Tuesday October 07, 2008

The Great Depression?

The Great Depression?
Since I have no money, I have not been obsessed with the economy and the doom and gloom. I do understand even us poor folks are losers in all of this. I did not contribute to the trillions of dollars lost in the stock market over the past week but I do understand how the economy will affect me and my family in the long-term.

I spent a couple of hours yesterday watching and listening to CNN, Fox Business News and Fox News. I also listened to several financial talk shows throughout the day. While I have no idea what some of the concepts are about, I do take a common sense approach to our current issues and what it means to the future.

How severe is this fallout? Is a depression in our future? When will it end and what will be salvaged?

I don’t have the answers and doubt anyone really knows. But I turned my attention to areas where my interest will effected and one of my main concerns is sports.

Among other items, I want to know how the economy will affect local, regional and national sports at the high school, college and professional sports levels?

How will Clemson be affected?

I think there are several concerns from Clemson’s standpoint including:

Tuition
Clemson University is one of the most expensive schools in the country. One economist claimed on Glenn Beck’s television show that students across the country will not be able to secure student loans in the next 12 to 24 to 48 months. I am not sure what the demand will be in the next few years at Clemson. This is an area that will have a direct impact on athletics at Clemson.

Enrollment
Later this month the Clemson board of trustees will be presented a plan to drop the percentage of in-state students and increase the number of out-of-state students. The university makes more money on out-of-state tuition and could create more revenue by accepting a higher percentage of out-of-state students. The current guidelines are 65% in-state and 35% out-of-state but the board is scheduled to hear a proposal to move towards 60% in-state and 40% out-of-state. I think this has long-term and short term effects on athletics.

IPTAY
The discretionary dollar will be stretched tighter. If the economy is headed down drastically and if it is long-term then I think IPTAY could prepare for major setbacks. Hopefully I am wrong. But I don’t think it is an unreasonable concern at this point.

Tickets
Tickets cost more and people have less to spend. I can see attendance being an issue especially if you consider the entire cost of attending. Gas prices, food prices, IPTAY, parking and tickets and the escalating cost may make it difficult for some families.

The West Zone
Clemson sold the original rights to the West Zone Club tickets for five years. Those tickets will be up for new terms in the next two years. How much can Clemson charge for these premium seats in a terrible economy?

Coaches’ Contracts
Oklahoma’s Bob Stoops make $6.5 million a year. Southern Cal’s Pete Carroll earns $4.4 million per season. Notre Dame pays Charlie Weiss $4.2 million per year. Assistant coaches salaries are also rising at astronomical rates. Can schools continue to see the escalation of coaching salaries?

Fires and Hires
Can schools afford to buyout contracts and then pay the next guy even more? I can remember too many times where the new guy makes less than the old coach.

Olympic Sports
I can see attendance at Olympic sports increasing if some cases because the cost is so much less. However, I can also see less interest because of the competition for the discretionary dollar.

Capital Campaigns and Facility Improvements
Phase II of the West End Zone should be complete soon but Clemson is currently trying to raise money for the baseball facility. Thank goodness they have made significant progress there and are set to make some announcements soon about major gifts in baseball. This area could be affected in the future by slowing down ideas of future campaigns and improvements.

Television
The ACC’s next television deal may be affected by the economy. Advertising rates not be as high as once thought because the advertising dollar may be drying up. One of the keys will be the length of the recession. Another will be the number of viewers. Advertisers may be even more scared of putting dollars in this league in a bad economy especially if the product is down. However, maybe ratings will be up because people can’t afford to go to games and more might be forced to stay at home and watch on TV.

Corporate Dollars
As the economy worsens the sponsorship dollars dwindle away. Clemson depends on the corporate dollar for tickets, the West Zone Club, luxury boxes, game program advertising, radio and television broadcasts, etc. if that dollar slips away Clemson may have a hard time making up the difference.

Car Dealers
I was told that one of the major concerns of the economy is the automotive industry. One report has as many as one in four car dealerships not surviving the upcoming year. This is an important factor because of the university’s dependence on dealer’s courtesy cars.

Summary
In the end, there are probably more questions than answers on this subject at this time. I do think that a poor economy only increases the importance of winning. If Clemson is going to be competing with the same competition for a smaller pool of money then it will be forced to differentiate itself from the others. To me the way to do that is winning. When everyone has a full allotment of money and everyone can be happy then winning is important. But when the competition for that dollar heats up then a winning presence is much more important.

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