It seems as though every spectrum of the U.S. economy is in some type of disarray. High oil and commodity prices, low consumer confidence, bank failures coupled with government bailouts, slowdowns in the automotive industry, and an increase in health care costs. Need I say more!
One industry seems to be insulated from these market forces. Where other industries are affected by the current economic climate, the SPORTS INDUSTRY continues to grow day-by-day.
Pro athletes continue receiving record contracts as rookies and veterans (A-Rod, Alex Rodriguez of the New York Yankees, latest baseball contract was worth more than what JP Morgan paid for Bear Sterns, one of the most prestigious Wall Street investment banks). Professional sports team values have increased in value for the past 4 years (Source: Forbes magazine). Last year, the lowest valued NFL team (Minnesota Vikings: $782 million) was worth more than the top NBA team (New York Knicks: $608 million).
And to all cable and satellite subscribers, ESPN, the 24-hour sports channel, is the most expensive cable channel. More than Fox, CNN, Lifetime, MSNBC, HBO, etc….. Cable companies pay a per-subscriber rate monthly to ESPN (ESPN is owned by Disney) to broadcast the channel to its subscribers. The cable and satellite all balked at ESPN’s annual rate increases, but usually conceive at the end of the day.
ESPN Rates:
2000- $1.20/month/subscriber
2001- $1.80/month/subscriber
2004- $2.60/month/subscriber
The Dallas Cowboys, also known as America’s team, is a model company when exploring the Economics of the Sports Industry.
A new $1 billion dollar stadium is due to be complete by opening day of the the 2009 season. Jerry Jones, owner of the Cowboys, is seeking close to $1 billion dollars for the stadium naming rights. AT&T is said to be the front-runner.
Even more impressive than those numbers are the the luxury suite sales numbers. Jeff Mosier of the Dallas Morning News reported that the Cowboys have already sold all 200 suites which ranged in price from $200,000 to $500,000 per year.
This Cowboys had to subsequently build an additional 100 suites to meet the unexpected demand. An exceptional story, but one in the world of sports that is not rare to report.
Either everyone has misinterpreted the state of the current economic climate, or we just place a such a high value on sports than on anything else.
Sports Guys, keep up the good work!!!!!!!!!!!!!!!!!!!!!!!
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