NFL braces to take hit from economy

[SaintsFanatic]

from the TP

NFL braces to take hit from economy
In short term, fans can expect game to be same

The first clear and public sign of economic trouble for the NFL came in early December. With the league in the midst of another wildly popular season, Commissioner Roger Goodell sent a midweek memo to the NFL's staff, explaining that about 150 of the league's 1,100 jobs would be eliminated in the following 60 days.

The recession had officially hit America's favorite league, the one with gigantic broadcast contracts, its own "national holiday" and according to many reports, about $6.5 billion of revenue per year.

"We're like everyone else," Goodell said later that month. "We're not immune to what's going on. Our business partners are affected. Our fans are affected. I think it's something that we're keeping a close eye on."

The recession's impact is something the NFL is sure to monitor even more closely now, with the offseason -- in other words, season-ticket renewals -- right around the corner, a new administration in the White House and the economy showing no signs of improvement.

"The NFL is recession-resistant, not recession-proof," according to Marc Ganis, president of Chicago-based SportsCorp Ltd. and a sports consultant who has worked with the league.

As Ganis sees it, the biggest problem the league has right now is the same massive problem affecting other companies and individuals around the country: the banking industry. The credit markets have dried up, making it tougher even for companies like the NFL to borrow money, according to Ganis.

The league also has to worry about advertising, a large portion of which has traditionally come from the now-floundering auto industry. And the brewer Anheuser-Busch, which is as visible a sponsor as any, was purchased last year by InBev, a Belgian company that Ganis said is known for its cost-cutting measures.

On top of that, merchandise sales could take a hit as fans continue to struggle with their economic situations. When tickets for 2008 games were purchased, the NFL, for the most part, had not yet seen the recession's impact.

The good news, if any could come with the current crisis, is that the typical NFL fan will not really be able to see any noticeable difference in the league's product -- not yet, at least.

The league will cut staffers, and Ganis said the NFL is "reducing costs wherever it can," trimming travel expenses for meetings and events. The league also has reduced some postseason ticket prices, and individual organizations, such as the Washington Redskins and Cleveland Browns, have had layoffs.

But the game -- and its upcoming world-renowned, season-defining party, Super Bowl XLIII -- will remain the same.

"Like any business today, we are doing everything possible to operate more efficiently, but there has been no reduction in our marketing and promotional programs, and the Super Bowl will be as grand an event as it always is," NFL spokesman Greg Aiello said. "The NFL brings people together like nothing else. The Super Bowl will once again be an extraordinary day of national unity."

Aiello added: "We do not see the current economic challenges impacting the game on the field in 2009."

The biggest economic impact could come from a disaster that could rear its head in 2011 -- a possible lockout. The league's revenue is estimated at $6.5 billion per year, but about $4.5 billion goes to the players in salary and benefits, according to reports. The NFL's owners voted last May to opt out of the current collective bargaining agreement, which runs through the 2010 season, and the NFL Players Association is looking to replace its longtime leader, Gene Upshaw, who died before the 2008 season.

"They're going through the process of selecting the new leader of the NFLPA," Goodell said in late December, when asked by reporters about the state of negotiations on a new collective bargaining agreement. "We are doing our work internally to make sure we're prepared for the negotiation when they're ready. We'll start those negotiations whenever they're prepared. I'm presuming they probably won't start until the summer, at least."

During that same news conference, Goodell was asked how the economy would affect the league over the next year.

"It's hard to tell," he said as part of his answer, echoing the feelings that so many Americans must have. "The uncertainty is what you're really trying to deal with here."

It seems the NFL, like the rest of America, is unsure of what is to come.