Tuesday, September 8, 2009
Even NFL feels pinch of weak economy
By Len Pasquarelli ESPN.com
Jerry Jones has not been able to find a naming sponsor for the Cowboys' new billion-dollar stadium.
Not all that long ago, "marketing" an NFL franchise was an uncomplicated formula: Create the schedule, generate some media buzz around it, throw open the gates, sell out the stadium, kick off as close as possible to the appointed time and then count the receipts.
Despite its preeminent status, the NFL has learned a difficult lesson from the current lagging economy: The league simply isn't recession-proof. While most fans still wait avidly for Sunday afternoons and Monday evenings, the average patron has to think twice about investing his dwindling disposable income in a football game.
AFC South blog
ESPN.com's Paul Kuharsky writes about all things AFC South in his division blog.
It used to be taken for granted. Now it means taking away from something else to be able to afford an NFL ticket, and that something else might be more essential. It's hard for a person to worry about the line of scrimmage when he is fretting that his job on the assembly line could be gone tomorrow.
"I can't tell anybody it's more important to come see a football game than to go to work and try to make ends meet," Jacksonville Jaguars defensive end Reggie Hayward recently told the Florida Times-Union.
For the past few weeks, the national news has optimistically suggested that the economy is getting incrementally better. But that improvement has yet to trickle down to the NFL.
Earlier this offseason, commissioner Roger Goodell took a salary cut. There have been layoffs at the league and team levels. Several clubs have frozen ticket prices at the 2008 rates. Others, such as Jacksonville, are offering partial season-ticket plans. Many teams are struggling to sell luxury boxes and club seats.
Houston Texans owner Bob McNair said this summer that a season-ticket waiting list that once numbered 25,000 has been completely exhausted. About 17,000 season-ticket patrons in Jacksonville did not reup for the 2009 season. Several franchises are facing hometown blackouts just one season after all but nine of 256 regular-season games were aired in their local markets. Dallas Cowboys owner Jerry Jones, once critical of the Cincinnati Bengals' Mike Brown for not selling the naming rights to Paul Brown Stadium, can't scare up a company to put its handle on his new billion-dollar football Taj Mahal. Advertisers who for years supported the NFL are rethinking their strategies and positions.
It once was a touchstone for companies to attach themselves to the NFL and its nonpareil brand name. But those companies are revisiting the viability of those decisions.
All of this comes amid concerns that there will not be a negotiated extension to the collective bargaining agreement, 2010 will be played as an uncapped season and owners will lock out players in 2011.
Those elements and a few others have combined to force the NFL, while still financially healthy, to market its product with greater gusto. The league that once sold itself now is finding that it is a much tougher sell.
In the ongoing tug of war for disposable income, the NFL must market itself harder than at any other point in the modern era. It's not enough to assume that every team will play in front of a full house or that its games will be piped into local households.
This is hardly a scientific study but one that is pretty reflective of the current situation: Twenty years ago, for the 1989 season, only half of the league's 28 clubs employed marketing directors, according to the NFL Record & Fact Book. For the 1999 campaign, using the same book as a reference source, all but one of the NFL's 31 franchises listed either a vice president of marketing, a senior vice president of marketing, a marketing executive, a director of marketing or a chief marketing officer.
For the 2009 season, the number surprisingly has dropped a bit, 28 of 32, but the implications are the same.
To the ticket-buying public, no matter how loyal or dyed-in-the-wool or familial, it's not enough anymore to simply stage the games. The matchups themselves used to be the primary hook that attracted sellout crowds. Now the NFL talks increasingly about the "Sunday experience." Go to a game, and you're apt to see a rock concert break out.
More than a game, the NFL has become entertainment, and that means it must compete intensely against an afternoon of golf, a day at the beach, attending a movie, perusing the stores at the mall, an hour at the gym, sipping coffee and reading the Sunday newspaper, and any number of other diversions.
A friend in the business once noted that newspapers are in such dire trouble because their owners are accustomed to making a ton of money and haven't yet figured out how to live on only a half-ton. That's not necessarily true of NFL owners, for whom none of us will be staging a telethon or passing the hat at halftime, but it's pertinent.
Even in good times, professional sports have never been particularly profitable business ventures. The profit margins traditionally are small, and a down economy shrinks the size of the bottom line even more.
According to The Washington Post, at least four franchises face the prospect of significant local blackouts this season. Since 2005, the NFL has broadcast 95 percent or more of its games to hometown markets. That could be a difficult threshold to reach in 2009.
The relative problems the NFL has encountered this year validate the reality that a rocky economy doesn't play any favorites.
Jaguars owner Wayne Weaver, who last month suggested that all eight of the team's home games might be blacked out locally, recently noted: "You know, it's a tough economy and we get it. This economy has just affected too many families."
Clearly, it's had some effect on the league as well.
Len Pasquarelli, a recipient of the Pro Football Hall of Fame's McCann Award for distinguished reporting, is a senior writer for ESPN.com.