Blog Entry

Sports and the Economy

Posted on: February 27, 2009 3:30 pm


This has been a tough winter for professional sports. It was a tough free agent market in MLB where many teams just refused to spend how they have in the past. The Yankees went crazy, but very few teams spent what they used to, and many free agents had to settle for less. The same story is happening in the NFL where many of the top free agents are getting their money, but many of the lesser ones will have to settle for less. The NBA announced they will borrow $175 million to loan to struggling teams. The AFL cancelled their 2009 season. The list goes on.

But when you consider the struggling US and world economies, sports are an excellent source of discressionary consumption spending on two fronts. First of all, think about it. What is the constant gripe about professional athletes? They get paid too much money and spend it on stupid stuff like bling and fancy clothes. Why didn't the first stimulus payment thing Bush passed in 2008 work? Instead of wasting their rebate checks, people paid bills and saved the money. Pro athletes are swimming in money at a very young age, so they waste it. What better people to put money in the hands of if you want to stimulate the economy? Is it fair or ethical? Shouldn't this money be helping poor people? Probably, but if you consider all the jobs these athletes save and businesses they suppport through all the stuff they buy and do, the effect is great.

Further, think about sports and the average consumer. Think about how much money sports fans waste spend on sports. Think about ticket sales, merchandise, cable and satellite tv packages, consessions, travel, and large electronics. Without sports, presumably people would find other things to waste their money on, but probably not to the same extent as they do with sports. Considering the enduring emotional attachment people have to their favorite teams and cities, there is no way people would spend just as much if they got really into some other hobby.

This is all without mention of ad revenue, tv contract revenue, and endorsement deals that all provide revenue and spending power in the lucrative sports industry.

From all of this, it seems clear to me that sports are an essential piece of our economy. I haven't bothered to look up any numbers or statistics on this, but I think my logic holds. Certainly in a tough economy like this, some people aren't as willing to shell out the money for season tickets or flying down to Arizona to see spring training, but I believe the pull back on sports spending will be far less severe than the pull back in other areas. Further, this past quarter, Comcast showed larger than usual increases in cable subscriptions. This shows that potentially many people will choose not to renew their season tickets, but instead will buy a NFL Sunday Ticket type package to compensate. I feel like for the economy to recover, sports have to survive and lead the way.
Category: General

Since: Jul 22, 2010
Posted on: December 9, 2010 11:28 pm

Sports and the Economy

A tough year for professional sports, this is so stupid.  I read this thing 5 times just to make sure I got some of it right.  To compare stimulus money, to pro athletes wasting there money, is the dumbest thing I have ever heard.  It is nobodys business how anyone spends there money.  The biggest asset sports have are for the bars, hotels, and other businesses that survive because of them.  If a pro athelete buys a $2 million gold plated heart shape piece of dog sh-t, it's none of your concern.  He has the right to waste his money in the same way as a doctor, lawyer, politician, or any government does every single day.  Is some of it a waste, sure it is.  You have no right to get on your "high horse" and criticize the way anyone spends there money.  If you want to lay it all on the table, tell us how much of your own money you have pumped into helping others.  I'm sure you spent hours writing this crap, next time put a little more time into the subject at hand.

Since: Oct 12, 2010
Posted on: December 9, 2010 10:15 pm

Sports and the Economy

The NFL is a tax exempt organization.  They do not help the economy at all....they in fact hurt it by not paying taxes on their loans for owning teams while also getting lower interest rates from the fed, creating and building stadiums, and multiple other transactions that could provide a much needed tax revenue to the US.  The NFL is another example of the rich helping the rich get richer.

Since: Dec 7, 2010
Posted on: December 7, 2010 10:31 pm

Sports and the Economy

<!-- [if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View>
<w:Zoom>0</w:Zoom> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false<
/w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false&l
t;/w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>
xt> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> </w:Compatibility> <w:BrowserLevel>MicrosoftInte
; </w:WordDocument> </xml><![endif]--><!-- [if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" LatentStyleCount="156"> </w:LatentStyles> </xml><![endif]--><!-- [if gte mso 10]> <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} </style> <![endif]-->

      What I learned from this research project is that the sports economy has a significant impact on society. One major topic and impact on the economy is the building of new stadiums. Almost half of the research I had done was based on sports stadiums and how it affects society. Even though sports stadiums take a lot of money out of the government, it goes right back into the government with the profit it makes from people buying tickets and merchandise to watch their favorite teams. And not only did I learn about money going back into the government, but also the business world. I learned that even in stocks, sports takes a big part of that too.

The research that I had done was on the economy of sports and how it affects society. Well for this topic I researched most of the time on databases online. It was kind of hard researching this topic, but most of the time I would get articles on sports stadiums. So that’s when I began to research sports stadiums a little more and look up how it affected the economy of people. But I tried not to focus just strictly on stadiums because if that was the case I would have made that my research topic. So I tried too research other things such as buying sports merchandise and also business in sports. Which I think these aspects helped with my research and gave it a variety on how sports economy affects the society in different ways.

I think that the sports economy is probably one of the most profitable economies in the world. With all the money that is spent everyday on merchandise, tickets, sports magazines, sports video games, sports stadiums, and etc there is no doubt in my mind that money is profited. I feel that also people spend a lot of money unnecessarily on pointless things in sports. Me as a sports fan I love to support my team and buy some of their merchandise, but as far as buying season tickets and buying everything possible to support your team I feel that’s too much. Spending all that money on a team that probably won’t even give back to you besides maybe winning games and championships is not worth it. I think to help our economy as a whole we should spend our money more wisely and not spend too much on the teams we love so much.

I think that people should watch their money more wisely and spend it on more important things rather than just sports. Even though for many people such as myself, sports has a major impact on us in and out of our days. But as people I feel we need to put a boundary between our economic lives and sports. Because easily that line could be broken. In stead of people spending money on jerseys and tickets, people should be spending money on household things and family. Sports needs to be put third behind family and our economy. And if we can’t do that than we will always put ourselves in a hole economically.

Since: Oct 14, 2006
Posted on: March 1, 2009 1:25 pm

Sports and the Economy


There's an important distinction between a healthy economy and a healthy individual budget. Ever hear of the lost decade in Japan? For 10+ years, the Japanese savings rate was incredibly high. Due to fears from past investment bubbles, people continued to save nearly all of their money in savings accounts earning less than 1% return, actually losing money when factoring in inflation. Now, these people certainly were in a strong financial position to be able to buy something if they wanted it or retire at a young age, but there was no economic growth this entire period. The economy stood still. The question is, do I want to do what's right for me or what's right for the economy as a whole and by extension me. There's no definitive answer.

Since: Oct 14, 2006
Posted on: March 1, 2009 1:14 pm

Sports and the Economy

Look at it this way. If you are a diehard fan of your team. You buy season tickets. Go to most of their home games every year, paying to drive or ride to the games, eat and drink at the games. You own a few jerseys, caps etc. You live and die with the success of your team. Now your budget gets tight. How likely are you to give it all up so you can pay down your credit card debt or do something else a bit more responsible with it? You may cut back in one area but compensate in another. So maybe instead of the full baseball season tickets, you opt for the 20 game package and then make sure you can watch every game on DirectTV in HD. You save some money, but not all of it.

Further, consider the guy who invests as much time, energy, effort into another hobby. He is a competative cyclist or extremely passionate model train collector. I don't know. What happens in those circumstances when money gets tight? You stop the gym membership or stop going to far away races or stop buying those trains. Instead of just cutting back your spending, you nearly totally eliminate it. This is the power of sports, and it comes from the cathartic ownership fans have for their teams.

So if you were to say that the spending on player saleries, stadiums, and coaches are wasteful, you would be wrong. They seem excessive perhaps, but they are the catalyst. This money spent is the investment necessary for getting fans to become this emotionally and financially invested.  Season ticket sales (and all the spending that comes with it) rise dramatically whenever a team signs a great free agent, hires a new coach, or builds a new stadium. It encourages enthusiasm. 

Not only does this money spent encourage fans to spend, the money is placed in the hands of people who consistantly waste it. How many times have we seen or heard of pro athletes, stars in their day, who made a ton of money, but now are broke and need to take TV jobs, open car dealerships, do paid appearances, and try just about anything just to make ends meet? It happens, but how many big time athletes do you hear of who live modestly, save for their future, and are content not to keep up with their peers? The magnitude of their wasteful spending is far greater than that of the average American, and that's why it is good that the money is in their hands. The fact that they waste money keeps businesses open, keeps jobs filled, and generates income for millions of "average" citizens.

Since: Mar 1, 2009
Posted on: March 1, 2009 12:59 pm

Sports and the Economy

*Why did the economy burst





Since: Mar 1, 2009
Posted on: March 1, 2009 12:58 pm

Sports and the Economy

Get real fellas. What did the economy burst this last year? Answer: People spending/borrowing more money than they could afford. Do you think those big flat screens were bought with money from a savings account or with money borrowed on a credit card? Simple spending does not help the economy. People moving back to living within their means by not overspending is what will strenghten the economy.

Since: Dec 22, 2008
Posted on: March 1, 2009 12:20 pm

Sports and the Economy

I find it hard to believe this. The spending may help stimuate the economy, but wouldn't taking all of the money sports players plus the money for stadiums, coaches etc. and using that money to help the economy do a much better job? Also, while sports fan's do spend a lot on sports keep in mind that they also pay money to go to the games. You could take this money and use it also.

Since: Feb 3, 2007
Posted on: February 28, 2009 11:16 pm

Sports and the Economy

I agree with this.  In the early 90's when the Bulls were good-all the taverns, sports bars, etc were always packed as was the same with the Bears when they have good seasons.  Granted this is just in Chiacago, but I am sure other markets feel the same way.

The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or