Sports Business

Report Outline
Growing Commercialism in Pro Sports
Factors in Expansion of Pro Sports
Likelihood of Increased Team Expenses
Special Focus

Growing Commercialism in Pro Sports

Concern About Professional Sports as Big Business

Professional team sports is a multi-billion dollar business. In recent years, spectators have spent well over $500 million annually for tickets to pro football, baseball, basketball and hockey games. Television has chipped in several hundred million more, team franchises are being sold for as much as $20 million and professional superstars are signing contracts for over $200,000 a year. Yet despite the apparent lucrativeness of the professional sports industry, discontent among owners, players, fans and the general public is growing.

Owners typically complain that they are fortunate to break even. Ticket sales and television revenues have not kept pace with the inflationary costs of players' and office employees' salaries, travel, food and equipment. There is just not enough money, they argue, to support the great number of major pro teams: now 28 in the National Football League (NFL), 12 in the new World Football League (WFL), 12 in baseball's National League and 12 in the American League, 18 in the National Basketball Association (NBA) and 10 in the American Basketball Association (ABA), 20 in the National Hockey League (NHL) and 12 in the World Hockey League (WHL), 15 in the North American Soccer League, 16 in the new World Team Tennis (WTT) League, and now both indoor and outdoor teams in the growing International Track Association (ITA).

“The days of big profits seem to be ending,” an article in U.S. News & World Report commented three years ago. “In one sport after another it is becoming harder for owners to make a profit. About half of all pro teams—even some winners—are losing money. Reasons: Costs are soaring even faster than incomes. Salaries of athletes are skyrocketing.…Other expenses—for travel, equipment, stadiums—also keep going up. Inflation, in other words, has hit sports as it has other businesses.”