by kibaxx7 on Tue Mar 24, 2009 8:01 am

NBA: empty stadiums and people watching TV
By Marc Stein
ESPN.comThe NBA has eliminated today about 80 jobs in the United States, the first major American sports league to announce layoffs because of the worldwide economic turmoil. Commissioner David Stern said last month the league would cut staff in anticipation of the downturn. He said on Sunday the figure would be about 9 percent of the American work force, and the league confirmed the number of jobs the next day. The NBA continues to hire in other countries, he said, as it seeks to grow internationally. My guess is that by January we will be down modestly in season tickets. We think we'll be up in revenue, but I just can't say for sure whether we'll be up or down in attendance because it's just so touch-and-go, because sports tickets are very much disposable income; so, we're not going to see a huge impact, but I dare say we will see some impact."
The NBA commissioner also said the league and union might have to make "some adjustments" to the labor contract when it expires in two years, but he foresees no "doomsday scenario" for the league because of the crisis, while Minnesota Timberwolves coach Kevin McHale said today in an interview that "players will need to make substantial concessions at the bargaining table". Agent David Falk predicted to The New York Times that the next round of talks will be "very, very extreme," and owners could shut down the league for a year or two if the players don't agree to the owners' demands. It’s difficult to argue with him, teams are losing money, the salary cap will drop next year, revenues are flat and, perhaps most ominously, the NBA is actually now loaning its own teams money so that they will be able to stay solvent, as there are rumors that the Memphis Grizzlies, among other teams, are in danger of bankruptcy. The prolonged recession is affecting all sports, but it’s affecting the NBA more than any others, mostly because the player-friendly system of guaranteed contracts and big signing bonuses to rookies is an outdated model. LeBron James and Dwyane Wade will always be fine, but those reserve players are going to start playing for frighteningly low salaries right soon — if there’s even a league for them to play in, or enough teams to employ all of them.
"We've managed to keep the ship afloat, and I think we will continue to do that this time," Stern said. "I'm not unduly pessimistic. I think when we see where this economy comes out, there may be some adjustments that are necessary at the team level and at the league level. But I think that in our players and in our union, we find a group of realists that are sensitive of the needs of our fans and our sponsors, and I'm optimistic from that perspective that we will be able to ultimately work something out. I'm not optimistic or pessimistic about the economy." Stern added that he is "just assuming the worst and hoping for the best as we seek to stabilize ourselves amid a storm of difficult economic times. We certainly see that our sponsors are hurting, and we're working really hard to do what we can to minimize that hurt and to keep our business going."

Stern added that the financial crisis makes growth difficult, so he'll settle for not losing much. His league is holding steady and will continue to do so, even during a worldwide economic downturn that has put many big businesses in jeopardy. "I always get into trouble saying this," Stern said. "I have been concerned for 25 years, and so I always worry about everything. But all I can say is that in a difficult economic environment we are going to maintain our attendance and our revenues, even last year. The stock market is down 30 or 40 percent," he said. "The fact that we may be flat or down a percent or 2, I'd sign up for it now in this environment for a long time because we just don't know what's going to happen."
But it's not all bad news: in past June, the NBA signed a TV rights contract with ABC, ESPN and TNT, which establishes the three broadcasting channels will pay, for the next eight years, $7,400,000,000. a 21% more than previous contracts. Economic magazine Forbes said that "if the economic crisis keeps getting worse, it's very possible that 2009 converts into the first year in a decade where a NBA team value declines." As said before, Memphis is one of the teams in rumors of bankruptcy; the Grizzlies has today 24% less spectators than in 2004, when they opened their stadium. This season, the tickets price went down 22% in the FedEx Forum, but the team is 29th in spectators. In San Antonio, if the team sells the 18.797 seats of the AT&T Center, that's a miracle. New Jersey Nets franchise value has dropped 13%, as owner Bruce Ratner is selling his team share and French soccer star Thierry Henry publicly said that he's interested in buying it and has already called Ratner. A deal is expected done for the first months of 2009.
The other side of the coin is shown by teams like Detroit or the Lakers. Detroit, the city punished by the auto enterprises like General Motors, has sold out his stadium for 246 consecutive games, while Kobe Bryant and Phil Jackson's squad season tickets have been renewed in a 99%, even at expenses that Jack Nicholson's first row seat has rised to $2,500. Cheap, isn't it?
Last edited by
kibaxx7 on Tue Mar 24, 2009 11:50 am, edited 1 time in total.
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