This has been a tough winter for professional sports. It was a tough free agent market in MLB where many teams just refused to spend how they have in the past. The Yankees went crazy, but very few teams spent what they used to, and many free agents had to settle for less. The same story is happening in the NFL where many of the top free agents are getting their money, but many of the lesser ones will have to settle for less. The NBA announced they will borrow $175 million to loan to struggling teams. The AFL cancelled their 2009 season. The list goes on.
But when you consider the struggling US and world economies, sports are an excellent source of discressionary consumption spending on two fronts. First of all, think about it. What is the constant gripe about professional athletes? They get paid too much money and spend it on stupid stuff like bling and fancy clothes. Why didn't the first stimulus payment thing Bush passed in 2008 work? Instead of wasting their rebate checks, people paid bills and saved the money. Pro athletes are swimming in money at a very young age, so they waste it. What better people to put money in the hands of if you want to stimulate the economy? Is it fair or ethical? Shouldn't this money be helping poor people? Probably, but if you consider all the jobs these athletes save and businesses they suppport through all the stuff they buy and do, the effect is great.
Further, think about sports and the average consumer. Think about how much money sports fans waste spend on sports. Think about ticket sales, merchandise, cable and satellite tv packages, consessions, travel, and large electronics. Without sports, presumably people would find other things to waste their money on, but probably not to the same extent as they do with sports. Considering the enduring emotional attachment people have to their favorite teams and cities, there is no way people would spend just as much if they got really into some other hobby.
This is all without mention of ad revenue, tv contract revenue, and endorsement deals that all provide revenue and spending power in the lucrative sports industry.
From all of this, it seems clear to me that sports are an essential piece of our economy. I haven't bothered to look up any numbers or statistics on this, but I think my logic holds. Certainly in a tough economy like this, some people aren't as willing to shell out the money for season tickets or flying down to Arizona to see spring training, but I believe the pull back on sports spending will be far less severe than the pull back in other areas. Further, this past quarter, Comcast showed larger than usual increases in cable subscriptions. This shows that potentially many people will choose not to renew their season tickets, but instead will buy a NFL Sunday Ticket type package to compensate. I feel like for the economy to recover, sports have to survive and lead the way.