IMG World Congress Of Sports: Execs Examine Headlines Of The Day

(l to r) Mourning, Leiweke And France Discuss Current Issues Facing Sports Industry

Sports are no longer recession proof, and the time has come to buckle down and manage the business. That was the message on the opening panel at the IMG World Congress of Sports, presented by SportsBusiness Journal/Daily. The panel included NHL Commissioner Gary Bettman, NASCAR Chair & CEO Brian France, AEG President & CEO Tim Leiweke, Alonzo Mourning Charities Founder Alonzo Mourning, Under Armour Chair & CEO Kevin Plank and IMG Sports & Entertainment President George Pyne.

FEELING THE CRUNCH: As the sports business has become more sophisticated and reliant on ever-escalating sponsorship revenue, suite sales and premium tickets, its exposure to fluctuations in the wider economy has increased and the industry will suffer as a result, panelists said. "We've never seen anything like this and I pray that we never see anything like this again," said Leiweke. He later added, "I don't think we've seen the (full) impact yet in sports. I think these next 12 months is when we'll see the impact because so many of our buys and so much of our business came earlier." Bettman said, "It goes back to the fact that the nature of our business has changed. The business model was different (when people said sports were recession proof). It was all ticket sales. The impact on club seats, suites, advertising and sponsorship, that's where sports will feel it the most."

Plank Expects To See Some  Consolidation Of Companies

WEATHERING THE STORM: The economic downturn means that teams, leagues and sports companies will be tested more than ever during the next 12 months, especially as marketing budgets are reduced in key sponsorship categories like auto, beer, banks and credit cards. The companies that thrive during the recession will be those with solid balance sheets that have cut costs efficiently and managed their business effectively. "You're going to have some consolidation," said Plank. "You're going to have some people that go away, and the ones that do survive are doing it better, different and more innovatively than anybody out there." "You've got to have a little bit of optimism, too," said France. "You have to realize that culturally sports offers things to our corporate sponsors, and certainly to our fan base, that nothing else can offer."

CUT BACK MOVE: As sports look to cut costs, front offices won't be the only place where they scale back. Player salaries also could be reduced, and players in the NFL and NBA, both of which face collective-bargaining negotiations, will be the first to be tested. Mourning said that the NBA will be able to leverage the state of the economy in its upcoming labor negotiations to reduce player costs. "It needs to happen simply because we need to fill the stands," Mourning said. "To do that, we need to cut ticket costs so that sports are more attractive to the fan." Pyne advised companies to be aggressive in developing their businesses and recommended that those with strong balance sheets look for opportunities in the depressed market. "I don't think you¹re going to find success hiding behind your desk every day," he said.