How Pro Sports Is Affected By Our Economy

For large commercially successful professional sports franchises, the current downturn in the economy is a minor inconvenience in terms of a detriment to revenue flow. Pro sports is affected by our economy in the mid-size to small market teams, who have tight budgets
and smaller payrolls than the New York Yankees and the Dallas Cowboys of the sports World. Small market teams struggle to remain profitable in good financial climates, and the current sluggish economy restrains their ability to remain competitive both on the field and in the entertainment marketplace.A reactionary result of higher player salaries in todays market is the increase in the final cost a spectator spends to attend a given sporting event. The higher a team salary becomes for players, the higher the fan costs for concessions, parking, ticket prices and souvenirs. This cost is even escalated away from the ballpark, when consumers purchase officially licensed team apparel at a retail store. Pro sports are affected by our economy in that the sports consumer is often unable to afford the increase in prices, and instead turns to other entertainment venues that provide more value for money spent.
Pro sports is affected most by our economy in their inability in tough times to place a quality and competitive product on the field. The simple economic fact is that a baseball club with a budgeted team salary of $60 annually cannot attempt to sign a free agent player who is seeking a $20 million dollar a year contract. The player in question eventually signs with another team, often in the same division, ensuring a losing season for the team with less financial resources. The players who are young and on their way to stardom leave their original team at the first opportunity for a larger salary, and the original team loses not only a quality player, but the monies they have expended on player development as well. This is a vicious cycle for the team, and a gut wrenching disappointment for loyal sports fans.
As a generally depressed overall economy results in less fan attendance, there is less need for the employment of support staff for professional sports teams. Concession vendors, stadium security, ticket takers, ushers, and parking attendants are laid-off in relationship to the decline in fan support. In addition to the lay-offs, professional sports team incur higher unemployment compensation premiums, which further reduce the teams profit margins
. Unemployed workers find other employment, and when the economy rebounds the teams must absorb the cost of training new employees.