BP Fantasy Beat: Bashi... (01/29)
Transaction of the Day... (01/29)
2 comments have been left for this article. BP Comment Quick Links
| Home | Unfiltered | Articles | Newsletter | Statistics | Fantasy | Events | Radio | Glossary | Search |
|
|
|
|
|
|
|
January 29, 2009 Way Above It AllIs Baseball Really Recession-Proof?
"I've lived through a lot of economic recessions in my day. I've never seen anything like this. And neither has anybody else. ... And so while, in the past, I've felt baseball was recession-proof, this is different." Like movies and the mafia, baseball is usually considered recession-proof. Not because the industry isn't affected by the greater economy—no business is completely immune—but while other businesses crash, baseball presumably will hold its ground. Just don't tell Bud that. He's gone out of his way to make sure the owners know just how bad it is out there, stressing extreme financial prudence until the economy stabilizes. That means keeping costs down and reducing debt as much as humanly possible. And in case they didn't think he was serious, he brought in Paul Volcker and George Will as backup. Overboard? Maybe. But Bud and the owners have every right to be cautious. Now in its fourteenth month, the current recession is projected to be longer and deeper than its recent predecessors. We're already in some pretty rarefied air, considering that only two recessions since the Great Depression have been longer. Both of those (from 1973-1975, and the second of back-to-back downturns in 1981-1982) lasted sixteen months from peak to trough. The current one will end up being at least 18-20 months, and that's just if things break right and get turned around in the second half of this year. So what will this mean for baseball's business in 2009? Can previous downturns give us some hints?
|
Would be interested to see you guys tackle the ways in which baseball (sports in general really), which previously exhibited some acyclicality or recessions-resistance as you put it, have more closely tied themselves to economic cycles by adding thing like luxury boxes, increased corporate sponsorship, etc. If you are Citi in this environment, how much sense does it really make to blow X thousands of dollars per a game to entertain clients, whether it's at a luxury box or just regular tickets? Is that real value add? Or is that going to be one of the first thing corporations cut back on? I'd guess the latter, yet pricing is based on corporate buyers for the most part.