Bubble bubble, toil and trouble (Business of hockey/sports article)

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http://www.winnipegfreepress.com/spo...365506561.html

Bubble bubble, toil and trouble
Rocketing franchise values, athlete salaries mix with crumbling TV numbers to stir up potentially toxic North American pro sports brew

he numbers are as absurd as the shaky premise underlying them:

• David Price, a pitcher with a 2-7 lifetime playoff record and a bloated 5.12 earned-run average in the MLB post-season, signs a $217-million (all currency US unless otherwise noted), seven-year contract with the Boston Red Sox.


• The St. Louis Rams announce they’re spending $2.66 billion on a new stadium in a Los Angeles suburb so they can move the NFL franchise back to a city where they failed once before.

• Anze Kopitar, a fine two-way player but a man who might not even be the best player on his NHL team, signs an eight-year, $80-million contract with the Los Angeles Kings.

The only way any of these recent deals make sense is if you believe the professional sports party of the past few decades will never come to an end: franchise valuations will continue to soar, player salaries will continue to skyrocket and fans will continue to pay ever-higher prices to make it all work.

Bit of a doom and gloom piece from my hometown. Thoughts?

[metroneck]

Current pro sports model is not sustainable.

IMHO, the incoming largest demographic will quickly tire of the escalating costs to consume, that are required to pay for the current model.

[Textcritic]

I have been convinced for some time now that professional sports is not viable in the long term.

It's a good article that largely confirms what I have assumed to be true.

[Hackey]

Clayton Kershaw made over 30 million last year. Baseball is just insanity.

[Erick Estrada]

It's going to come to a head in the next decade. Even the NFL has issues as there's lots of empty seats all over the league every Sunday. Rogers is getting what it deserves with their NHL contract but the bad sign for the league is that their next TV deals won't likely be nearly as sweet as overpaying for sports broadcasting rights is proving to be bad business for networks.

[calgaryblood]

Anze Kopitar might not be the best player on his team? He clearly is, and aside from Doughty being close, it isn't close.

[corporatejay]

Originally Posted by Erick Estrada

It's going to come to a head in the next decade. Even the NFL has issues as there's lots of empty seats all over the league every Sunday. Rogers is getting what it deserves with their NHL contract but the bad sign for the league is that their next TV deals won't likely be nearly as sweet as overpaying for sports broadcasting rights is proving to be bad business for networks.

Nfl doesn't care about empty seats. They are undeniably the hottest television property and it's not even close.

They could play in empty buildings and still turn a profit.

[Cecil Terwilliger]

Ha ha good thing I read the article. I previously had a post typed out about an article I have read a week or two ago about Disney stock prices dropping due to ESPN despite Star Wars huge opening.

[Erick Estrada]

Originally Posted by corporatejay

Nfl doesn't care about empty seats. They are undeniably the hottest television property and it's not even close.

They could play in empty buildings and still turn a profit.

If that was the case why are they the only sport with TV blackouts? Don't kid yourself, it matters.

[Locke]

Originally Posted by Textcritic

I have been convinced for some time now that professional sports is not viable in the long term.

It's a good article that largely confirms what I have assumed to be true.

Yeah, same. Its entering very similar territory to other economic quandaries and it isnt sustainable simply based on the fact that its predicated on unlimited and constant growth.

Salaries cant keep going up forever. Costs cant keep going up forever. Revenue cant keep going up forever. Eventually one of the factors that are propping the current system up are going to falter and then the whole thing is going to come crashing down.

[transplant99]

Originally Posted by Erick Estrada

If that was the case why are they the only sport with TV blackouts? Don't kid yourself, it matters.

Going the way of the dodo bird.

NFL clubs have approved suspension of local blackout policy for 2015 pre- and regular seasons. There were 0 BOs last reg-season.

http://www.nfl.com/news/story/0ap300...olicy-for-2015

[GirlySports]

i think baseball will survive out of the 4. They play so many games, big local tv contracts for 162 nights of live content and tickets are still relatively cheap compared to the other 3 sports.

[Flash Walken]

The NHL is on the only remaining gate-driven league in North America. Even the CFL isn't a gate driven league anymore.

TV Sports deals are the last gasp of cable providers. 'Cordcutters' aren't the major problem for sports and cable providers going forward, it's the 'nevercorded', kids who've grown up never having had a cable TV subscription, that will result in a sudden and substantial drop in customer base that will signal the end of these ultra-rich TV contracts and the massive player contracts and unprofitable franchises they support.

You'll still see huge money deals to marquee players, but you'll be talking about a league with 20 teams instead of 30.

[Itse]

The shrinking and struggling middle-class is I think a major problem for sports.

There's also the issue that consuming sports entertainment is largely a social thing for most people. If your friends stop watching games and going to games, you're much more likely to do it yourself even if you personally could afford it.

[Fire of the Phoenix]

Good. Can't say I'd feel bad if a bunch of rich people got knocked down by a couple dozen notches.

[Enoch Root]

Pro sports will get bigger, not smaller

[Textcritic]

Originally Posted by Enoch Root

Pro sports will get bigger, not smaller

How do you figure?

Based on what is put forward in this article, and judging from the current economic climate, it looks more likely that professional sports is approaching a critical mass.

[Erick Estrada]

It's probably peaked. The NFL will always persevere because North Americans can't get enough football but IMO leagues like the NHL could be in for tough times especially if the CDN dollar and economy is in the dumps for as long as it's being predicted by some.

[Enoch Root]

Originally Posted by Textcritic

How do you figure?

Based on what is put forward in this article, and judging from the current economic climate, it looks more likely that professional sports is approaching a critical mass.

A lifetime of watching sports - and so many other things - continue to grow, despite fears like this.

The article is an opinion piece. History is on my side. The economy is irrelevant (in the sense that it always ebbs and flows, and it'll recover again).

This is the same, except on a smaller scale, as when people predict the economy is going to collapse, with the 'this time it's different' mantra. No it's not.

The bottom line, and I think that's why this sort of viewpoint is so common, is that it is far easier to see what's wrong. It's easy to see the warts, the cracks in the wall.

It is much harder to see, and imagine, growth and change and new ideas.

Yet they always emerge.

[Locke]

Originally Posted by Enoch Root

A lifetime of watching sports - and so many other things - continue to grow, despite fears like this.

The article is an opinion piece. History is on my side. The economy is irrelevant (in the sense that it always ebbs and flows, and it'll recover again).

This is the same, except on a smaller scale, as when people predict the economy is going to collapse, with the 'this time it's different' mantra. No it's not.

The bottom line, and I think that's why this sort of viewpoint is so common, is that it is far easier to see what's wrong. It's easy to see the warts, the cracks in the wall.

It is much harder to see, and imagine, growth and change and new ideas.

Yet they always emerge.

Theres a lot of hope and faith in this post.

That solutions to problems 'have always emerged' is not the same as 'they always will emerge.'

Different solutions are viable at different stages of the lifecycle.

I'm not saying that you're wrong but people are expressing concern that its reached critical mass, is past its peak and is now becoming unsustainable, this hasnt ever happened before.

There might be a solution, heck, there probably is: contraction and deflation. But that also means that the industry itself will have to change and adapt.