Being in the business of sport, we keep more than a casual eye on sport business in these days of inflession, and we are finding as many contradictory trends as the experts do in other economic areas. For example, this week's story on the richest golf tournament in history, the $300,000 Dow Jones Open (page 54), details the precipitous rise in prize money for pro golfers. At the same time, the U.S. Open in tennis begins this week at Forest Hills with a $176,000 purse, the largest ever offered in that sport.
This is an article from the Sept. 7, 1970 issue
But if this is bullish, there are many bear facts to consider. Here are some standings in the stock-market league that compare today's prices with fairly recent highs:
Orioles 10; down 19 points
Patriots 13; down 15
SuperSonics 4½ down 7¼
Bucks 8½ down 7¾
Supporting this gloomier view of American investing life is the story on the Helms Hall of Fame (page 18). Nobody wants to buy it. The fact is that sport, like the rest of the economy, is in a PushmiPullyu stage. Inconsistencies abound. While golfers and tennis players are cashing in and football players win their highest contracts ever, most sport-associated stocks are down.
On the day last week that the golfers in the Dow Jones started their chase for the $60,000 first prize, the National Hockey League admitted that its Pittsburgh franchise was struggling for its financial life. Earlier in the summer, the corporation that owns the Oakland Seals could not hold on to the team—though it still, as of now, has the Boston Celtics. This parent company, Trans National Communications, has watched its stock atrophy to 1 and put a big dent in the pocketbooks of some of its major stockholders, such as Whitey Ford, Pat Summerall and Dick Lynch. Madison Square Garden, which has some of the hottest and best-drawing arena properties in the country—the NBA Champion Knicks, the Rangers and the Holiday On Ice show—has seen its stock fall 75% since 1968.
On the other hand, 15 of the 24 major league baseball teams have enjoyed a rise in attendance this year, despite the fact that two of the four divisions have had no pennant races at all. And Seattle, which has the dubious distinction of suffering more unemployment than any major American city, offers a shock. Ticket sales for the city's only major league team, the NBA SuperSonics, are up 25% compared to a year ago. One Sonic official had to laugh last week when a friend said: "I never thought I'd see the day when I would say you are lucky to be in a stable business like pro basketball."
In one sense, the economic malaise has brought a new conservatism to professional sports. Investing in a sports franchise has always been a speculative venture, more red chip than blue, but this brand of gambling has decreased with the tight money market. In the boom days of the '60s, sports franchises were bought and sold like carry-out food shops, but recently there has been little turnover in ownerships. There has been a sudden turnover in the economic condition of some star athletes, however. Jerry Lucas and Lance Alworth have both been driven into bankruptcy by investing too heavily in food chains. All Sports Enterprises, which several Green Bay Packers backed, folded. Broadway Joe's opened at 10 in March 1968, rose to 15¼ and is now going begging at 1‚Öû, which means Joe Namath, owner of 145,000 shares of his namesake, is showing a paper loss of $1,179,000.
Symbolizing the entire situation is a conversation we imagine taking place when winner Bobby Nichols happened to meet a stockbroker last weekend at the Dow Jones.
Broker: How you doing, Bobby?
Nichols: Way under par.
Broker: Me, too.