Poor Economy Doesn't Ignore Pro Sports
BY ZACH MORETTI
If you own a television, read a newspaper, or if you’ve checked up on your stocks lately, you probably know that the economy isn’t doing well these days, to say the least.
However, few people really see the effect that this recession is having on sports. In a country where the professional sporting industries seem untouchable and everyday people watch as athletes cash their million dollar checks, it is hard for people to see how these businesses are being effected. But the fact is that the sporting industry is not immune to the economic troubles that this nation is enduring either.
In October the NBA laid off 9 percent of their staff and the NFL followed suit in December by firing 10 percent of their staff as well. NASCAR is not above it either, as they are forced to sit back and watch as racing teams merge, make massive layoffs, or just call it quits on the sport all together. The MLB appears to be the least effected by these difficult times, but when one looks deeper, they can see the drastic changes in the free agent market. Sports may seem impervious to these rough times, but that just isn’t the case.
In October, NBA Commissioner David Stern announced that the league would be forced to lay off about 80 workers, which accounts for about 9 percent of the overall staff, to deal with the economic downturn.
“We made a decision some months ago that the economy was going to be a bit wobbly, so we began [some] belt-tightening,” Stern told reporters before an exhibition game in London.
NFL Commissioner Roger Goodell sent out a memo to the league’s employees in December announcing that the NFL would have to do some belt-tightening of their own. He went on to cut 10 percent of his staff, which resulted in 150 workers losing their jobs.
“These are difficult and painful steps,” Goodell said. “But they are necessary in the current economic environment. I would like to be able to report that we are immune to the troubles around us, but we are not.”
So while the NBA and NFL players may still be racking in their millions of dollars, the behind the scenes people vital to the two sports are put on the chopping block and left jobless.
The MLB differs from the NBA and NFL in that it does not have a salary cap, meaning there is no limit to how much a team can spend so long as they have the money. With that said, look at the contract Gil Meche received in December of 2006; five-year, $55 million deal to pitch for the Kansas City Royals. Now, Meche would have been considered a middle -of-the-road starter with some potential at the time (55-44 with a 4.65 ERA for his career when he signed the deal), yet he received $11 million a year.
Today you have one of the best hitters in baseball, Manny Ramirez, still unsigned. As well as players like Adam Dunn and Bobby Abreu who only this week were able to find work, and for a substantial discount. However, if the economy was back to the place it was in late 2006/early 2007, then these players would have been signed long ago.
While the NBA, NFL, and MLB are all clearly taking their fair share of hits from the economic troubles, NASCAR appears to be taking the hardest hit of all. Then again, the first three sports mentioned primarily use some sort of a ball to play with while NASCAR uses state of the art vehicles that cost much more than any basketball, football, or baseball.
When looking at the cost of a stock car, one cannot simply look at just the cost of the vehicle itself, but all the money that goes into that vehicle as well. According to Hendrick Motorsports, the average cost of an engine for a racecar is in the range of $45,000 to $80,000.
Jim Mackinnon of the Akron Beacon Journal reported that each team is allowed 16 sets of four tires per race at a cost of about $350 to $450 per tire. That accumulates to over $20,000 dollars a race just for tires. And that’s not even including maintenance and storage of the vehicles or the fuel that’s needed to make them run either.
So how is NASCAR up and running with so many expenses to pay? One word: sponsors. Every vehicle that is raced has multiple ads slapped on them and sponsors pay a big price to get their product on a race car. But the economic decline is causing some pretty hefty layoffs from multiple racing teams, and sponsors are backing away as well. That’s what is truly crippling the sport as it is forcing smaller teams to merge together with other teams or fold due to the inability to find adequate sponsorship.
A bad economy effects everyone. Just because a sport is glamorized and put on national television for all to see does not mean that those associated with that sport aren’t feeling the same sting that the rest of us are from these trying times. Maybe the athletes aren’t taking too big a hit to their wallets, but let us not forget about the other people who rely on the sport as a source of income to pay their bills and support their family.
Let us not be so naïve as to think that these businesses are not like every other business dealing with a dreadful economy. Whether we want to admit it or not, these organizations are battling to survive just like everyone else.