CHICAGO (Reuters) - A couple of times a year, David Holzhammer drives more than 200 miles from his home in Iowa City, Iowa, to see the Chicago Cubs play baseball. That is a luxury he is not giving up, despite high gas prices and other strains on his wallet.
But he is cutting back on hot dogs and beer at the relatively expensive concession stands at Wrigley Field. “I try to spend less at the game,” said Holzhammer, 55. “I came up with three high-school boys and I had them eat outside the ballpark.”
Even in an economic downturn, fans still go to sports games, and some leagues are setting attendance records, but such statistics hide a more complicated story on the effect of a weakening U.S. economy on sports.
In a Reuters/Zogby survey on June 12 to 14, almost 15 percent of those polled said they are attending fewer sporting events this year, and most of those people cited the weak economy as the reason. About 28 percent are spending less on food and souvenirs.
“The reality is people are going to spend less and be more careful about choosing what they spend it on,” Rich Gotham, president of the National Basketball Association’s Boston Celtics, said in a telephone interview.
The results of the survey were borne out in numerous interviews at ballparks, arenas, golf courses and race tracks around the United States, where fans like Holzhammer said they were scaling back on what they spend.
Bob Carter, 66, has given up ticket packages for National Football League and Major League Baseball teams in Houston. “I’m retired. On a fixed income you can’t do a whole lot, but I had to cut back,” he said.
Carter was speaking on May 31 at a Houston Dynamo Major League Soccer game, where tickets on average are less expensive than the local football and baseball teams.
ON THE BRINK
Americans like Carter have every reason to be gloomy. Home prices extended their record slide in April, average prices at the gas pump top $4 a gallon, food prices are surging and former U.S. Federal Reserve Chairman Alan Greenspan has warned the U.S. economy is “on the brink” of recession.
John Thomas, a 32-year-old consultant from Los Angeles attending the recent U.S. Open golf event at Torrey Pines in San Diego, has also tightened his belt.
“With the gas prices, it eats into what I might spend on concessions because at that point then I might as well just eat at home, save my funds and drink in a bar after the game instead of enjoying $8 beers,” Thomas said.
Gas prices and other rising expenses are hitting consumers everywhere. Almost six of every 10 polled in the Reuters/Zogby survey are considering changing how often they drive, 39 percent mulling changes to where they vacation and 31 percent reconsidering how often they eat out.
A June survey of new-car buyers by Kelley Blue Book found similar results as 27 percent have stopped attending sporting events altogether, while another 25 percent said they attend them less often.
Nevertheless, most sports are seeing record attendance, even though some analysts say teams could be handing out more complimentary tickets to keep numbers up.
Baseball, for example, is on track for attendance topping 80 million and revenue of $6.08 billion, both records, despite “some modest decline” in merchandise sales, MLB President Bob DuPuy said.
And history shows consumers consider a night attending the big game just the tonic after a bad day at the office.
“The evidence from past recession is indeed that sports is one of the last things people cut back on,” said Andrew Zimbalist, a professor of economics at Smith College in Northampton, Massachusetts. “They need their distractions and they need their obsessions.”
This makes sports teams more recession-proof than many industries, according to the Celtics’ Gotham. “Sports are a great distraction from the economy,” he said.
THIS “PERKS ME UP”
Gerald O’Neal, a Garden City, Michigan, resident at a downtown rally on June 6 to celebrate a championship by the National Hockey League’s Detroit Red Wings, agreed.
“Things are pretty tough in Michigan right now, but this kind of perks me up, at least for a minute anyway,” said O’Neal, who was laid off in May after 13 years with Home Depot. Michigan’s economy has been hard hit by the struggles of the auto sector, particularly General Motors Corp and Ford Motor Co.
Smaller leagues, like the indoor Arena Football League, may do even better than the big ones. “The last time we went into a recession, I was surprised because it actually helped,” Arena Football League Commissioner David Baker said. “When people are staying closer to home, it kind of gives more emphasis to us as an option.”
Arena Football just closed its regular season with record attendance numbers, while revenue from ticket and merchandise sales were respectively running 11 percent and 6 percent higher than last year. The average Arena Football ticket costs $24, compared with $67 for the National Football League.
One area that is suffering is NASCAR, whose fans drive hundreds of miles to watch races. (For a story on NASCAR, click on)
DuPuy said that Major League Baseball is mindful of the state of the economy and the cost-cutting measures that fans have to take, noting inexpensive seats as low as $1 in some cases, all-you-can-eat deals and family packages.
For example, the San Francisco Giants are offering a $25 gas card through August when fans buy four game tickets online for $75.
“Baseball was there during the Depression, during World War II, as an element of the country’s recovery from 9/11, and will continue to be available at affordable prices,” DuPuy said.
But the plight of consumers has not stopped the major North American sports leagues from raising ticket and concession prices, as the cost to take a family of four to games in the NFL, baseball, NBA and National Hockey League has increased in the range of 2.6 percent to 5.7 percent, according to Team Marketing Report.
The Celtics, which just won the National Basketball Association title, have already raised their season ticket prices for next season an average of 10 to 15 percent.
For many U.S. sports leagues, the bigger worry as the economy slows may be a scramble for corporate dollars and TV rights fees.
“Until the corporations really start peeling back I don’t know that there’s going to be a real problem with the leagues showing any financial softness,” said David Carter, executive director of the USC Sports Business Institute.
“They’re servicing those folks like the dickens now because they know they can’t afford to lose them at a time when they might be scaling back their marketing, advertising and sponsorship pledges,” he added.
For many fans, sports are just too powerful a pull. Holzhammer, at the Cubs game with his 17-year-old son and his son’s friends, was pleased to see the Cubs beat the Atlanta Braves 3-2, despite having to cut back in other areas like meals in restaurants.
Peter Silva, 56, of Malden, Massachusetts, speaking before the Celtics’ final game in Boston, said he wanted his son see the team going for the title.
“That is an over-riding factor. The tickets cost a lot, but that’s what you have savings for, for special events.”
Reporting by Ben Klayman; Additional reporting by Mark Lamport-Stokes in Los Angeles, Steve Ginsburg in Boston, Matt Bigg in Atlanta, Michael Erman in Houston and David Bailey in Detroit; Editing by Eddie Evans
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