Tuesday, February 17, 2009


All sports business eyes turn to Florida, Arizona and Detroit
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February 17, 12:21 PM
by Evan Weiner, Business of Sports Examiner
Today is the day President Barack Obama signs the stimulus bill into law with the hope that pouring billions of dollars into numerous projects nationally will create jobs and get Americans spending again.
In sports, owners have not yet felt the effects of the economic downturn because tickets for National Football League, National Basketball Association and National Hockey League contests were sold prior to the September-October meltdown and the leagues were locked into long term over-the-air and cable/satellite TV contracts along with marketing partnerships which were signed months before the economic crisis started.
But the calendar has caught up to sports, particularly Major League Baseball. Tickets need to be sold, marketing deals need to be signed and commercials need to be in place to pay for bills. Within the next two weeks, Major League Baseball teams will find out just how difficult the economy is as games will be played in two of the states hit hardest by home foreclosures, Florida and Arizona. If attendance is below normal in the Grapefruit and Cactus leagues, that might be a sign that some franchises may be in for some difficult times, including the Arizona Diamondbacks, the Florida Marlins and the Tampa Bay Rays.
The franchise that seems to be in for the toughest season economically is the Detroit Tigers. No reorganization plans that General Motors and Chrysler submit to the White House and Congress today so they can accept government loans will help the Tigers in the near term.
The Big 3 automakers have laid off tens of thousands of workers, both blue- and white-collar workers, and the home foreclosure rate in the Detroit area is skyrocketing. A good portion of the Detroit consumer base comes from Windsor, Ontario, and other parts of Canada. The fall of the Canadian dollar has made going to baseball, hockey, football and basketball games along with college sports in the Detroit and Auburn Hills area much more expensive as Canadians are paying $1.26 Canadian per every U.S. dollar to cross the river and head into Michigan.
Even if U.S. and Canadian government loans help the Michigan-Ontario auto industry, the business will be forever changed in Michigan/Ontario and that will impact the Tigers as well as the NBA Pistons and the NHL Red Wings beginning this spring - and the NFL’s Lions and college sports next fall.
The stimulus package is designed to pump money into states, cities, towns, villages and municipalities for infrastructure development and repairs. Things like energy projects, road reconstruction which would create jobs. There also could be stadium/arena construction although that would seem to be on the low priority end behind building and repairing bridges and retrofitting buildings to make them more energy efficient. In New York, New Jersey Nets owner Bruce Ratner, a political operative under New York City Mayors John V. Lindsay and Ed Koch in the 1970s, is turning to former New York Senator Al D'Amato's lobbying firm to help him get stimulus money in an attempt to get the stalled Atlantic Yards-Brooklyn Arena project moving.
Getting federal money for stadiums and arenas is nothing new. In the 1930s, the President Franklin Roosevelt's depression-era recovery plan included stadium and arena building under the umbrella of the Work Projects Administration (WPA), the Civilian Conservation Corps (CCC) and the Public Works Administration (PWA) agencies. Among those projects included the Aud and the War Memorial Stadium in Buffalo, Nippert Stadium in Cincinnati and other venues used in major league, minor league and college sports.
President Obama's signature on the stimulus bill could help sports owners in a variety of ways but it may take a while before the economy shows signs of recovering. In Florida, Arizona and Michigan, sports owners can only help that the economy comes back a lot sooner than hoped.
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