Sports also paying a price amid struggling economy

Count Kent Haines out when it comes to buying Boston Red Sox or New England Patriots tickets for the foreseeable future.
Those clubs have the highest average ticket prices in Major League Baseball and the National Football League. And because of the economic crisis, the Haines family of North Kingstown, R.I., is cutting spending.

"In this sky-is-falling economy, attending a pro sporting event is last on my list," says Haines, recalling that in May he dropped $250 for tickets, parking, food and a souvenir for himself and his 10-year-old son, Zach, at Fenway Park. "When you combine the cost of the tickets with the effort it takes to get our fannies in the seats, watching on TV with my wife and kids sounds pretty good right now."

Haines' story is echoed by a rising number of fans across the USA, a reflection of how the worst financial crisis since the Great Depression is stretching and even severing the bond between fans and sports teams.

At a time when many professional and college sports teams are expanding stadiums, adding expensive luxury suites and raising ticket prices to increase revenue, the economic crisis is exacerbating a disconnect between the teams and fans who are being priced out of live sports.

The sports industry remains relatively healthy: Fans shelled out a record $32.06 billion on tickets, parking, concessions, premium seats and on-site merchandise sales in 2007, a 4.8% increase from the year before, says David Broughton, research director at Street & Smith's SportsBusiness Journal.

Average ticket prices for the NFL, MLB and NHL all rose 5% to 10% this year, according to Jon Greenberg, executive editor of Team Marketing Report, which tracks ticket prices.

But even as wealthy teams such as the NFL's Dallas Cowboys, New York Giants and New York Jets are asking season ticketholders to pay thousands of dollars — or even hundreds of thousands — for seats in luxurious new stadiums, there are signs of economic stress throughout sports.

Cash-strapped fans nationwide tell USA TODAY they're buying fewer tickets to sporting events or trying to unload those they have to family, friends and strangers. Some are opting for cheaper seats and spending less on food, drinks and souvenirs. Others are giving up live sports for their high-definition TVs.

Meanwhile, after prosperous years in which teams routinely jacked up prices, some leagues and clubs are signaling to fans that they feel their pain.

NFL Commissioner Roger Goodell announced Thursday a price cut on some Super Bowl tickets. But 25% of the seats will be priced at an all-time-high $1,000, league spokesman Brian McCarthy said.

Teams in other sports are cutting prices, offering goodies and retail gimmicks such as "buy now, pay later" to get ticketholders to keep buying.

The specter of empty seats, unsold luxury boxes and bankrupt or vanishing sponsors is striking fear into industry players large and small. Leagues and teams are laying off staffers and taking a hard look at expenses:

•Anticipation of a slowing U.S. economy has led the NBA to lay off 80 employees, or 9% of its domestic work force, Commissioner David Stern said this week.

The Charlotte Bobcats laid off about 35 staff members Sept. 26. Bobcats President Fred Whitfield said the team must become "more efficient as a business in the current economic climate."

"Six months ago, we were saying sports was recession-resistant rather than recession-proof. But I don't think anything is recession-resistant," NBA Deputy Commissioner Adam Silver says.

•The NFL's Goodell said Tuesday that the nation's richest professional sports league — one that receives $3.7 billion a year from TV networks alone — faces "some significant belt tightening."

Ticket prices "may be an issue we deal with coming into next season," Goodell added.

•Attendance at NASCAR races this season is down "in the single digits" percentage-wise, spokesman Andrew Giangola says.

Several tracks are trimming ticket prices for 2009 races. Michigan International Speedway is reducing prices on 23% of its seats for its two Sprint Cup races next year, spokeswoman Sammie Lukaskiewicz says.

"People are struggling, but they still want to see NASCAR racing," she says.

•After suffering a 13.4% attendance drop this season, baseball's Oakland Athletics will reduce average ticket prices by 5% for the 2009 season.

"The economy's hurting everyone's budget. We have to keep our product affordable," Athletics vice president Jim Leahey says.

•Other teams are stepping up "buy now, pay later" campaigns to try to make season-ticket packages more attractive.

The NBA's New Jersey Nets chief executive officer, Brett Yormark, is pushing a full season-ticket package that allows buyers to attend games this fall — but not pay in full until January. More than 100 customers have signed up, the team says.

In the NHL, the Los Angeles Kings allowed full-season-ticket buyers to stretch payments over an eight-month period ending in January, says Mike Altieri, vice president of broadcasting. In another twist, the St. Louis Blues took a cue from Priceline.com and invited fans to "name your price" for tickets.

•To urge season ticketholders to renew early, the NBA's Miami Heat offered prizes including $5,000 for property taxes and $4,000 for utility bills, spokeswoman Lorrie-Ann Diaz says.

"We at the league and our teams don't want to see our season ticketholders lose their location because of a short-term economic issue," Silver says.

Fans have complained for years that rising ticket prices — and new stadiums that emphasize boosting revenue through luxury suites and club seats — have been driving the middle class out of stadiums.

Many "old-time fans who aren't so well-to-do have been priced right out of the market," says Raymond Sauer, professor of economics at Clemson University and founder of The Sports Economist blog.

"They've created a set of disgruntled fans who used to go to games but now watch on TV," Sauer says. "They've (been replaced by) richer, corporate fans."

The anger of "real sports fans" was building before the economy turned sour, says Brian Blight, a Detroit Lions fan from Peoria, Ill. He says that for fans increasingly weary of rising ticket prices, $7 beers and $20 parking fees, the downturn has a silver lining.

"Sports has it coming," Blight says. "It's just been greed, greed, greed."

Blight vows not to spend another nickel on the Lions until they cut ticket prices and start winning. He says rising gas costs caused him and his wife, Edith, to eliminate several planned trips to Chicago, St. Louis and other Midwest cities to see games involving baseball's Detroit Tigers and St. Louis Cardinals.

Blight says he hopes the economic downturn transforms sports, as it did with real estate, from a seller's to a buyer's market — and gives fans the power to demand lower prices.

"Fans need to stand up — and speak out," he says.

Sports economist Andrew Zimbalist of Smith College in Northhampton, Mass., predicts the economic shakeout will drive down ticket prices, flatten spiraling player salaries in pro sports and force the sale of struggling franchises. A tight credit market, he adds, could delay some stadium construction projects.

Suite deals going sour?

The economic crisis coincides with a nationwide building boom in stadiums stuffed with pricey luxury suites. Such boxes can run from $200,000 to $1 million per year. Food and booze are extra.

The Dallas Cowboys and New York Yankees, Mets, Giants and Jets are getting top dollar for suites in their new buildings. The Giants and Jets will share a venue. But Bill Dorsey, executive director of the Association for Luxury Suite Directors, says teams across all sports in Seattle and Atlanta are struggling to fill boxes in their existing facilities.

The economic crunch has put a focus on personal seat license fees, or PSLs. These are one-time charges, often running thousands of dollars, that give fans the right to buy season tickets for an extended period of time.

The Cowboys, Giants and Jets are using PSLs to help finance their new stadiums opening in 2009 and 2010. The teams report their PSL sales are strong, but some of their fans are increasingly anxious about the cost.

Steve Thurman of Dallas says he has "buyer's remorse" after forking over $8,000 to the Cowboys this year for the right to buy two upper-deck seats in the team's new stadium for the next 30 years.He still has to shell out another $2,330 for his 2009 tickets and a parking pass.

"With the way the economy's going, I would not have made that deal," Thurman says. "I might be at the corner of Texas Stadium with a tin cup before this is all over."

The economy's downturn also has created havoc in what had been a lucrative arena for sports teams: naming rights.

During the boom years, many companies paid millions of dollars to plaster their corporate monikers across stadiums and golf and tennis tournaments. But the recent frenzy of bankruptcies and mergers on Wall Street has put some deals in limbo.

Take Philadelphia's Wachovia Center, home of the NBA's 76ers and the NHL's Flyers. The arena is poised for its fourth name change in 12 years because of Wells Fargo's proposed takeover of Wachovia. Julia Tunis Bernard, a spokeswoman for Wells Fargo, says "it's too early to tell" whether the company will rename the arena or the PGA Tour's Wachovia Championship.

With Wall Street reeling, the Giants and Jets are still searching for a company to buy naming rights to the $1.6 billion stadium the teams will share starting in 2010. Negotiations with the German firm Allianz fell apart after fans and Jewish groups criticized the insurance company's historical ties to Nazi Germany.

Teams that sell naming rights to unstable companies can get left holding the bag. Just ask the Houston Astros.

In 1999, Enron agreed to pay $100 million over 30 years to put its name on the new Enron Field. Within two years, Enron filed for bankruptcy. The team paid $2.1 million to buy back the rights. In 2002, Minute Maid stepped in with a 28-year, $100 million deal to rename the stadium Minute Maid Park.

The good news?

The NFL, MLB, NBA, NHL and NASCAR are protected by multiyear TV and sponsorships deals, says Bill Daly, deputy commissioner of the NHL. He says "60% to 70% of our revenue is contractually committed already. It does provide a layer of security."

'People want entertainment'

For some fans, the rising cost of attending games is still worth the experience.

Rick Sanderson, a University of Tennessee graduate, says he'll pay whatever it costs to attend Volunteers football games. "People want entertainment. College football is entertainment," he says.

Mark Franklin of North Scottsdale, Ariz., says his season tickets to the NHL's Phoenix Coyotes "are the only positive thing" in his life right now.

"The economy's going to hell in a handbasket," he says. "I want to enjoy the game and take my mind off the financial pressure that's out there."