According to the New York Times, the National Football League (NFL) will reduce its staff by about 150 employees after the Super Bowl. The NFL has a total of 1,100 employees at its New York headquarters, at NFL Films in New Jersey and at the Los Angeles offices of the NFL Network and NFL.com. The NFL is estimated to bring in revenues of US$6.5 billion.
We now know that entertainment options like gambling are not recession-proof. Now, it appears that professional sports is falling to the same fate. The NFL is feeling the pinch of sagging licensed merchandising sales, sponsorship renewals and new-media deals. All of this while salaries are rising (players will receive about $4.5 billion in salary and benefits in 2008). St. Louis, we don’t know if the declining attendance at NFL games is just due to sucky football (Rams are 2-11) or the economy.
According to the NYT, “There was a time that if the NFL said, ‘I would like a window shades company as a sponsor,’ they would have a slew of prospects trying to throw money at them to be the official window shades company of the N.F.L.,” sports consultant Marc Ganis said. “Sponsors are being much more discriminating with the use of their dollars now. Advertising money is going to decrease, if for no other reason than the auto industry has shrunk. The N.F.L. relies on auto, finance and real estate — it is a mess. Yet your costs aren’t going down. You signed contracts for their increases.”
I read this with a chuckle remembering a great panel at GIGSE 2004 when SportingBet founder and then CEO, Mark Blandford, sat with Derrick Crawford of the NFL. Mark creatively offered Derrick US$5M for SportingBet to be the official oddsmaker of the NFL. Before the panel was over, Mark had upped the ante to US$10M.
Mark was trying to be instructional to the NFL explaining that sports betting and the sports were inextricably tied together in many other parts of the world. In fact some of those creative sports leagues around the globe are now considering offering a “right to bet” to gambling operators which will make the relationship even that much more entrenched.
In 2004, the NFL’s Crawford responded that the league received sponsorships exceeding US$1B a piece from the likes of Pepsi and Reebok among many others.That put things in perspective for the crowd.
When asked what the response would be if a gaming operator could match that figure, Crawford responded, “"I am sure that would force our owners to consider it," Crawford said, "but I just don't think the league is ready for that step right now."
Given the fact that the NFL has been the truest of true believers in pushing for an internet gambling prohibition bill over the past decade, we don’t expect that this response will change. But, given the economic downturn, who knows……