It's a Bear out There

August 04, 2002

If you think the S&P 500 is run at Lowe's Motor Speedway or that
Salomon Smith Barney was a Cubs double-play combo or that 401K
refers to Morganna's brassiere size, then you don't follow
business.

And neither did I, until recently, when the markets became a bit
shaky--in the way that Katharine Hepburn playing maracas inside
a Maytag can be called a bit shaky. And even then, as my
retirement savings were halved, I paid little attention to
economics and assumed that the Laffer curve was a disparaging
nickname for Hideki Irabu's breaking ball. But all of that
changed just a few weeks ago when the bear market hit home in a
dramatic way: Kevin Garnett was asked by a reporter to
contemplate a pay cut. Granted, he'd be unlikely to accept one.
Garnett wouldn't tighten his belt if his pants were falling
down. (And most of the time, they are.) KG is paid $21 million a
year by the Minnesota Timberwolves, a team that has never won a
playoff series, yet he somewhat boldly responded, "If anything,
I'm underpaid." (Whereupon his ego abruptly inflated, with an
audible whoosh, like the driver's-side air bag detonating on a
Chrysler.)

And still, the mere notion of a superstar athlete's facing a pay
cut in the prime of his career raises the question, Are we now
witnessing, if not the beginning of the end of sport's Golden
Age, then at least...the end of the beginning?

Dire economic indicators are everywhere. Immediately after
leading Brazil to the World Cup title, Ronaldo--the most famous
athlete in the most popular sport on Earth--accepted a 10%
salary cut from Inter Milan, his financially troubled club team,
reducing him from imponderable riches to a merely obscene fortune.

Stateside, it's worse. In the years between official
recessions--from 1991 to 2001--corporate America was both
bullish and Bullish, with CEOs seeking Michael Jordan's mojo
(even as he sought theirs). "The tech and energy sectors took
off in the '90s, and those groups looked for ways to flex their
muscles and say, 'Look at us, we're titans of industry,'" says
Rick Burton, professor of sports marketing at the University of
Oregon. "Sports were a great place to show off one's
testosterone."

And so these titans put their names--in enormous lighted
letters--on arenas and stadiums. Which explains why, after Enron
went belly-up this year, the letters spelling ENRON FIELD lay in
ruins all around that stadium's perimeter: It looked like God
had barfed Alpha-Bits on the ballpark. (The Houston stadium has
since been "rebranded" as Minute Maid Park, where the Astros can
now be beaten to a Pulp or, if you prefer, an Extra Pulp.)

Adelphia Coliseum, home of the Tennessee Titans, likewise has a
new (and far less remunerative) name--The Coliseum--because
Adelphia has filed for bankruptcy. John Rigas, CEO of that cable
company, was also relieved of his 25% share in the Buffalo
Sabres. Last week Rigas was arrested on national television (on
the bright side, it was cable television) and charged with
manifold counts of fraud. He faces up to 30 years in prison,
though it may help Rigas to think of such a sentence as a few
million consecutive two-minute minors.

The economy stinks, and if you don't believe the naysayers, then
listen to the neigh-sayers. For it isn't merely Garnett and
Ronaldo who are feeling the pinch--actual studs are too. July
sale prices at Keeneland in Kentucky fell 31%. It was the first
time in eight years, reports the Lexington Herald-Leader, that
the average price of a thoroughbred decreased, a sign, perhaps,
that even Arab sheikhs do not have bottomless burnoose pockets.

Nor are golf-addled executives immune to Sansabelt-tightening.
Phoenix is now without a title sponsor for its annual PGA, LPGA
and Senior tour events. Indeed, 25 events on the three major
tours are without a corporate benefactor. Of course, the only
thing worse than not having corporate sponsorship is having it.
The world match-play championship is sponsored by Accenture, a
spin-off of Arthur Andersen. Golfers signing a correct scorecard
there will be disqualified.

(To be fair, AOL Time Warner--parent company of the Atlanta
Braves, the Atlanta Hawks and SPORTS ILLUSTRATED--is also being
probed by the SEC, though the company has been cleared of
wrongdoing by the ACC, Big East and Conference USA.)

What does it all mean for sports' future? "I used to work for
Miller, and we thought beer was recession-proof," says Burton,
who cites the traditional "sacred male verities"--beer, war and
sports--as impervious to economic downturns. America, this theory
goes, needs its brewskis, its Russkies, its Ted Kluzewskis. And
we will spare no expense in pursuit of them.

Or will we? Rookie quarterback Joey Harrington signed for $36.5
million with the Detroit Lions last week, or $20 million less
than Akili Smith did just three years ago, when he was also the
No. 3 pick in the draft. Sports, it seems, can no longer keep up
with war and beer. We'll still pay dearly to get bombs and to get
bombed. But throwing them is no longer worth what it used to
be.

COLOR PHOTO: PETER GREGOIRE

I used to assume that the Laffer curve was a disparaging nickname
for Hideki Irabu's breaking ball.

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