Summary:To fans, sports is a Saturday afternoon in Fenway Park watching the Red Sox pound the Yankees. It′s sitting at home with friends watching the Lakers in the NBA playoffs. It′s not about player salaries, TV rights or which teams are losing money.
But to those involved in the business of sports, the economic problems they face are very real indeed — so real, in fact, that a distinguished group of owners, television executives and an agent agreed that major changes are under way in the industry.
"Sports is in for some real rough times," said Don Ohlmeyer, former executive producer of one of television′s most successful shows — "Monday Night Football" on ABC. "The whole landscape is changing."
The problem, panelists said, is that television networks — one of the prime sources of revenue for major league sports — are no longer willing to pay huge sums of money for the rights to air games. It′s a losing proposition, they said.
"Networks are coming to the understanding that they don′t need to be in the sports business," Ohlmeyer said. "You don′t need sports to be profitable."
Don′t start shedding tears just yet. Sports continue to be a big business. The sports economy is estimated to be nearly $200 billion a year. Attendance is up in most sports. Big events like the Super Bowl continue to draw large audiences. And the number of channels dedicated to sports programming continues to climb.
But the fees demanded by some leagues for TV rights also continue to soar resulting in losses for the networks. That′s why the NBA will have most of its games on cable next year. And why fewer and fewer games will be broadcast by networks in coming years.
"There′s going to be a reevaluation of sports in the marketplace," said James Dolan, head of Madison Square Garden, owner of such teams as the NBA′s New York Knicks.
But the sport in deepest trouble, most agreed, is baseball. Most of the teams are losing money, and there doesn′t appear to be any easy way out. The lack of parity means that most teams enter the season knowing they don′t have a chance to win.
"Unless we correct the problem, we′re going to be in trouble," said Peter Magowan, President of the San Francisco Giants, one of baseball′s few profitable teams. "It′s an unworkable situation."
Agent Leigh Steinberg, who represents some of the biggest names in sports, took a conciliatory approach, saying it′s in the interests of all parties — players and owners — to figure out how to make it work.
"Management and players need to be in a partnership together looking for all revenue sources to bring into the sport," he said.
The new paradigm, some of the panelists argued, is the growth of new sports and new leagues that appeal to a younger audience and have a strong bottom line — not bloated player payrolls and huge TV rights fees. Exhibit No. 1 might be the Los Angeles Avengers of the Arena Football League, which one panelist said would make more money this year than the California Angels. The league appeals to young people at a price they can afford, said Casey Wasserman, the Avengers′ owner.
"The most popular athlete for young people is Tony Hawke," the skateboarder, "not Barry Bonds," he said.
Some sports will continue to thrive, like the NFL and NBA, while new ones, like extreme sports, will find new audiences.
But for those who watch sports on TV, changes are coming — more sports on cable and more costs to those who want to watch them.
Said Ohlmeyer: "The whole landscape is changing."
