Take Me Out To The Ball Game
Jesus M. Delgado, Advisor, and Samantha R. Webster CFP®
As if things weren’t strange enough, imagine a year without a World Series, a Superbowl, the NBA Finals… Although there are more severe issues going on in the world, sports are a pillar of our nation and are crucial to reestablishing normalcy. The reopening of sports involves a series of complex elements including economic and emotional factors.
For many, sports are like religion. Our teams give us a sense of belonging. The emotional component may be far more important to the well-being of many individuals given the current state of affairs. From little league up to the professional level, sports connect human beings in multiple ways. It brings together a community, a sense of loyalty to others, and camaraderie. Even if stadiums are empty but games are played, some sense of normalcy could be felt.
Even after the horrific struggles faced post 9/11, sports assisted in the recovery of our nation’s spirit. “It’s easy to say that sports are just games, but in the days and weeks after the tragedy of Sept. 11, sports offered a safe space for an entire population to come together, to grieve and to celebrate simultaneously.
After 9/11, the world changed. But sports stayed mostly the same. And that comfort and consistency were so crucial in a time of distress.” With the proper precautions and guidelines in place, not only could the local economies benefit from the reopening of sporting events, but the individual at home may benefit as well.
From an economic perspective, it’s no surprise that sports and the live entertainment industry as a whole are suffering. The financial trickle-down of sporting organizations are far-ranging and deeply integral to our local and national economy. Often, these organizations can fuel entire cities, cities that without the presence of these teams would face serious financial stress.
As with other businesses, sports organizations expect to make a profit. This may be unlikely when you consider the current state we are in. For example, Major League Baseball (MLB) stated that in 2019 39% of revenues were generated from the local gate and other in-park sources. Let’s not forget the MLB has already missed an entire half-season. Some revenue can still be generated if the season were to reopen but would it be enough to cover the team’s outflows? For reference, in 2019 the Los Angeles Dodgers had a payroll of $206 million on opening day. Also, over 20 teams have committed to continue paying operational staff through a period of time. How can an organization survive this way? The short answer is, they can’t.
The MLB commissioner’s office estimates an average loss of $640,000 per game over an 82-game season. As a solution, the MLB proposed the obvious, prorated salaries for players to subsidize losses. In addition, team owners voted in favor of a proposal to base player salaries on a 50-50 revenue split between owners and the players. Players and the Players Association did not take this well. Many feel the pay reductions are unjust given the circumstances. We hope a fair resolution can be found and we can go back to enjoying our sports virtually.
Until the day when we can enjoy our favorite pastimes once again, our team is here to provide you continued support as we weather these unprecedented times together.
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