Wednesday, October 1, 2008

GRIDLOCK!

by Ryan

We don't talk about things outside of sports very often, and that's because quite frankly, we're just not that smart. Any numbers larger than a batting average cause me to twitch uncontrollably, and Jon is allergic to newsprint so we have to text message him box scores, which yes, is as difficult as it sounds.

That being said, even we noticed something was amiss outside the Wide World of Sports, and not just that it is now owned by ESPN. What I'm trying to get at here is that the economy is in serious trouble, and if I understand the news reports correctly, we are all going to die. Seriously, we are f$%ked, and it makes me mad I spent good money on hockey tickets I won't get to use because we now barter exclusively using Barbie clothes and Hannah Montana trading cards. These are dark times indeed.

All joking about the apocalypse aside, these are some pretty dire times, and even the sports world will be effected. Stadiums don't build themselves, and I bet teams will have a hard time making a pitch to local governments to foot the bill these days. If those proposals get rejected, well, good luck getting the finances together in the private sector. (I have no real knowledge of this, but I assume getting a half billion dollar loan would be harder to do these days...)

Something you may not think about are the stadium naming rights for buildings like the Wachovia Center. I can name at least a half dozen buildings named after banks, and who knows what will be left standing when this all shakes out. We may come out of this with a completely new set of names for the places our teams play, and that may not seem like a big deal, but naming rights have become a major part of a team's operating funds. If corporations are less willing to put their name on a building it will have an impact on the entire industry.

Another issue we know quite well around these parts are luxury box sales. We've heard for years about how important they are to a team's overhead, and if companies in New York City are having second thoughts about taking the plunge, how brisk do you expect sales to be in smaller markets?

This is just an assumption, but with everything that has happened over the last few weeks I only wonder about that game on December 7th in Toronto. If this little experiment does what Ralph Wilson wants it to do, having an influence in the Greater Toronto Area is suddenly so much more important than we originally believed. There is very little spare change floating around across the country, and if you don't think Ralph smells all those loonies on the lake's North shore you are crazy.

The question left in my head is this: does an economic meltdown make a move out of Buffalo that much more imminent? And what does it do to the faint chances of getting a new stadium built to insure that move doesn't happen? I can't answer either of those, but I can't talk myself out of the thought that Wall Street imploding will hurt us all more than we think, and in ways we may have never imagined.

Just another brick in the wall.

4 comments:

  1. Here's hoping that that Cowboys new stadium remains a hole in the ground to counterbalance their current hole in the roof stadium.

    Interesting piece. On one hand I can see companies trimming the fat everywhere possible, but on the other a luxury box costing $250K, 300K, 450K and even 1 mil pales in comparison to the 700 billion bailout the govt is proposing.

    I assume that buying a luxury box is an investment like any other and maybe it's a good one right now? The teams highlighted in the article link probably aren't going anywhere.

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  2. That's an interesting point, and I agree that buying a box in a city like New York is a very good investment. However, taking those same principals and applying them in Buffalo is much harder. The Bills just opened a new M&T box at the Ralph, but how many more companies are going to make that kind of investment around here?

    What about at HSBC, where they seem to change box ownership daily. Casinos can only buy up so many boxes up there, at what point is it too expensive for some hockey games and the occasional U2 concert?

    Great points, though. I hadn't considered that in the long run it may be a good investment. If you see anything else about this come out, let us know. You seem as curious about this as I am...

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  3. By coincidence just after I reading your piece I happened to read Easterbrook's latest TMQ column:

    http://sports.espn.go.com/espn/page2/story?page=easterbrook/080930

    In regards to his "College Stadium Economics" paragraph he mentioned:

    "Though the IRS typically allows 50 percent deductions for business entertaining..."

    So maybe these boxes don't cost as much as we're led to believe?

    Regardless, I skimmed over the true nature of the post - Buffalo. You're right, who else around here has as big a presence as M&T? Rich, Delaware North, Milk Bone, Sorrento Cheese, Sahlen's hotdogs?

    I dunno. I don't mean to sound cute. Luxury boxes and the like don't seem to be going away (bad news for Buff). If anything they're gaining a stronghold.

    I loved the one Bill Simmons piece where he explained why he stopped caring about the Bruins and noted that the NHL priced its core supporters out of the market.

    Yet attendance remains pretty strong in all pro sports. I keep wondering what came first, the chicken or the egg? The regular fans or the luxury fans that everyone caters to these days?

    If the seats become too costly and the rowdy bunch stays home, there will be no atmosphere for the luxury fans to view from the comfort of their makeshift living rooms.

    What fun will that be?

    /end rant

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  4. Slightly outdated article but pretty in depth:

    http://www.sportsbusinessjournal.com/article/60077

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