Recession Eliminating, Reducing The Usual Sponsors
American sports telecasts have traditionally been sponsored by breweries, retailers, and automakers. The current recession, (yes, we ARE in a recession) has left many of these entities scrambling for survival, leaving the remainder with severely reduced advertising budgets.
Budweiser, the King of Beers, which was recently acquired by the Belgian beer conglomerate inBev, seems to have not missed a beat. They continue to be everywhere.
Coors and the others seem to be OK, too, but that is likely to change soon.
What happens next baseball season? Will Bud and Coors allocate the same amounts for sponsorships? They can't possibly. Neither can Pepsi, which just announced massive layoffs in their bottling division.
American automakers, who buy excessive amounts of ad time during sports programming, are teetering on collapse. President Bush and a contingent of other politicians have no intention of bailing them out. If they collapse, so does everything that they touch, from the livelihoods of millions to many downstream affections, such as sports sponsorship.
Yes, there will be foreign car companies to fill the void, but will they be willing to pay the current prices? Probably not.
In addition, traditions such as The Buick Open, The Merrill Lynch Shootout, and anything sponsored by Lehman Brothers, American Express, DHL, and countless others will either have to be renamed or simply discontinued.
Stadium naming rights will most likely be changing more often as well. Ford Field could be a goner, as could any other venues carrying the name of a troubled corporation.
The Mets' new stadium, Citi Field, was named after the banking giant last year when they signed a 20-year, $400 million naming rights deal.
As we have seen, banks are still not out of the woods financially, so what happens if Citi rescinds on the Mets? It's possible.
The Mets are counting on that revenue. The stability of the underlying entity going forward may be the difference in the Mets signing, or passing on certain free agents.
The Yankees cannot sell their remaining luxury suites at the new stadium. The suites located near the foul poles are still for sale. At $400k a pop, it doesn't appear to be a bargain. Who can afford to pay it anyway?
The bottom line is that advertising budgets are usually the first to go in a recession. The sports world and the sports media have been relying perhaps a little too heavily on that revenue to operate. With the pool drying up, one wonders where the state of sports sponsorship is headed, and if we are destined for a pay-per-view sports culture.