Previously, I wrote a piece on attendance clauses in contracts of professional sports players. Recently, a story broke which touched upon my analysis.

In Ken Griffey Jr’s contract with the Seattle Mariners, there is a clause which will pay Griff a hefty $1.25 million bonus if he is able to maintain last season’s statistics and shove in 259 more fans at home games. Well, the Wall Street Journal has reported that this season, attendance is down! What effect will this have on Griffey?

It will potentially shave $450,000 off of his contract bonus. One more interesting piece of brain food is that the median salary in the city of Seattle is $45,000. Maybe the economy has something to do with this.

Since free agency began in the 1970’s, the trend for rising contracts has skyrocketed.  In addition, there has been a continuous push towards defining sports as big business.  Just think about the deals we’ve witnessed in this past year.  C.C. Sabathia signed a 7-year, $161 million contract with the New York Yankees, who also opened their new $1.5 billion stadium in the Bronx.  This latter fact wouldn’t be as disheartening, until you remember that the New York taxpayers are picking up the tab during one of the worst recessions in American history.  A year ago we saw the Dolphins give their #1 draft pick Jake Long a 5-year, $57.75 million contract.  A player who had never stepped foot on a pro field became the highest paid offensive linemen in the NFL.  No need for more examples of the huge deals that have already been made amidst this economic crisis.

So where does this bring us?  What’s the state of affairs now?  Both the New York Yankees and the New York Mets overestimated their ability to sell high-priced seats in the newly christened Yankee Stadium and Citi Field.  Keep in mind that some of the seats in the New Yankee Stadium exceed $2,500, so who’s surprised that they aren’t filled for every game?  Both owners have now decided that they will review their ticket prices and possibly make changes.  Likewise, ticket sales are down in many places, and many teams are coming up with new, creative ways to sell seats.  The Detroit Pistons are clearly feeling the wrath of the economy, as they struggled to sell tickets for Friday night’s playoff game against the Cleveland Cavaliers.  Tickets were found on Stubhub for as low as $11, and the team’s front office even sent e-mails to Cavs season ticket holders offering tickets to those who want to make the 4 hour drive.  But the business of sports is not in a complete decline; in fact, it’s becoming increasingly impossible to make a general statement about the effect of this economic downturn on the industry.  Don Garber, MLS commissioner, said that the league’s law firm had canceled its season tickets at Yankee Stadium.  However, the large sports law firm Proskaeur Rose actually upgraded from a 20-game package to a full season ticket package in the new stadium.  Furthermore, while the housing construction industry may be in utter disarray, the Florida Marlins plan for a new $600 million stadium was just approved.

And what about the players that make these games possible?  The week leading up to this past weekend’s NFL draft hasn’t shown us that spending is down.  The Detroit Lions and the agents for Georgia QB Matthew Stafford were in talks all week to reach a deal before the draft.  Stafford was inked to a 6-year $72 million ($47 million guaranteed) which greatly exceeds Jake Long’s contract.  So the money may be getting out of hand, especially considering we are in an economic crisis.  As a future agent, these probably aren’t the words I should be saying, but it’s probably true.  But where do we place the blame?  Jeff MacGregor, senior writer for ESPN.com and ESPN the Magazine, infers that the fans are just as, if not more, responsible than those within the industry:

“Most of the men and women I’ve met over the years in professional sports would gladly go on playing their games for much less than they’re being paid now…Rather it is the market, reflecting the madness of the individuals who constitute it, that determines the relative value of that calling, whether to be a linebacker or golfer or shortstop. The athlete (and the agent and the owner) just operate within the market we allow them to create.”

At least we know that many players will take less money if the economy forces teams to do so, but probably not without a fight.  We have seen previous examples of extremely unselfish players who opted for lower contracts, despite the current trend for ever-increasing contracts.  Before the 2007 NBA season, Tim Duncan took less money so that the Spurs could create a winning team.  So maybe there’s some hope.  At least we can sleep knowing that not all athletes are only in it for the money.  For most great athletes, it’s about the game…they’ve already made enough money.  As fans we should feel lucky that it hasn’t reached the point where the money is the only factor for most players.  Imagine if the USA basketball team had to revert to using college players for the next Olympics competition.  As for sports in general, this industry may be feeling the effects of the economic crisis, but you can count on it returning to its normal form when the economy rebounds.  The Yankees will continue spending, the Marlins will still probably offer two-fer ticket deals in their new stadium, and most fans will watch ESPN waiting to hear about that next big contract with a mixed response of amazement, excitement, and disgust.  Hopefully I will be negotiating it.

Veterans of selling tickets with a bad team, the economy is only part of the puzzle the Pirates have to solve when it comes to putting fans in the seats. Posting 16 straight losing seasons forces the Pirates marketing and ticket sales divisions to get creative.

Some of the new strategies Pittsburgh has employed are keeping prices at the same level for the last seven years, offering good, affordable season tickets, and giving value in areas that would attract fans to the ballpark, such as concessions.

The Pirates offer a full-season ticket plan that is only $399. Fans can also sit in the first few rows of left field for $599. That breaks down to about $5 and $7 respectively per game. This pricing approach makes it very easy for people to make it out to every home game.

Pittsburgh also offers an all you can eat ticket for $35 where fans can enjoy all the food they want in the right field bleachers. The team originally targeted families for this package, but it is also popular among college students. The Pirates are also offering $1 hotdogs for Friday games.

The one advantage that the Pirates may have over some places is the ballpark in which the team plays. It is widely regarded as one of the nicest stadiums around baseball. Another advantage that may be overlooked is the state of the fans in Pittsburgh. Pittsburgh fans enjoy annual success of the Steelers and more recently of the Penguins, so why would they care about a team that finished 67-95 a year ago? Because Pittsburgh is a sports town and these fans want to see nothing more than the Pirates put a competitive team on the field.

It would be much easier to sell tickets if the product that the Pirates put on the field matched the level of enthusiasm of the fans, but it hasn’t been that way for a while. This is why it’s so important for the Pirates to use other methods to fill the seats when the team isn’t performing as well as its city counterparts.

The Pirates will also have a full slate of giveaway promotion days such as bobble head days and hat days. They are proving that despite a poor economy, corporate sponsors are still investing in sports as an avenue to market their company. The only difference is sponsors are very meticulous in making sure that they will see a return on investment. Since the Pirates are working hard to find different ways to keep the ballpark full, it will ease some of the sponsors concerns.

Innovation becomes that much more essential for the lackluster Pirates to weather the economic storm. But the Pirates have shown that tough times are only part of the job when selling baseball tickets in Pittsburgh.

While the Yankees and Red Sox are throwing around dollars like it’s nobody’s business, fourteen teams started this season with a lower payroll than last season, and those fourteen teams include the Bronx Bombers and the Red Sox.  Ten of those teams cut their payroll by over $10 million.  This should serve as reinforcement that teams are getting serious about cutting spending, which will affect players making 40 man rosters for the first time and All-Star veterans alike.

Remember that many players with extensive All-Star experience and potential Hall of Famers signed Minor League deals this offseason.  There is less room to negotiate under the constraints of a sagging economy.  However, this is when the best negotiators are able to shine.

There has been much concern about the financial conditions of NHL teams the past few months.  Obviously, a struggling economy isn’t good for any sports team.  So how will the depressing economic conditions of both North America and the National Hockey League affect NHL player agents?

NHL General Managers held their winter meeting last week, where they addressed the issue of how to counter the downtrodden economy.  It is expected that the salary cap will be reduced next year to help franchises deal with declining profits.  Since the 2005 Collective Bargaining Agreement was established, the salary cap has been $39M, $44M, $50.3M, and $56.7M this year.  A fair estimate is that the cap will decrease about $3M.

With the above in mind, let us consider the situation in which an agent represents an elite player on an average team.  Actually, make it twins, twins who have played together their entire lives.  They are equally talented and want to keep playing together.  Their contracts are about to expire, and it’s time to begin negotiations for contract extension (the NHL CBA prohibits contract renegotiation and allows extension negotiations only in the final year of the contract term).

This is the situation that player agent J.P. Barry faces in representing twins Henrik and Daniel Sedin.  Thus far, negotiations have gone well, but no agreement has been made.  The Sedin twins play for the Vancouver Canucks.  Vancouver’s GM, Mike Gillis, is faced with the challenge of fitting two elite players into a shrinking salary cap in a league with shrinking revenues.  On the other side, Barry is faced with the challenge of trying to secure valuable deals for two elite clients, on the same team, who have never played without seeing their twin brother streaking down the other side of the ice.  Players of similar stature have garnered significant contracts this year: Henrik Zetterburg signed a 12-year deal for $6.1M annually, Eric Staal signed a 7-year deal for $8.25M annually, and Anze Kopitar signed a 7-year deal for $8.6M annually.  The Sedin twins should be making somewhere in that ballpark.  It would be a significant raise for the twins who each currently make $3.575M annually.

Barry has called off negotiations to let the twins and the team focus on the rest of the season, so there won’t be much time to negotiate an extension when the season is over; NHL free agency begins on July 1^st.  A tough reality that NHL player agents must face is that their players’ salaries may not increase as much as they should.  The Sedins should be making around $7M a year, but their special circumstances of wanting to stay together, combined with the NHL’s less than desirable financial situation, create the reality that it just might not happen.  A mechanism that is extremely useful to MLB player agents, performance bonuses, is not available to Barry in negotiating the Sedins’ extension.  Per 50.2(C)(2), the NHL CBA allows performance bonuses for three categories of players: (1) players signed to an entry-level contract, (2) players at least 35 years old who sign one-year contracts, and (3) veteran players (played more than 400 games) who sign one-year extensions after returning from long-term injuries.  The Sedins don’t fit into any of the three categories.

Barry’s challenge in negotiating an extension for the Sedin twins will become the norm for NHL player agents if NHL franchise revenues continue to fall.  Negotiating lucrative deals for NHL players is harder than ever before.  So, to those agents representing elite players seeking more money…good luck.

For the majority of teams, Manny is not even close to an option.  Check out this piece by Doug Miller in MLB.com.  Players with extensive All-Star experience and potential Hall of Famers signed Minor League deals this offseason.  Sure, many of them will end up making 40-man rosters and get a huge increase in salary, but teams are getting serious about cutting spending.

Names you have heard of who signed Minor League deals include: Brendan Donnelly, Freddy Garcia, Marcus Giles, Eddie Guardado, Matt Herges, Jason Jennings, Andruw Jones, Jacque Jones, Bobby Kielty, Rob Mackowiak, Mark Prior RHP, Glendon Rusch, Mike Sweeney, Juan Uribe, Omar Vizquel, Daryle Ward, Jeff Weaver.

Now, I am not suggesting that Manny Ramirez sign a Minor League contract.  And I am not suggesting that Ramirez need be in Spring Training as early as many others in the league.  However, I would like to point out that Boras might not be playing his cards right in this situation.  He is the master of leverage, but who is he pitting up against the Dodgers?  Does Colletti truly believe that there are any suitors out there who will pay anywhere near what the Dodgers are offering?

Being a casualty of the economy myself, I know how hard it is to find a job, let alone one that pays well. While athletes are still making their millions, we may see in the near future that the size of the contracts decrease. Rule of thumb seems to be contracts get bigger and bigger, but that may all change. The next draft will be that of the NFL draft, and I believe those prospects entering the 2009 NFL draft and the agents representing them will soon realize the dollars may not be there like in the past.

In the ’08 draft we saw number 1 pick Jake Long sign a 5 year $57.75 million contract, making him the richest offensive lineman in the NFL. We also saw Matt Ryan sign a 6 year $72 million contract with $34.75 million in guarantees. Those numbers are staggering in any economy. With the Lions most likely landing the number one pick it will be very interesting what kind of money they are willing to spend. Let’s not forget that Detroit has been hit hard during this economic downturn.

When it’s signing endorsement deals, free agents, draft picks, or in the Yankees and Mets cases filling brand new stadiums, things as we know it in the sporting world has most certainly changed. It’s now just a matter of how long will this last.

As I sit on the front porch of my house listening to the cheers of the high school football stadium that rests less then a hundred yards from my home, I cannot help but to feel a sense of nostalgia and longing for those blissful, care-free days.  Sitting in the stands with my friends, laughing and smiling while we cheer on our other friends as they smash the opponent all over the gridiron while simultaneously making plans for the post-game party.  It didn’t matter if we had won or lost, everyone was at those parties letting the pseudo-worries of high school melt away as we stared wide-eyed into future endeavors such as college, careers and inevitable success.

In the economic climate we find ourselves in now, it is easy to look back at what was and feel a sense of longing.  With corporate lay-offs on the rise, the unpredictability of a roller coaster stock market, and unemployment rates the highest they have been in 25 years, our generation is feeling the toll of an uncertain future that can certainly be defined as Depression-esque.  Add those happy thoughts to the already cut-throat nature of the Sport Business Industry and us 20-somethings find ourselves in quite the unenviable predicament.

But as Hyman Roth so eloquently stated in the immortal Godfather II:  “This is the business we’ve chosen…”

And as us “newbees” of the business duck and weave our way to the top, the grizzled veterans are also making preparations to combat this crisis as well as forge ahead to accustom themselves with the upcoming administration’s new policies.

It will take sometime to fully understand and appreciate the effect President-elect Obama’s mandates will have on the sporting industry, but we can certainly speculate.  As Lester Munson of ESPN reported, Obama’s tax increase will have a significant effect on team owners and players, slow the sale of professional teams and increase the power of the player unions.  The latter is a no-brainer since democrats are traditionally pro-union, but with the impending tax increase, will owners have to start paying their athletes more?  And if so, will they then go as far as to raise ticket and concession prices to cope with the rising expenses?  One thing is for sure, as we businessmen try to gauge the effect this administration will have on our future, our jobs and our wallets, it is the most important part of the sporting industry that is going to be lampooned the most…the fans.

But hey, I am not a pessimist.  I truly believe that if you work hard enough you will be able to achieve anything you would like.  Even in the hardest of times, that is the creed that America is founded upon.  A common ground is always found between politics and sports, that is the beauty of it.  And it is that promise of a new day that gives myself, and hopefully all you aspiring sports professionals, the hope to not give up that dream.

But like I said before, it is certainly easy to look back with longing…