The death of professional sports

[Fortunato]

Any owner who sells a team in any sport realizes a handsome profit, regardless of whether the team is or was profitable.

Really? When the Edmonton Oilers were bought by a local coalition of investors (about 50, if I recall), basically they paid some debt and raised some working capital....

And I don't think that the previous owner of the Pittsburgh Penguins was rolling in dough, after the team was, more or less, given to Lemieux in exchange for monies they owed him....

I think the Argo's are for sale... again... don't think that McNall/Candy/Gretzy ever got their money back... or that anyone who has owned them since is "rolling in it"....

Yes, in good times, there is always the "greater fool/ego" theory, but that has obvious limits... and it's not exactly like there is a liquid "sports team" market where you can buy or sell them readily.... The risk/reward is simply not palatable for investors OUTSIDE of the extremely wealthy sports nuts....


Best regards,

F.

 

[pistol]

pro-sports

Golf's increasing popularity is about particpation, demographics and Tiger. NASCAR found there were guys who liked to drive fast across North America not just the south. Corporate sponsorship and TV revenues pay the freight, not the average fan.

Team sports need to be looked at from a different angle. The NFL should be the model. Competitive every season. Teams go from last to first almost overnight. The cap forces management to be thoughful.

The Jays are microism of MLB. They went from a big market (spending) team in the early 90's to a small market (low budget) currently. In the progress, they become non-competitive and really hurt the sport in this country. From 50,000 a game to 30,000?
It seems hockey is following this trail. How else do you explain the salary dump deals. While the owners have to take ultimate responsibility for their stupidity in signing players to huge contracts, the players associations must decide do we want all the money now or, do we lewqve enough in the pot to ensure the long term health of the game?

 

[aptenodytes]

It seems to me that the major problem with some pro sports is that they have to pay their players excessive salaries, and I think this has come about due a the acceptance of a fallacy. That fallacy is that the different teams in a league constitute a market.
In a true market, the various competitors strive to gain as much business as they possibly can, regardless of what the consequences are for their competitors. In fact, if competitors fail, it's a good thing for a business. GM certainly would not bemoan the demise of Toyota.
In a sports league however, the individual teams are NOT business competitors, but more like divisions of on larger corporation. When teams fail, it's BAD for the other teams - they're interdependent.
Certainly GM won't allow one of it's divisions to offer significantly higher salaries to take employees from another of its divisions, yet this is in effect what happens in pro sports.
Somehow, the players have convinced the legal system and the owners that 'free market' principles should apply within a league, when in truth, that should only happen if there are more leagues competing with each other, like the WHA once did with the NHL.
All this has been good for the players, but bad for fans (higher prices) and PROBABLY bad for team owners.

 

[tabber]

SuggaBella

Part of the NFL's success, along with the shared revenues, is the popularity from gambling. I don't gamble myself, but NFL is probably last of the 4 NA pro sports to get my viewership. How many people would care without the gambling? Could the NHL's lack of success or big TV contract be partly due to lack of gambling on it, due to lack of exposure? I know, it could be a circular argument, but I'd get confused if I tried to figure it out any more, so I'm out of here. (5th post - whew!)

 

[homonger]

Was this thread sparked by the Yankees' acquisition of A-Rod? As others have said, I hardly think this deal guarantees a World Series victory for NY. Boston has upgraded its pitching staff significantly, while NY's has degraded slightly. And despite all the sluggers the Yanks have, I think their lineup still lacks good tablesetters at the top. Lofton is getting a little long in the tooth, and is not an elite lead off man anymore. I think the Yankees will hit a lot of solo homeruns this year.

Last summer, we were all saying how the LA Lakers were a lock for the NBA title. They still may win, but this season has hardly been a runaway for them.

 

[2cent]

Money talks. The baseball exhibition season has barely begun, and they have already given the World Series title to the Yankees. This is not good for the sport.

 

[Maddog]

I think the Argo's are for sale... again... don't think that McNall/Candy/Gretzy ever got their money back... or that anyone who has owned them since is "rolling in it"....

FYI - they did turn a small profit, but when McNall had his legal problems - had to pull out - Candy couldn't do it on his own. Plus the rent at SkyDome is brutal. But the Argos aren't for sale - they were just sold back in November. Season ticket sales are actually up this year. To me - the CFL is the epitome of professional sports. Its what it used to be - low ego guys who play for the love of the game, spend time in the community and actually reach out to the fans. All the other leagues could learn something from CFL players. Dollar for dollar, still the best entertainment value in town.

 

[The Sage]

Sports

I agree. I used to love watching sports now there are so many freakin commercials iat ruins the game. Ever go see a live basketball game? The last 2 minutes takes forever which they run a zillion commercials during every timeout. The salaries have skyrocketed and the media ponies up the extra $$$ for broadcasting rights and guess who is stuck with higher cable bills, loads of extra TV commercials, higher prices for tickets, guess? Baseball is a joke the Yankees (who I used to like) go out and buy whoever they want. It has ruined the sport. Hockey is headed for a lockout. US football is the only sport I watch.

 

[scubadoo]

Traditional Market based economics do not relate to major competitive sports in North America and that is where the owners and players cannot agree. Large market teams such as the NYR can spend like crazy and small market teams do not have the luxury of a 10 million population fan base and local TV market which generates a large amount of local TV revenue. Let us keep in mind that salaries have increased from an average $733,000 in 1995, when the labor agreement took effect, to $1.76-million. Hockey is the only major sport without some form of salary cap or tax, and it lacks gold-plated national TV deals to offset costs. Each NHL team received about $6-million a season from such deals in the United States and Canada. That does not come close to covering a small part of a small market NHL teams payroll. To compare with the NFL teams that have a $71.1-million salary cap last season, each team received about $77-million from TV. That means ticket sales, local media rights and advertising must pay most of hockey's bills, and that apparently is not doing the job.

So until the NHL players come to the realization that almost all NHL teams do not compete on a competitive advantage were economics are concerned, I fear that we will be faced with a long lockout. When the league does come back that it will be a smaller league (16 teams probably, which isn’t a bad thing), in which the average player possibly has lost his job. Figure if 14 teams go, multiplied by 24 players per team; suddenly the NHLPA will have lost 336 players over slightly less than half of the union.

 

[Fortunato]

FYI - they did turn a small profit, but when McNall had his legal problems - had to pull out - Candy couldn't do it on his own. Plus the rent at SkyDome is brutal. But the Argos aren't for sale - they were just sold back in November. Season ticket sales are actually up this year. To me - the CFL is the epitome of professional sports. Its what it used to be - low ego guys who play for the love of the game, spend time in the community and actually reach out to the fans. All the other leagues could learn something from CFL players. Dollar for dollar, still the best entertainment value in town.

Mr. Maddog,

Hmmm... hadn't heard the deal was closed in November. My mistake. And while I'm not completely convinced that McNall et. al. made money (they had a tendency to do contracts outside of the teams back then, and I think that "The Rocket's" was one of those "personal services" variety), I'm happy enough to believe it... regardless, I'm positive there was no windfall, and my point is still valid....

Moreover, I'm glad that McNall had to leave... the idiocy that he brought to the NHL could never fly in the CFL.... bloody jackass.

I too appreciate the CFL... although I wish it would try to act to reduce the other thing that I think seriously hurts professional sports... player movement. In the CFL, it's often more about scratching out a living than greed, but the impact is the same when your fans have to "re-learn" who is on your team every year....

Best regards,

F.

 

[Fortunato]

Traditional Market based economics do not relate to major competitive sports in North America and that is where the owners and players cannot agree.

Yes they do. You can't just "shut it off".

The problem is that some participants fail to understand what their "market" is... along with exactly what the competition is. The players argue that the owners are competitors with each other, and that is simply not true. But remember, their actions are motivated by other things, not necessarily economic theory.

Either way, supply and demand will dictate economic outcomes. It won't make everyone happy, but market economics WILL do what it always does....

Best regards,

F.