How will the recession affect the Clippers and the NBA?

by MichaelCage on Aug 13, 2009 10:34 PM PDT Comment 6 comments

There seems to be a chill in the free agency market this off season. Unlike most years, we've seen very few inflated long term contracts being awarded and alot of good solid veterans signed for much less money than what they would have earned a few years ago. Part of this might be due to the big free agency class of next season, where many GM still harbor fantasies of adding Lebron and D-Wade to their franchise. A bigger factor might be due to the reduced salary cap, which is a concession by the NBA that the recession has impacted league wide revenues.

No sports franchise or league can be completely independent of their macroeconomic environment of course. As unemployment edges up ever higher and households rein in their spending and reduce their debt burden, how will this affect attendance at games this season, and consequently, how will it affect the team's payroll in the future? Though we might technically see an uptick in our GDP this quarter, consumer spending might be weak for years. And spending upwards of $5k for season tickets each year is an indulgence that is easily cut.

Many of us renewed our season tickets last year before the fall of Lehman Brothers and before the extent of the collapse of housing values became known. Our record had alot to do with the sparse attendance last season, but we also have to remember that alot of those tickets were already sold to season ticket holders who were trying to unload them for pennies on the dollar during the year. This season promises to be alot better in terms of quality. But we are also staring into a very deep recession and a nagging sense that it would be wiser to put that extra $5k into CDs or TIPs rather than spending money as if we're immune from the recession.

The Clippers, as we know, are doing their best to maintain ticket prices for this season, which is a bit mind boggling as other teams with better records have slashed prices in order to maintain their fan base. I haven't renewed our tickets this season yet, and of course, I've been innundated with calls, special package deals, and incentives for renewal. I've talked with other season ticket holders who are also on the fence these past few weeks to compare notes on what Clippers rep are offering and it's very telling:

The reps are aggressively trying to get existing season ticket holders to buy additional tickets. They're offering to sell a second or third seat for half price. They've offered free parking passes plus two free tickets for every game (in the 300 section) for an extra $500 per seat (if you buy two seats in the 100 level). And prime seats in the first three rows of many sections are still available. What it adds up to is that ticket sales this year is shaping up to be disastrous for our Clips. They're hoping that they can sell more tickets or give away free tickets in the 300 section to existing season ticket holders and let them try to off load those seats to their friends and neighbors. I suppose this shouldn't be surprising with retail numbers still dismal across all sectors, with even stalwarts like WalMart reporting very weak sales figures.

Many of us here are hard core basketball junkies, of course. And there used to be consensus that during economic crisis and hard times, entertainment and sporting events tend to do well. But that was when going to a Yankees game cost you 25 cents. It seems that we are now light years away from those days, as a beer will now cost you $11 at the Staples Center. I'm curious if the recession will affect anyone's ability or willingness to attend Clippers games this year? Is anyone reining in their discretionary spending at all? Or are we still splurging on $100 scotch and laughing at the recession?

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As a non STH

the recession won’t affect me that much. I never plan on going to clippers games more then 5 or 6 times a year and when I do I have saved money up to splurge on that game. I think the clippers will be fine, for all the bad there in DTS he is very shrewd economically and is still making money. In fact seeing as DTS likes to take advantage of down markets he might spend money now while he can and others can’t. Many other teams will be hurt but I expect the clippers to weather the recession undamaged, it is not like they can lose too many more seats and getting the #1 picked didn’t hurt them either.

In Gordon we trust

by bestclipfan on Aug 13, 2009 11:40 PM PDT reply actions 0 recs

the clippers will probably be better off than most teams.

the clips were one of 3 teams that had no debt… debt payments and interested when you have no cash flow are killers. even the lakers have debt….

by hans007 on Aug 14, 2009 12:52 AM PDT reply actions 0 recs

i’d also add that the clips have one of the cheapest arena lease deals in the league.. and are in a major market.

the grizzlies ARE profitable. if the griz are profitable the clips sure as hell can be in a city with probably 15-20 times the number of potential fans.

by hans007 on Aug 14, 2009 12:54 AM PDT up reply actions 0 recs

Everybody Loves A Winner

I think there’s a dichotomy between season ticket holders and fans who buy tickets but don’t have season seats. Many loyal season ticket holders who would like to keep their tickets just can’t because of business reversals or loss of a job. I think the Angels have a program in place to help fans who have had season seats for years hold their locations, even if they can’t afford them temporarily because of the economic circumstances. I don’t know the details, but I think it involves buying smaller packages of games in return for retaining the rights to reinstate your season ticket priority and location later. This might be something that would work for the Clippers as well. Even STHers who can still afford their seats had to think twice about renewing with the Clippers after last year’s debacle. I know I did. It got to the point last year where I looked forward to another trip to Staples Center to see the Clips like a trip to the dentist for a root canal. It’s one thing to piss away money, its another thing to have someone twisting your nuts while you do it. The Clippers caught a major break with the ping pong balls that brought them Blake Griffin. Without him, I think season ticket renewals would have been a complete disaster. With him, ever optimistic Clippers fans seemed to sigh and say, “Okay, one more chance.” It seemed to me at seat upgrade day that there were basically about the same number as available season seats as the year before, indicating not too bad of an erosion.

As for non-STHers, all the Clippers have to do is, in the words of Al Davis, “Just Win Baby!” The Dodgers are drawing very well despite the recession because they are winning and have an exciting team. If the Clippers do the same, fans will find the bucks to come out to a few games and join the party. If they don’t then as MichaelCage notes it won’t be hard to find something better to spend their money on.

In case anyone from the Clippers management is peeking, one caveat. It’s a fine line between aggressive marketing and sticking your loyal STHers in the back. I don’t care how great the Clippers are this year, if I find out I payed full price for my 2 season tickets and the guy next to me got his second seat for half price, I’m going to be out of there. Ditto if I find out that people who bought single game tickets around me payed less because of some kind of internet special then I did, despite the fact that I’m suppose to be getting a deal because I bought the whole season. The Clippers need to maintain some kind of pricing floor to give their product value and protect their season ticket holders, even if it means eating empty seats. It’s not smart to take away the economic incentive to buy season tickets. It’s down right foolish to put in place an economic dis-incentive to purchase them..

by Clipster Hipster on Aug 14, 2009 12:07 PM PDT reply actions 0 recs

One other thing

I did notice on the Cippers Seating and Pricing Map that while the Clippers did not raise the price I pay ($50) per ticket as a STH on my seats, they did lower the face value of the tickets in my section from $85 to $75. Perhaps while trying to keep the season ticket holders at the same price as last year, they have lowered box office prices to try to help bring in more casual fans. Not sure if this was only done for my section or if face value of other sections were lowered as well.

by Clipster Hipster on Aug 14, 2009 12:13 PM PDT reply actions 0 recs