite team lose another one.

>Those megabuck salaries are paid for by commercial time
>(advertisements), not ball park revenue. I'd guess BP revenue barely
>covers training camp, equipment, travel, and lodging.

Well, I think it does a little more than that, especially for teams
that draw 2.5+ million attendance.  Multiply that by a conservative $20
per person for ticket/parking/concessions and we're talking $50M to
start with.     I would also guess that Spring Training is pretty much
self-supporting these days.

A team like Toronto or LA Dodgers or NY Mets that draws 3.5-4.0 million
is looking at about $75-80M CASH to work with.

That's the difference between football and baseball.   Football has 
8 real games to go on.   Even if they sell out the stadium at 80000
people at $40 a head, it's only $25M... Football survives only because of
the TV revenues.   Baseball profits from it.

    I'd look for a trend of decreased attendance at various sporting
    events, but a corresponding increase in television ratings.  As 
    economic conditions worsen people won't want to spend the bucks to 
    go to the game, but will stay home and watch.
    
    As this trend continues look for the networks to start simulating crowd
    noise, wave cheers, booing, etc, not to mention extremely discreet
    camera shots, only showing areas in the stadium where there are people.
    (The networks already do this IMO...)
    
    
    - ACC Chris
    

> That's the difference between football and baseball.   Football has 
> 8 real games to go on.   Even if they sell out the stadium at 80000
> people at $40 a head, it's only $25M... Football survives only because of
> the TV revenues.  

 Football also makes a profit from TV money unless you're a high roller like
 DeBartalo. Also Doug, they have more than 8 games to go on because all 
 ticket revenue monies are shared between the teams with the exception of
 skyboxes which the owners get to keep for themselves. That's why Robbie
 built his own stadium and Davis treaten to leave LA. That's why they love
 parity so much cause it makes every game count and put more fannies in the
 seats....

 mike

�Does anybody know how sports fared financially during the 1930's?
    
    Lee might know ;^}

    
    RE: .0
    
    David,
    
    Just curious...Why do you say that hockey seems to be the only sport
    with declining attendance?  
    
    Cath

================================================================================
Note 423.10         Will sports escape the economic downturn?           10 of 10
ICS::FINUCANE "Peace train sounding louder..."        9 lines   5-DEC-1990 08:16
                              -< ...Question... >-
--------------------------------------------------------------------------------

    
�    RE: .0
    
�    David,
    
�    Just curious...Why do you say that hockey seems to be the only sport
�    with declining attendance?  
    
�    Cath

	JUST CHECK OUT THE CROWD AT A NEW JERSEY DEVILS GAME!

				/DON

    I'm only through .7 in reading this, but thought I'd drop in this note.
    
    This topic was covered in an article in this week's Business Week. 
    Seems that CBS, ABC and NBC are all losing money in their sports
    divisions.  Ad revenues are off by as much as 50% for some time slots,
    while expenses have sky-rocketed.  Because of lower ratings (fewer
    people watching each game), they have had to provide some free air time
    in "make-ups".
    
    The average number of sports viewers, and the number of hours of sports
    which they watch, have apparently remained fairly constant.  What has
    changed is the number of games televised, and the number of competing
    events on cable channels.  (Monday night in Boston, both the Celts and
    the MNF game were on.  I flipped between them.  There've been other
    instances like that for me in just the last 6 months.)
    
    I'll try to reread the article and see if there's any other info.
    
    Bottom line, the leagues won't get the same kind of revenue from TV
    when the contracts get negotiated the next time.
    
    A&W

    
    One thing TV sports do give the advertisers is awesome demographics,
    which the advertisers are willing to pay a premium for. 

    How exactly do `they' figure out how many homes are viewing a
    particular event?
    
    Hawk

    re Sports in the 1930s
    
    At that time Major League baseball had established itself pretty well.
    Although no teams went under, a lot of them had problems at the gate.
    The Red Sox were a low-budget operation playing in a shoddy ballpark
    until the team was sold to a deep-pocketed owner named Tom Yawkey
    around 1933. The Philadelphia Athletics had a powerhouse team in the 
    late '20s up to about 1932, but Connie Mack was losing money and had 
    to sell his star players one by one, to make ends meet. The Athletics 
    were never contenders again, at least not until they moved to Oakland 
    in the late '60s.
    
    Believe it or not, soccer was reasonably popular in those days. There
    were company-sponsored teams in regional leagues all over the country. 
    Many of the players (and fans as well) were recent immigrants, and were
    given factory jobs as well as a spot on the soccer team. Unfortunately,
    once the depression hit hard, a lot factories went under and these
    leagues disappeared. The ironic thing is that this wasn't too different 
    from the way the NFL was in those days. The Green Bay Packers worked in 
    the meat packing factories when they weren't playing.
    
    Tom   

    The NBA didn't exist, the NFL was just getting off the ground, the NHL
    was a small, regional league and for a MLB team to draw over 1,000,000
    fans in a season was a big feat.  The teams were able to survive
    because the payroll costs were very low.
    
    John

    
    If the Packers packed meat, and the Steelers made steel, did the San
    Diego Chargers work for EverReady?
    
    Just wondering.
    

 Naw Dick, they worked for that plastic company that makes those little
 plastic cards that women are so fond of....

 mike

    Samuel Bronfman,one of the savviest businessmen around and former owner
    of the Expos,said the insanity of contracts has led to his decision to
    get out of baseball. He said that baseball desperately needs some form
    of a salary cap before the owners price themselves out of business.
    
    

    
    RE: .11
    
    /Don,
    
    Why are you shouting?  :-)
    
    I haven't seen a Devils home game yet this year, so I can't comment on
    their lack of fans.  I know with Minnesota, averaging less than 6,000
    fans per game, it's due to the fans' animosity towards the Stars' owner
    (whose name escapes me at the moment) and what he is doing to the team.
    
    Other than that, I haven't seen any less fans, and I see alot of
    hockey.  Now, the Patriots on the other hand....
    
    Cath

    
    The Gunns are the name that you are looking for. They want to move the
    team  to San Jose. I don't think that the NHL attendence is declining,
    if it were they would'nt be talking expansion to the sun belt. Also
    hockey is a northern sport, where as baseball is so national everyone
    can relate.
    
      I'd like to see what will happen in the 90's to MLB,NFL,NBA. Some of
    the salaries are so absurd, (I.E. that clown who just signed for the
    BRS) 6million plus w/ a HORSHIT record. Then he had the balls to say 
    the win loss column is no indication of you skills. Well in my book
    it's skill that chalks up in the "W" column. Not "well we only lost by 
    1 run". 
    
     The owners are/will price them selves out, and as the economy turns
    sour Daddy advertising dollar will soon be shrinking.  
    
    
    Should be fun,
    
    
    -Mike

    Hockey attendance is down in many cities besides Minneapolis. The
    Rangers are down,I know that.
    
    Baseball has become so absurd that it seems $2 million a year is the
    base salary.
    
    I'll make an early prediction: Look for teams like Montreal,St Louis
    and Houston to do much better than anyone would expect considering the 
    free-agents they lost. Young,hungry players seem to be so much more
    productive than fat-cat millionaires.
    
    

�                            Then he had the balls to say 
�     the win loss column is no indication of your skills.

I'd have to agree with him.
I've always felt W/L was over-rated as an indicator of quality pitching.

You can have a 20 game winner with a strong club, and if he has 4.0 +
ERA, I'm not a bit impressed.

I'm not saying that ERA is everything, there's also: how many quality
innings per appearance, home and away, record in relief (if applicable),
performances under pressure, etc.; but all other things being (near)
equal, I'd rather have a 10 game winner from the Indians with a 1.75 ERA
than I would a 25 game winner form the A's (and the accompanying salary)
with a 4.0 ERA.

Mike JN

   � Baseball has become so absurd that it seems $2 million a year is the
   � base salary.
    
    A rather quiet report came out last week that detailed baseball's most
    recent financial numbers.   From 1988, I believe, since not all the
    teams are on the same fiscal calendars.
    
           *** Baseball profits are at record high levels. ***
    
    The owners are going to have to shell out over $250 million for the
    collusion damages *AND* they're still signing 18-game losers to
    big multi-million dollar, multi-year contracts.
    
    These guys are *SO* rich they can afford to be stupid.  They've never
    been so wealthy as they are right now.
    
    Bob Hunt

    Bob,I am well aware of the type of money owners made this year,but Wall
    Street also made lots of money up to 1987 until expenses and
    speculation got out of hand. Baseball salaries seem to be skyrocketing
    because of the perceptions that if you don't pay them what they want now,
    they'll be far more expensive next year and that the money can never
    stop pouring in. How can mediocre players make $2 milliona year? ARe
    the fans really goping to be fooled into thinking money makes a player
    worth watching?
    
    I believe they have stretched the financial resources of John Q Fan
    almost as far as they can go. There has been little attention paid to
    whether baseball fans will be able to continue to shell out more and
    more money(which is being taken more and more by government and other 
    things) to watch a game that will be more and more manipulated to
    squeezing every last dollar;i.e more playoff teams ,most teams moving
    to domes to eliminate rainouts,all pay per view,etc.
    
    Someday fans will say enough is enough. Who knows when that day will
    come?
    

 > I believe they have stretched the financial resources of John Q Fan
 >   almost as far as they can go. There has been little attention paid to
 

Really? I find a ticket to a baseball game to be almost a cheap night out 
compared to a $7 movie, $30 football game or dinner with the wife at a decent
(not super expensive) restraunt. 

Even if John Q fan stops going to the game he'll still watch it on the tube.
Tube Watching means high audience share and mucho advertiser bucks for the 
networks.

I think you'll see more retractable roof stadiums rather than strick domes 
(we could use one out here).

I could care less what a player is making when I go see them at the game. As
long as they are performing as best they can. The owners have been raking in
money hand over fist for quite some time now. I'm glad the players are getting
a piece of the pie. 

I don't agree with management stupidity (ie the Sox contract to Matt Young) but
whatever the market will bear is fine with me. I just wish I had the talent and
guts to have given pro ball a professional shot.


Metz

    I read this week that the average baseball salary is somewhere around
    $550K, up $100k from last year.  Do I care?  No.  As far as I know the
    MLB owners have never opened up the books to show their profit, so if
    they're willing to shell out the kind of dough they are now, they must
    be making some serious money.
    
    					Steve

    Bingo Steve. Straight and to the point.
    
    Doc

    Actually, Steve, I've always considered that the owners made *SERIOUS*
    money when they cried poverty, so I'm at a loss to describe what they
    are probably now making.
    
    Lee

    What I don't get is how people feel that, because the owners are raking
    in higher profits, the players should be paid proportionately.  Heck,
    in my 14 years at DEC, I've seen it's profits increase hundred-fold. 
    Have our salaries increased a hundred-fold?
    
    I say bullshit to these outrageous salaries.  Players should be on some
    sort of pay-scale, no more, no less.  For example, start out with a
    scale for an entry level pitcher and call it "Pitcher I".  If the guy
    does absolutely fantastic in his first year (Dwight Gooden), promote
    him to "Pitcher II" during the off-season.  And of course, his salary
    increases according to the "Pitcher II" pay scale.  A couple more good
    years, and he's promoted to "Senior Pitcher".  A few more good years,
    and he becomes a "Principle Pitcher" (Seaver, Ryan, Carleton, Palmer).
    And, of course, pay scales shift upward (or downward) to reflect the
    economy, not the owner's profits.
    
    But of course, this is too simple and straightforward, and it makes
    sense at least to me.  Major League sports is a business first, isn't
    it?  Then, why not treat it like a business?
    
    I dunno......
    
    Hawk

 >  What I don't get is how people feel that, because the owners are raking
 >   in higher profits, the players should be paid proportionately.  Heck,
 >   in my 14 years at DEC, I've seen it's profits increase hundred-fold. 
 >   Have our salaries increased a hundred-fold?
 

It would if the supply and demand were there Hawk. If engineering was such a
 skill that I could negotiate my contract every few years for $2 million a pop
don't you think that I would?

It's all supply and demand. I've accepted the fact that the entertainers of 
this world have a skill that is in demand and are getting paid proportional to
that demand. Is it right on the grand scale of the world that Stallone gets 
$20 mill for making a movie but the guy that invents the cure for cancer gets
his monthly paycheck? No but it's all supply and demand...

Why is it right that the owners of the franchises should get to keep all the
profits? According to your theory that is how it should work.

It's not worth it to me to worry about things like this....


Metz

    I never thought of it in terms of supply and demand.  Good point, Metz.
    
    And while I don't worry about it, I'm still somewhat bothered.  What
    really bothers me is that you can no longer associate the superstar
    with the big contract.  In other words, when a superstar was rewarded
    with that $1.2 million contract, you could identify with it and pretty
    much justify it, especially when the average players made their
    $250K-400K.  There seemed to be much more balance in this "system".
    You knew who the superstars were.
    
    Now, any player can get a superstar's salary.  Heck, they're even
    getting more than the superstars in many cases.  It's turned everybody
    super greedy.  It's becoming downright ugly.  And, look what's
    happening to the teams.  Nobody cares anymore about their team. 
    Loyalty and pride are gone.  Take the A's for instance.  Their
    losing/lost 2 key players because of the big money.  For all you know,
    they could lose Canseco tomorrow to a team offering him $50 mil.
    
    It just seems all mixed up.  It's probably why I don't have any one
    particularly favorite team anymore.  Players come and go like it's a
    revolving door.  And why?  Easy BIG bucks.......
    
    Again, I dunno.......
    
    Hawk

    Yeah, I think that not being able to identify players with teams is a
    major factor. That's one reason I don't  really follow the NFL too much
    anymore. The "Big Stars" get big contracts and get injured, never to be
    heard from again. Brian Bozworth comes to mind. Sure there still are
    identifyable stars, but how many will still be around in 5 years
    with the same team?
    
    Baseball hasn't made me feel that way -- yet. While I agree that
    players should be able to make whatever money the owners are stupid
    enopugh to pay, I think it has gone a little too far. I don't think
    anyone has a problem with the TOP stars in the game making tons of
    money, but when .230 hitting utility infielders get $2 million a year,
    there's a problem. Of course, this is nothing new, only the numbers
    have gotten bigger. When Jim Rice signed a large contract with the Sox
    when he was in his prime, he said basically the same thing -- except it
    was the scrub making $250,000....
    
    As much as we cry doom and gloom, I still enjoy sports and I go to
    games whenever I can. Someday I hope to bring my kids to Fenway, etc.
    regardless of the fact that we will then be saying how "cheap" they got
    Roger Clemens to sign for, at $6 million per year. Hell, even [Joe Price
    clone] makes more than that!"
    
    Tom

    Hawk, I also think you need to ask the question of what the % of DEC's
    revenues that goes towards salaries and how it compares to the % of
    MLB's revenues goes towards salaries.  You also to factor in the
    situation that in DEC, computers are the product, while in MLB, the
    players are the product.
    
    I don't have any problem sorting out the superstars.  These are the
    guys who are getting $3-4 mil/year, while stars are getting $1
    mil/year, and the guys without seniority are getting $500 K/yr.  The
    only thing that's changed over the years is the magnitude.
    
    Most people I know follow teams, not stars.  You didn't see the Sox
    atttendance drop just because Yaz or Williams retired, did you?

    
    I'm just thankful that my Fenway bleacher season ticket, 5th row
    centerfield, great view, will be $6 a game again for the third year in
    a row.  Until the inflation hits my pocketbook (and the assumption
    that it already has is greatly exaggerated, at least in the case of 
    baseball), I really don't care what they pay them.
    
    glenn
    

It isn't just a straightforward case of supply and demand.

It is a manipulated supply and demand, and, without getting paranoid,
you could still make a reasonable case for a type of monopoly.

I'm not saying that the owners should be making the fantastic profits,
and players shouldn't, I'm saying the whole damned thing is out of hand. 

And I don't give a crap what kind of phony models, and stats, and
contrived exercises in apologetics come spewing out of the media or the
various commissioners' offices.

It'll probably continue, because there are many millions of fans, and a
few cent increases here and there in the products they buy doesn't
really register.... yet. 

But don't ever forget... bottom line... you and I pay ALL of those 
fantastic salaries.

Mike JN

    Re .35:
    
   >> I'm just thankful that my Fenway bleacher season ticket, 5th row
   >> centerfield, great view, will be $6 a game again for the third year in
   >> a row.  Until the inflation hits my pocketbook (and the assumption
   >> that it ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
    >>already has is greatly exaggerated, at least in the case of 
   >> baseball), I really don't care what they pay them.
    
   >> glenn
    
    
    Oh, but it has, indeed, and not greatly exxaggerated, either.  It
    wasn't THAT long ago that I could sit in the bleachers for $3.00 -
    $4.00.  That's a healthy increase when you consider that baseball is
    the SAME game it was five or six years ago.  It's not like it's new and
    improved and we're simply paying for the cost of improvements.
    
    We're paying for those fancy scoreboards and instant reply TV's, but
    most of all, we're paying Joe Baseball's umpteen million a year salary.
    And since those salaries are really taking off, so will the price of
    the "cheap" seats.  Just wait....
    
    As for Joe Baseball's getting umpteen million year--it's not his fault,
    or his problem.  The owner's are the one's shelling out the bucks, and
    Joe Baseball will try to get what the market can bear.  I don't know
    why anyone needs more than say, two million a year income for playing a
    few months out of the year in a *game*, but hey, it sounds nice.  :)
    
    The thing that distresses me most about the rising price of attending
    sports functions is that it is slowly, but inevitably, rising right out
    of the hands of Jim and Jane Common Worker, the people who most want to
    go to the stadium, rink, etc.  Dare I say sports are yuppifying,
    becoming something only the wealthier among us can afford.  I'd love to
    go to a baseball game, but aside from the daunting fact that the
    closest stadium in 100+ miles away, I probably couldn't afford the
    seats, much less a hot dog and a beer.  :/
    
    That's my two cents ($1.50 with inflation)
    
    kim
    

    Major League Properties (the people who are licensed to sell hats,
    shirts, etc.) showed record sales last year.  Each club received $1
    million in revenues as a result.

    >We're paying for those fancy scoreboards and instant reply TV's, but
    >most of all, we're paying Joe Baseball's umpteen million a year salary.
    >And since those salaries are really taking off, so will the price of
    >the "cheap" seats.  Just wait....
    
    What makes you think that ticket prices are directly related to
    players' saleries?  I think it's a misconception helped along by owners
    who seek to create ill will toward the players in general.  The teams
    (read owners) set ticket prices to maximize their own profits, which is
    not necessarily to maximize profit from the gate, and far from
    maximizing attendence.
    
    Dan

    > What makes you think that ticket prices are directly related to
    > players' saleries?  I think it's a misconception helped along by owners
    > who seek to create ill will toward the players in general.  The teams
    > (read owners) set ticket prices to maximize their own profits, which is
    > not necessarily to maximize profit from the gate, and far from
    > maximizing attendence.
    
    Recent Red Sox' attendance figures lead me to believe that they're not
    even maximizing profits.  Ticket prices would probably be even higher
    if that were true.  In fact, I was surprised they didn't go up another
    buck this winter, but the realization that we're definitely in a
    recession around here probably had something to do with that...
    
    glenn
    

    >Recent Red Sox' attendance figures lead me to believe that they're not
    >even maximizing profits. 
    
    That's an awfully difficult judgement to make, considering all the
    factors involved.  I believe that keeping ticket prices down creates
    some good will which turns profits in many different areas.  As I said
    they may not be maximizing gate profit, but I must assume the owners
    think they are maximizing team profit, at least in the long run.  And
    ticket prices are part of that strategy.
    
    But I agree that ticket prices could be higher still, at least in
    Boston.  Gate profit could be increased.
    
    Dan

    There was an interesting article in yesterday's Rocky concerning
    state resident's attitude towards skiing. The unscientificaly based
    survey showed a strong sentiment that local people just will not
    ski, or ski nearly as much due to lift ticket prices ($35 in some
    locations). I went to a Bronco game 2 weeks ago and the tickets were
    $30 a pop. Now they were good seats but I don't know if any seat is
    30 bucks worth of good especially in the middle of a 6 game loosing
    streak. That's a whole other issue though. The point is, there are 
    only x dollars in anyone's budget for sports and leisure time 
    activities. When it takes x+y dollars to do these things, people begin
    to find other things to do.  Sometimes the change is for the better
    and other times they feel like they have been screwed.
    
    BoB 
    P.S. Go Donks!

The lift ticket prices are misleading.
If you take the trouble to check around.... and I do... you can find all
kinds of deals for Ski the Summit [ which is Keystone, Breckenridge,
Copper Mountain and Arapahoe Basin... not sure if Loveland is part of it
or not ] and for Winter Park. 
There are Gold C Coupon Books, different stores that sell discount
tickets, and the areas themselves sometimes run specials.
You can usually find tickets in the $20-$25 range instead of $35.

Mike JN

Mike those deals are slipping every year, The Summit card is the best 
deal this year. The Gold C has dropped most of it's mid-season deals. The 
Ski Area are playing with borrowed time, they have had 2-3 years of growth
because of lousy Skiing in the Alps.    

    
    	I was reading a newspaper article a while back about the craziness
    of the salary situation in pro sports today. This particular article
    was talking about Basketball salaries. One quote that I remember
    vividly was by Red Auerbach (spelling?) that seemed most appropriate.
    It went basically like this:
    
    	"Hey, I don't have a problem with players making big money. But
    this is a business. If the business does good, then everyone can
    profit. If it does not so good, then adjust accordingly. What eats my
    crow are the players that after only 1 good season waltz into the
    office and demand a renegotiation of their contract. Well, if thats
    the way they want to operate then fine. How about everyone gets 1 year
    contracts. At the end of the year, depending on how the team did and
    how each individual did we say, 'Ok, you had a good year and the team
    did pretty good, this will be your raise' AND 'Ok, you didn't have such
    a good year, so this is how much your pay will DECREASE!'.
    
    	Sounds pretty logical to me. I would guess that many players would
    not beef so much about what they get paid if they knew they had a
    chance to make less the following year under Mr. Reds scheme.