While the sports industry hasn’t been hurt to the extent financing has, we are starting to see the ripples from the increasingly poor economy. According to a recent article in the Wall Street Journal, the NBA had to lay off around 80 employees. That’s 9% of its work force! A Sports Illustrated piece said that the Charlotte Bobcats laid off 35 employees from the front office.
The league and most teams have their sponsorships, television contracts, and other big deals already in place before the financial crisis became the headline of the fall. As a result, the league won’t really feel the impact of the poor economy unless it turns into a recession that would affect signing future long-term contracts.
The biggest problem currently facing NBA teams is convincing people to come attend games between the gas, ticket, parking, and concession prices. While some NBA teams haven’t felt the effects of the poor economy (ie. NBA champions, the Boston Celtics), many are having to creatively push ticket packages by reducing ticket prices and offering incentives and discounts to certain groups like college students or the military.
The league has created an internal site for its teams to encourage the sharing of promotional ideas.
To save the 30 teams from having to reinvent the sales or financials wheel in a challenging economy, the NBA has an internal Web site dedicated to team marketing and business opportunities. It serves as a clearinghouse for ideas and strategies; if a promotion works in Philadelphia, it might just work in Sacramento, too. Silver said teams have been encouraged to step up some community activities, through their NBA Cares program. “We want to demonstrate that we share some of the pain people are feeling right now,” Silver said.
It’s amazing how some affordable or even free community relations events can really help the team perception in the community. If fans feel more connected to the players and believe that they are more accessible, they tend to be more likely to open their wallet and pay for tickets. By sharing event ideas, teams can wait until it’s been proven to work before implementing it thus reducing risk and potentially saving the team money, which is key in this tight economy.