Sport has at times been thought of as being like a mortician's, in that they are recession-proof. And while many wondered why sport could have been so smug, it is also interesting to note this may still prove to be true. There have already been many effects of the economic crisis on sport but what remains to be seen is whether the effect is as dramatic, long-term or intense as in other sectors.
The thinking behind those that suggested sport was recession proof was that fans would always find a way to buy a ticket or pay to watch the game on television. And as noted earlier, this may still be true. Those who think the impact will be enough to have a long-term effects note that sport has changed considerably in that it is no longer riding on the backs of regular fans, but instead has evolved into being more intertwined and dependent upon business largesse. This change may have distanced sport, at the professional level anyway, from the common fan. The second change is that professional sport has evolved into the realm of entertainment. Sean Jefferson of the global media network, Mindshare, has sounded in the Guardian newspaper a note of caution: "The risk of treating sport as entertainment is whether changing a sport such as Twenty20 cricket, for example, is sustainable, or whether the people you bring in will just move on to the next big thing. If you treat fans like consumers, they will act like them: turn up to a game one week, but go to the cinema the next. Fans love sport in a way that is rare in other forms of entertainment. People don't go down the pub and stand on chairs to cheer Coronation Street. Will the common fan be willing to forgive and forget?" The challenge today then is whether sport can make amends with its former suitors while business benevolence may be waning.
A short-term answer to this question may be `No'. As an example, the National Hockey League in North America, which is heavily dependent on fan ticket revenue, has not been able to attract crowds that may have been more common in the 1970s and 1980s. As a result, several teams are in trouble. As reported in Canada's Globe and Mail, close to half of the teams are experiencing attendance downturns, with a few on the brink of collapse. The threats are many with some because of the US credit market impacting arena deals and owners not being able to take on losses as their primary industries are suffering.
The challenges faced by the NHL were being felt as early as September, as reported in Sports Illustrated with the headline, "NHL could be on thin economic ice." Author Jim Kelley reflected on how it was fitting that the NHL started with games overseas due to a faltering American economy as the league needed every koruna, krona and euro it could get its hands on. Kelley argued that the NHL may not feel the pinch this year but companies may not sign on for next year's luxury suites, and the potential loss of revenue from the league's complicated revenue sharing program and a recent trend to sign young players to long-term contracts (a trend occurring before the financial reality of today) may signal a perfect storm of financial challenges.
Another North American league, the Arena Football League (AFL), recently cancelled its entire 2009 season to reorganize. While AFL did not cite the weak economy as one of the driving forces, it is likely to have had an impact. Even Major League Baseball (MLB), once thought to be one of the most insulated sports from economic downturns, is reacting to the upcoming challenges. MLB Commissioner Bud Selig noted in a Reuters report that "There used to be a theory...that we seemed almost to be recession proof—this is different clearly." Examples include American financial giant Citigroup facing criticism over having signed on for a 20-year naming right for the New York Mets new stadium, while laying off thousands and receiving a financial lifeline from the American federal government. The automotive industry in the US, which also recently received a financial package from the government, has reacted in due course, with General Motors announcing that it would not be purchasing television commercial spots during the 2009 Super Bowl nor renewing some golf sponsorships.
There are of course many other examples from around the globe where sports are suffering from the financial crisis. Headlines include: "F1 targets costs as credit crunch bites", "Credit crisis could hurt Russia 2014 Olympics", "West Ham concern over Iceland bank collapse", "£3 bn debt in English football worry FA chairman", "J&J out as Olympic sponsor", and "NBA reacts to tough economic times."
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