It is not uncommon these days for sports teams to struggle making money. As a country, we are in a recession, some might call it a depression but nevertheless many people are still supporting their favorite teams. In a recent article by Charles Davidson, Atlanta Federal Reserve Staff Writer, he mentions many ways how the sports industry still accumulates a heavy fan following, despite the down economy. However though loyalty still remains for some pro teams and major universities, teams and schools in smaller markets are hit harder by the economic downturn. This paper will shed light on Davidson’s information as well as offer some creative ways teams can attract fans.
According to Davidson (2009), “Sports as an industry, especially the most high-profile leagues and franchises, is weathering the downturn comparatively well. Even as unemployment has risen dramatically—more than tripling in Florida, for instance, from July 2006 to July 2009—many people are still spending at least some money on sports”. In the south football is a passionate and emotional release for many fans. In 2008 five Southeastern Conference schools brought in a collective $303 million dollars. Which resulted in ESPN and CBS paying the conference a 3 billion dollar deal to broadcast their games on their networks over the next 15 years (Davidson, 2009). Concluding that despite a crippling economy, people still want to see and support their favorite teams.
Although success still looms for some minor league and pro teams, many others have not been so lucky. The Jacksonville Jaguars experienced blackouts for some of their home games due to them not selling out prior to kickoff (Forbes, 2009). After 22 years of existence the Arena Football League folded altogether in 2009 (Davidson, 2009). Even Nascar and stock car racing have experienced the effects of the economy. According to Davidson, high fuel prices and rising unemployment have caused racing fans and automotive industry sponsors to cut spending (2009).
However, despite the rough situation many teams find themselves in financially, some have weathered the storm by implementing new and creative ways to generate income and sustain their fan loyalty. Even during a lockout scenario like the NBA is currently facing, teams find it important to continue to market their team brand in an effort to combat the apathy a typical fan may experience during tough business negotiations. For example, this year the LA Lakers ran a campaign on their website in which all their team jerseys were on sale for 50% off the regular price. This was a marketing idea sure to attract the eyes of die-hard fans but also a mechanism to accumulate merchandise dollars despite games not being played. In some cases joint ventures in which the state allocates funds through sports teams in an effort to stimulate the industry as well as the local economy are established. In Davidsons article he writes that,
Meanwhile, Miami-Dade County and the city of Miami this summer agreed to use hotel room taxes to finance the majority of a stadium for baseball's Marlins that will cost—after paying off bonds over 40 years—about $2.4 billion. Officials broke ground on the new ballpark in July.
That same month, Louisiana's state government finalized a deal to help keep the Saints in New Orleans through 2025. That arrangement includes spending $85 million in state funds to renovate the team's stadium, the Louisiana Superdome, and leasing space for state agencies in a New Orleans office building owned by Saints owner Tom Benson (2009).
Despite state efforts to assist in drawing fans to sports teams, the franchises themselves should offer more affordable ticket options for their fan-base. Teams having economic troubles should not continue to offer high-priced game tickets and food prices that further hurt the customer. Instead they should implement more options for fans that are affordable. A layaway plan for tickets prior to the season is a good idea for those who are interested in holding season passes (Lefton, 2008). Another way to boost fan attendance could be re-arranging the food menu into meal options instead of itemized or a la carte items. For example, one hotdog may cost $5 and a soda may cost the same at some sporting events. Instead of individual food purchases, it may make sense for some teams to throw in fries or some other item to complete a possible $10 meal deal. In the end the teams should continue to find new and creative ways to market to their fan-base in an effort to sustain their loyalty. Although many people are passionate about their teams, it should not be ruled out that as a country we are all facing tough economic situations. Without teams sharing an initial empathy towards the fan on an economic level many of them may find themselves cutting back or folding altogether.
Sources
Davidson, C. (2009). Sports Still Draws Fans Despite Recession. Retrieved from
http://www.frbatlanta.org/pubs/econsouth/econsouth_vol_11_no_3_sports_draw_fans.cfm
Lefton, T. 2008, December 3. Saints Offering Season Tickets with Six Month Layaway Plans. Layaway Sports. Retrtieved from
http://www.elayawaysports.com/news/saints-offering-season-tickets-with-six-month-layaway-plans/
NFL Team Valuations. 2009, September 9. Forbes Online. Retrieved from
http://www.forbes.com/lists/2009/30/football-values-09_Jacksonville-
Jaguars_306892.html
Posner, R. 2011, August 23. Let’s be Honest: We’re in a Depression, Not a Recession,
And There’s No End in Sight. The New Republic. Retrieved from
http://www.tnr.com/article/economy/94055/posner-recession-
depressions-entitlements
The Bargainist. 2011. Lakers Store coupon-50% off jerseys. Retrieved from
http://www.bargainist.com/deals/2011/10/lakers-store-coupon-50-off-jerseys/#b
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