MediaFile

Sports and economy square off

December 2, 2008

Sorting out what the economic downturn means for the sports world has become something of a sport itself.

Will consumers’ need to escape with some old-fashioned football trump their anxiety about shelling out hard-earned money for tickets, parking and hotdogs at the game?

Will TV broadcasters cash in on higher ratings, as consumers skip more expensive entertainment to spend time at home watching baseball or basketball on television? Or has devastation across the financial services and auto industries — two big advertisers in sports — doomed TV broadcasters regardless of audience size?

We already know what happened with GM and Tiger Woods.

“If you just look at the numbers, straight at the numbers, on the broadcast side in sports, anywhere — and especially when you look at football or anywhere — between 6 percent to 8 percent of their revenue is automotive and then you take out the financial picture there and now maybe you’re up to 9 percent or 10 percent,” MPG North America Chief Operating Officer Steve Lanzano told the Reuters Media Summit. “That’s a ton of money that’s moving out of the marketplace. That is very scary.”

NFL Executive Vice president Eric Grubman acknowledged that the economy is hurting the league on several fronts: it makes financing tougher; it crimps advertising revenue for its partners; and it undercuts consumer spending on everything from tickets to jerseys.

But, says Grubman, it’s not all gloom and doom.

“There is a part of the National Football League that is I believe very countercyclical and very recession resistant. And that is that when people are experiencing tough times… economic or otherwise… they go back to things that they love and they go back to things that they enjoy. And sports is one of them,” he said.

Hmmmm.

NASCAR and Major League Baseball drop into the Reuters Media Summit later today.

Keep an eye on:

  • National Amusements Inc’s negotiations to restructure its debt are moving slowly — that means a deal may not happen this year (WSJ.com)
  • Blockbuster will sell tickets for top U.S. concert producer Live Nation (Reuters)
  • Publicis Groupe is building its Asian assets with a deal to buy W&K Communications, a full-service agency in China (Adweek)

(Photo: Reuters)

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