Recession-Proof Sports Leagues
Whether you call it a slowdown, a holding pattern or the dreaded R-word, it's not exactly news that our economy is in something of a bad way. It stands to reason that entertainment and other frivolities would be among the first items people would cut from their budgets. So why is it business-more-or-less-as-usual for the National Football League (NFL)? (For related reading, see History's Largest Pay-Per-View Buy Rates.)



TUTORIAL: Budgeting Basics



It now seems like centuries ago, rather than 16 weeks, but the NFL was recently on the verge of a labor/management bloodbath. A jeopardized season eventually commenced without interruption once both sides reached an agreement for the common good. TV ratings are higher than in 2010, and the only reason attendance hasn't increased much is because it was near capacity to begin with.

NFL
If all you looked at was NFL attendance figures, you'd have no clue as to the problems facing the greater economy. People can scrimp on their other indulgences, but professional football is non-negotiable for many. The NFL's immunity to economic hardship is a classic example of how wonderful it is when a third party picks up the tab. It starts with the NFL's own acknowledgment that 95% of fans never attend a game.

It's true. If the 16 biggest teams in the league all host and sell out games on the same weekend, that's barely 1 million attendees in a nation with 300 million people. If you're among the 95%, understand that going to an NFL game is a lot of work. Parking is a hassle, getting there and home again is a bigger one and you're going to be surrounded by tens of thousands of boisterous people, some of whom will be enjoying an alcoholic beverage or eight. And the weather's probably going to be uncooperative. America's secondbiggest city (Los Angeles) hasn't had a team for many years, and hardly anyone there is clamoring for a new one. (Watching games live can also be every expensive. To see where the NFL ticket prices rank, read The Most Expensive Sports Tickets.)

If you stay at home on a Sunday, it's almost as if the NFL goes out of its way to accommodate you. There are multiple camera angles, replays and instant access to scoring drives on the Red Zone Channel, which is better than life itself. All you have to do is keep your eyes glued to the screen, and the good folks at Anheuser-Busch and Frito-Lay will only be too happy to keep bankrolling your enjoyment.

NBA's Failures
Contrast that with the National Basketball Association (NBA), which operates on similar principles but just lost one-fifth of a season to a labor stoppage. Even with a new agreement in place, the NBA is poised to suffer even beyond the lost revenue from the games.

The reasons for the NBA's labor/management dispute were as old as commerce itself – the owners wanted to cut expenses while the players wanted to keep a good thing going. But, the aftermath of the lockout might be a permanent loss of much of the NBA's clientele. Fans were practically on their knees in late summer, begging the NFL to find labor peace. But public reaction to the NBA lockout was largely apathetic or antipathetic.

Why does the NFL succeed in a recession while the NBA is cratering? For starters, the NFL has positioned itself as an indispensable part of Americana. Games are easy to find, played every Sunday in giant stadiums and televised exclusively on over-the-air broadcast networks (or Monday nights on ESPN). Tickets are cheap enough to keep every stadium close to filled, which perpetuates a feeling of scarcity among fans. A sold-out crowd convinces the fans at home that they're watching something of import.

Contrast that with the NBA. It plays indoors, of course, which necessitates smaller venues. Basketball by its nature requires each team to play 5 times as many games as football teams do, and those on an irregular schedule, three to four times a week. Each NBA game is thus relatively unimportant compared to an NFL game. Plus, games are televised mostly on local TV and cable. Watching your favorite NFL team's every game (and plenty of others along the way) isn't hard to do. Watching your NBA team's every game, even during a truncated 66-game season, is exhausting. (For more on what TV does for sports, see Top 4 TV Sports Deals Of 2011.)

Premier League
The impact of restricting play to regular weekly games translates to other nations, too. Like the NFL, England's Premier League not only limits its product to one day every weekend, but sells television rights as a national package. If you think broadcasters are feeling any recessionary pinch, the BBC news reported that the broadcasting deal for 2010 to 2013 work out to about $141 million (£90 million) per team for three seasons. That's more than enough to compensate for a small dip in average attendance of about 3% from May to November 2011, according to ESPN Soccernet.

The Bottom Line
Sports fans are fickle, and tastes change. A couple of generations ago, horse racing was a major sport. Ten years ago, boxing was. Today, the popularity of both has decreased in this country. The NFL's genius has been building its brand as one of America's de facto national pastimes. Unfortunately for other leagues, there can only be one.

comments powered by Disqus
Trading Center