Wouldn't an impending near-depression be calamitous for teams like the Yankees and the Mets who are moving into new stadiums and are counting on massive ticket prices to fund both their new ballparks and their enormous budgets?

How would this affect the Red Sox and ticket prices vs. players' salaries?

Could some franchises actually fold in the process?

The Yankees did pretty well during the last depression. I hope we don't have to spend the next 80 years listening to the phrase "The House that Teixeira built."

I would say it is a stretch a team would collapse. I imagine there would be plenty of suitors were that to become a threat. However, it would come down to the nature of an ownership group's leverage for the team entity as well as their willingness and ability to deleverage by injecting additional hard capital should it become necessary. I honestly believe it is a highly unlikely scenario though, both the collapse of a team and the long term collapse of the credit markets. Too much is riding on it on an international macro-economic scale much less on an MLB micro scale.

Isn't ticket revenue only a small slice of the pie for MLB teams these days? I think they NY teams will weather the storm, with all of their advertising revenue streams.

The teams I see having the most trouble in this economy are the small market teams in places that are having their asses kicked from the housing / credit crisis. Florida, San Diego, Tampa Bay, and Oakland (aren't they moving to a stadium in the middle of nowhere in a couple of years? That could get rough...)

Tough to imagine anybody getting a new ballpark financed anytime soon. Oakland, as Razor notes above, could be a mess. The Twins, I'm guessing, got in under the wire.

And the Rays and Marlins aren't getting new stadia any time soon.

It's almost two years now since A's owner Wolff "announced" plans to build Cisco Field in Oakland, and they've gotten nowhere. He's been adamant that it's Fremont or somewhere else, not Oakland long term. Pretty clear that the Giants have won the battle for the Bay though. Tim Lincecum is the franchise. The A's have nobody like him. Fremont is not really in the middle of nowhere, about halfway between Oakland and San Jose. They'd be better off in San Jose (Sharks doing well) but couldn't get anywhere on a stadium there. Will there be an A's team ten years from now? I don't know.

The pro forma revenues at the time of financing of the stadium showed more than 4.5 times coverage of debt service, and were based on annual attendance of 3.4 million - they've been over 4 million for a few years now (if memory serves). It could pressure the team's salaries if the current environment persists, but I don't think the stadium is in any trouble.

This was just touched on in the article "Money Changes Everything" in the latest issue of SI. In it the author, David Epstein, goes on to detail how sports have traditionally been recession proof until things get really bad. Historically sports have held "a high place among our discretionary spending priorities for corporations and individuals".

Nonetheless, league offices are cutting staff and prices for yearling horses have, apparently, fallen 10.2%. But fear not, the TV contracts of the major sports largely protect them from recessions. NFL has a $3.7 billion deal w/ CBS et al. that runs to 2010 and MLB has a deal until 2013 w/ Fox TBS and ESPN worth $300 million.

http://vault.sportsillustrated.cnn.com/vau...46180/index.htm

Ticket revenue is still a big slice of the gate. Things have changed but the dearly departed Doug Pappas estimated it at about 55% of revenue about 5 years ago. TV networks have changed the game, but there's no way the Yankees would be unaffected by playing in an empty park. Even for them I bet it's still in the 40s somewhere. Otherwise there'd be no reason to build a new park with all the fixins (I'm including luxury boxes in ticket revenue).

It will be very interesting to see how the '09 season plays out considering the economy. I can't imagine attendance figures increasing or even holding steady. I also think that regardless of what the attendance may be, the average person attending a game will spend much less to do so. Many will be making less expensive seating choices (if/when possible) and spending much less in and around the ball park. More people will bring their own food into the park (where permitted) and might think twice about how many $6-$7 dollar beers they consume. $25 T-shirt purchases may replace $150 jersey purchases. Lets face it, food, beverage and souvenir concessions and their inflated prices will take a huge hit. Granted, this will have no affect on some folks but many others who have watched their weekly grocery costs double in the past year will take a more realistic look at that $4 hot dog knowing that they can buy an entire package of dogs and rolls for near the same. They'll more carefully weigh the $6-$7 beer against the six pack that they can buy for near the same price. The $3.50 bottle of water might seem a bit out of line when they can buy an entire case for $6. These are all things that we were well aware of before, but said , "Oh what the hell." as we considered it part of the experience. I'm guessing that many folks will now balk at that part of the the experience if they find that they can still afford the cost of getting to and going into the park. Tough times ahead and I haven't mentioned any of the other monetary concerns that the average fan will face that have nothing to do with going to the park. That EXTRA money, that DISPOSABLE income that many folks used to finance the ballpark experience is not going to be there. I can't imagine it not having a ripple effect throughout the game.

In the NY metro area a less severe, but still painful, economic downturn could still have an impact. Yankee/Mets fans will have to pay those "massive" ticket prices to watch baseball while simultaneously being banged for large PSLs and skyrocketing ticket prices in their new football stadium.

I thnk there's a very good chance the NY metro area will suffer a more severe downturn that many other parts of the country.

Along these lines, we have to consider the media marketplace now versus the 30's. The upcoming digital TV transition will force people to start considering a flat-panel HDTV. Cable/satellite penetration is at an all-time high (80+ % of the market). Internet penetration growth is slowing, but broadband penetration is also growing (FiOS, U-Verse, etc.).

With the big media deals that none of the leagues will back out of, all of this conspires to do one thing: make people stay at home and watch better coverage for cheaper. Or go and watch at a bar. My guess is, with greater media integration with sports, ticket prices are more vulnerable to recessions than ever. Therefore, as more people consume sports away from arenas/ballparks, the value of a ticket falls below price.

To JimD's point... Living in NYC, I believe the MFY will have a bigger problem with this than the Amazins. The Yanks are a team that markets to a higher-income (and less committed) crowd and markets itself to the entire region from CT to NJ. It essentially takes more disposable income to get TO the ballpark. Moreover, a large percentage are not true fans, but simply on display - you have no idea how many times I saw the Wall Street @#$-holes finally showing up at 8 pm to the game, and act like they own the whole park. They, incidentally, are suddenly wondering if they still have jobs. Live by the sword (rich Wall Street folks), die by the sword (rich Wall Street folks).

Meanwhile, the Mets are a "hometown" team. The ticket prices are more cost-controlled, and the crowd is more baseball fans, and fewer corporate types. They built a stronger connection to the Queens/Brooklyn communities, and their fans already had less disposable income. In the end, these people are less likely to lose their jobs (overall), and have a stronger link to the team. I see the Mets as more recession-resistant than the MFYs.

EDIT: Toning down inflammatory language.

Not to rain on your class warfare parade, but I thought your post lacks a little substance. Maybe you could quantify a few things for me:

-At what income level does one go from blue-collared, true, fan to higher-income, late arriving, fair weather fan? Are you considering base income only, or base, bonus and benefits? A dollar figure would be nice... it would help me assess my own fan-hood.

-Is this a clear line of demarcation, or is it more of a gradual conversion from true fan to fair weather fan? If it is an income band, please define it.

-Are these income determinant labels absolute, or do you allow exceptions - and what are these exceptions?

Not intending class-warfare. Simply talking about my observations at both stadiums. Not at all scientific, and likely to lack substance. Simply my observations of the types of fans who attend the games. Put differently, when a client comes to town and is offered corporate seats to a particular game, my observation is that the great majority of tickets are to Yanks games. I'll see if I can compile more stats, but I'm ONLY talking about my HIGHLY unscientific observations.

From Fortune.com:

Will Wall Street's woes hit the Yankees?
http://money.cnn.com/2008/10/14/magazines/...sion=2008101414

San Jose is officially Giants country under its territory rules according to MLB. There is no way the A's could move there without permission from the Giants who count on the peninsula and South Bay for a large part of their fan base. Fremont is as close the A's can get without triggering a territory dispute.

Oh yeah, I vaguely remember something like that. With the Giants park now in downtown SF instead of 10 miles down the peninsula, it makes less sense. What's done is done though, I guess.

I agree that the only thing baseball would have to worry about is stadium financing (public and private). Building stadiums are incredibly capital intensive and generally require significant debt. With credit markets in shambles those financing deals would certainly be affected. There is virtually no risk to teams' solvency, although on the margins we might see a slight dip in attendance next year. Sports are fairly recession proof. Plus, this isn't going to be a depression.