Is the Sports Business Recession-Proof?

With the country in the midst of the worst economic crisis since the Great Depression, most industries are struggling, most companies are cutting back and most people are losing money. But judging by the size of his new contract, it appears that Albert Haynesworth, the Washington Redskins and professional football are hardly feeling the effects of the nationwide downturn.

The Redskins have signed Haynesworth, an All-Pro defensive tackle, to a seven-year, $100 million contract that includes an NFL-record $41 million in guaranteed money.

The Redskins are not alone.

The New York Yankees recently dished out $430 million in contracts for three free-agent players -- all this at a time when the country is battling what President Obama called "an unprecedented crisis."

Banks too big to fail -- like Lehman Brothers -- have failed.

Newspapers that survived the Great Depression -- like the 150-year-old Rocky Mountain News -- have died.

But the professional sports world continues to churn out record-setting contracts.

"Are sports recession-proof? That is the question," said Christine Brennan, USA Today columnist and ABC News consultant. "I think the answer is no and we are seeing some evidence of that, but so far the answer seems to be yes and that is a real stunner."

'Appalling Contracts'

The Redskins' and the Yankees' big money moves have raised some eyebrows in a country that has recently grown accustomed to seeing more lay-offs and pay-cuts than nine-figure deals.

"It is stunning," Brennan said. "You could even say it's appalling."

Contracts like Haynesworth's seem even more stunning because they come as off-the-field layoffs permeate the pro sports world.

The Redskins laid off more than 20 employees earlier this year. The NFL recently announced it would cut about 169 jobs, about 15 percent of its staff. League commissioner Roger Goodell will also take a 20 -25 percent pay cut.

The NBA cut about 80 jobs last fall, 9 percent of its U.S. workforce. In February, the league said 12 teams had decided to borrow a total of $200 million from JP Morgan Chase and Bank of America.

Will Americans Hold on to Sports Tickets?

The amateur sports world is also ailing. The U.S. Olympic Committee announced this week that it will cut about 10-15 percent of its staff.

"The signs are all over the place and there's absolutely no question there's a major, major impact right now on the sports world," said Andrew Zimbalist, professor of economics at Smith College in Northampton, Mass.

The pro sports world depends on consumer spending, corporate sponsorships and media deals to survive, all of which are vulnerable in the current economic climate.

Consumer spending increased slightly in January but dropped in each of the past six months of last year. Even as people spend less, some analysts suspect that fans will continue to flock to the stadiums.

"When it all comes down to it, I'm wondering if the last thing to go for the sports fans of America will be their tickets?" Brennan said. "Is it going to be the case that Joe or Jane fan lose their homes, lose their jobs, find out they can't send their kids to college, but are still holding on with a firm grip to their season tickets? I don't know, but I think it's a real possibility that people are going to want to hang on to tickets and go to games as an escape.

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