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News » Economic reality deals sports jarring hit 2008-12-21


Economic reality deals sports jarring hit 2008-12-21


Economic reality deals sports jarring hit 2008-12-21
If sports are the ultimate reality show, then reality has finally caught up to sports.

An industry that one sports economist said had a "license to print money" is now grappling with a global financial meltdown that has turned the whimsical world of wins and playoffs into a sobering business of losses and layoffs.

There is a new scoreboard to monitor these days, and it has nothing to do with runs, hits and errors.

"I don't think it's panic time, but it's time for sports teams and leagues to start paying attention," says Raymond Sauer, an economist at Clemson University. "I think they are on alert. We know it's not going to be a good year ... there's a lot of bad news still to come."

Across the landscape of sports, leagues and tours are bleeding red, some perhaps fatally wounded. The 2009 Arena Football League season was canceled in mid-December amid losses reported up to $3 million a year.

"This could be the end," quarterback Joe Germaine of the Arizona Rattlers told the Arizona Republic.

"Gentlemen, Stop Your Engines," screamed a headline on the Sports Nut Web site. In the accompanying column, the writer recommended "euthanizing" NASCAR, which has been hit head-on by the crippled automobile industry.

Cutbacks haven't been restricted to the United States. Formula One's reigning world championship team recently slashed costs 30 percent, Honda withdrew from the circuit and the World Rally Championship lost a third of its teams within 24 hours when Japanese automaker Subaru followed Suzuki out of competition.

"They're all hunkering down," says Sauer. "The existing models are really threatened because nobody is selling cars."

Tiger Woods isn't even recession-proof. General Motors, looking for a government bailout, bailed out on its No. 1 pitchman a year before his endorsement contract expired and also cut sponsorship ties with two NASCAR tracks and the Masters. The company also announced it would not buy Super Bowl commercials this year.

Stateside, the three major sports — the NFL, Major League Baseball and the NBA — have all taken Shaquille O'Neal-sized economic hits. "No one," says NBA commissioner David Stern, "is in a good position."

Wrote NFL commissioner Roger Goodell in a memo to staff: "The foreseeable future will not be 'business as usual.'"

Call it The Big Cutback.

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Author:Fox Sports
Author's Website:http://www.foxsports.com
Added: December 21, 2008

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