Answer here may be an enthusiastic yes
Boston teams to be OK in shaky economy?
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The lottery winners roamed Fenway Park earlier this month, all smiles and $30 souvenir goodie bags. From the 40,000 fans who registered online to attend "Christmas at Fenway" weekend festivities and buy single-game Red Sox tickets at the ballpark, the team randomly selected 1,500. Not-so-lucky fans clamored for tickets from home as phone lines backed up and virtual waiting rooms filled.
Early returns show ticket sales for next season trending up. "Christmas at Fenway" sales increased 4 percent over last year. The team anticipates season-ticket renewals will be strong, and considering the tough economic times, it was no wonder Sox executives beamed like lottery winners, too.
"We are in uncharted territory," said president and CEO Larry Lucchino. "What impact the economic downturn will have is to be determined. We're certainly not immune or impervious."
The recession already has hit professional sports, its fans, and sponsors hard. Rising unemployment numbers now include job losses at league headquarters. Earlier this month, the National Football League announced plans to cut 150 employees. The National Basketball Association in October eliminated 80 jobs. Six NBA coaches have lost their jobs this season - the most before Christmas in league history. The firings, in some cases, speak to a growing sense of urgency to win games and fill seats. Major League Baseball laid off 20 members of its Internet division earlier this month.
NASCAR teams and professional golf tournaments are struggling to secure sponsors. The Arena Football League recently canceled the 2009 season. With auto, finance, and real estate companies major players in sports sponsorship and advertising, the cause for growing concern and cutbacks is obvious. The party line from leagues and teams, as expressed by NBA deputy commissioner Adam Silver, is that they are "focused on delivering real value to our fans."
Leaving a Q & A session with fans at Fenway, Lucchino said the team will benefit from Red Sox Nation's enthusiasm early on, "but it's a question of its shelf life." The recent success of the Red Sox, Celtics, Patriots, and Bruins - six championship parades in seven years - coupled with loyal fans and rich tradition places Boston in a better position than most markets to handle the worsening economy. Additionally, sports consultant Marc Ganis said, "As a group, Boston teams are arguably the best managed and owned franchises in a very long time."
So far, all four teams report that revenue indicators are either up or holding steady. Off to the best start in franchise history, the reigning NBA champion Celtics wonder if the recession could eat into their season-ticket waiting list. Other teams in other markets worry about selling tickets game to game.
"Sports is the lifeblood and the pride of Boston," said Celtics co-owner and CEO Wyc Grousbeck via e-mail. "Fans will come to the games and invest time and passion into a team if the team rewards them with entertainment, excellence, and a chance to be part of history."
Added Lucchino, "You have to look at both sides of the equation. How is our sports constituency prepared to grapple with [the recession]? And how much will they be expected to grapple with? Either way, we're in a better position than teams with less fanatical fan bases."
The Celtics and Bruins will have a better idea about the economy's impact in late winter when the sponsorship and luxury suite renewal process goes into full swing. TD Banknorth Garden president John Wentzell recognizes the home of those two teams "is not insulated" from the pullback in traditional advertising and marketing dollars in many places. Gillette Stadium in Foxborough recently laid off 5 percent of its staff because of a drop in special event bookings.
The lack of a title sponsor left Concord's Nashawtuc Country Club off the Champions Tour 2009 schedule. The
Canton-based Dunkin' Donuts has no plans to reduce any of its sports sponsorships, which include all of Boston's pro sports teams, according to sports marketing director Tom Manchester. "We've tried to use sports as a platform," he said. "We support activities our customers are passionate about."
However, Wentzell and Manchester see companies changing strategies. Maybe that will mean more television and less in-arena advertising. Maybe luxury suites will be booked for half the available games.
"Looking ahead, we absolutely are sensing there's going to be some shifts taking place," Wentzell said. "Sponsors may be taking a very hard look at how they activate their relationship. Clients are seeking flexibility and, in turn, we need to deliver that. We talk a lot with other teams and other venues and the teams doing well here helps mitigate what has been the effect up till now. We haven't felt it as bad as others, but we are somewhat concerned."
From his vantage point as Principal, Delaware North Companies and Bruins executive vice president, Charlie Jacobs sees revenue returns from six NHL arenas, including Tampa Bay, Nashville, Edmonton, Columbus, and Buffalo.
"[Per capita spending] might be off in other markets a bit, but not significantly," Jacobs said. "The customer who attends a game in Tampa or Edmonton might opt for a less expensive item like a hat instead of a jersey . . . I feel good about our chances here because it's less expensive to come to a Bruins game."
MLB executives have asked every club to look at variable revenue sources - tickets, sponsorships, concessions - and apply certain percentage reductions to those categories and run through different scenarios to see what affect the reductions would have on operating revenues.
"Now, we're watching the early returns as closely as we generally watch attendance during the season," said MLB president and COO Bob DuPuy. "We're paying more attention, so we can react accordingly. We recognize that there are a lot of competing interests for discretionary dollars and a lot of pressures on our fans."
Baseball executives and sports consultants see the $161 million, seven-year contract the New York Yankees gave to CC Sabathia - the largest ever for a pitcher - as an aberration.
There is tremendous financial risk to owners when they offer long-term, guaranteed contracts. Ganis expects that risk allocation to change in the next few years.
"The Yankees are the Russian judge," Ganis said. "You've got to throw them out of any analysis. Athletes' salaries have been like real estate in South Florida. The prices kept going up. But it turns out they're actually worth a lot less than what people were paying for them."
Owners hope fans still see value in watching those players.
"In difficult economic times, sports can be that much more of an escape than in normal times," said Patriots president Jonathan Kraft. "In some respects, sports become more important to the community."
Shira Springer can be reached at springer@globe.com.
