Sport Ticket Sales Dribbling
Teams scramble to boost revenue in slowing economy.
The Wall Street Journal reports Americans are shelling out fewer of their precious dollars to attend sporting events, despite creative sales ploys by franchises. As New Jersey Nets CEO Brett Yorkman put it, "We're not just competing for people's entertainment dollars anymore. We're going up against milk and orange juice."
Consumers are shunning extravagances -- including overpriced tickets to sporting events -- as they turn away from debt, credit and generally spending money they don't have. Which spells trouble for teams and cities alike, many of whom have recently sunk hundreds of millions of dollars into new stadiums and the infrastructure improvements required to support them. With tax revenues sinking and borrowing costs skyrocketing, municipalities may have trouble keeping up with their monthly payments.
During the previous decade of easy money, cities and counties issued debt -- often backed by bond insurers MBIA (MBI) and Ambac (ABK) -- to finance stadium projects. Glitzy new venues went up in place of old, crumbling ones steeped in history and tradition. Now, however, that credit has tightened up like a frightened sphincter, future plans are in jeopardy of being put on hold.
New York City, as usual, is on the leading edge of the storm.
Both the Mets and Yankees inked deals to build new stadiums just before the credit crunch began in earnest last year. The Mets even managed to corral a big-name sponsor to plaster the venue with its logo: Citi Field will open for business next season, and Citigroup (C) will shell out $20 million per year for the naming rights.
The Nets were a little late to the game, and may not be so lucky. Plans to build the Barclay's (BCS) Center arena in Brooklyn are in the works, but ground is yet to be broken. The British bank, recently the recipient of a generous cash injection from the U.K. government, has reiterated its commitment to supporting the project. However, legal setbacks and rising construction costs continue to imperil the arena's future.
Meanwhile, back in New Jersey, 2-for-1 season ticket offers, gas-card rebates and a recently launched buy-now-pay-later still haven't allowed the Nets to meet their goal of selling enough tickets to make up for lost renewals.
For now, fans appear inclined to stay at home, flip on the television and salivate over those court-side seats they once could afford.
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