The Tokyo Olympics have finally gotten underway. Since the Japanese authorities have banned spectators, these games will probably be pretty boring to watch on the television. You don’t realize how much a raucous, engaged crowd can enhance the overall experience until there isn’t one. Regardless, I probably wasn’t going to tune in much anyhow.
Frankly, I interest level is lacking, and, judging from the lack of discussions I have had about the Olympics, it seems I am not alone. Obviously, that is a blanket statement, and I could be wrong. However, I think it safe to say this is the least anticipated Olympiad in recent memory, if not ever.
This begs the question: Is America’s appetite for sporting events waning, or is it just the Olympics?
Based solely on television ratings, it would seem folks aren’t as interested in sports, in general, as they once were. The NBA, MLB, and the NHL have struggled to maintain viewership since the start of the pandemic. Although the ratings for this year’s NBA Finals were up from last year, they are still well below where they were in 2019. As for the other two, league commissioners should be very worried. The recent MLB All-Star game drew a disastrous 8.3 million viewers. While that is a miniscule improvement over 2019’s debacle, it is still, get this, less than 25% of the record number of 36 million Americans who watched the 1980 game. As for the NHL, let me just put it this way: Tucker Carlson and Sean Hannity drew higher ratings.
Of course, apologists would argue more people are streaming contests on their phones and other devices. As such, traditional ratings metrics aren’t as important as they used to be. Perhaps there is some truth to that argument; however, ask yourself: are you as interested in all of this stuff as you once were? If not, why do you think that is?
While everyone will have their own answer, mine is pretty simple: all of these leagues, teams, and even players think their customers are fools, and fools and their money are to be parted. How else can we explain the amount it costs to go to a game and how much money these people are making? Hey, it has to come from somewhere.
Consider this: in 2021, the minimum salary in the MLB is $570,500. That is the least a player can expect. To put that number into perspective, that is over 8x the median household income in the United States (2019 data). Again, that is the minimum. So, what about the median salary in the MLB? This year it is an eye-popping $4.17 million. Whew. It would take the median household 60 years to make that amount of money.
If you think that is something else, the NBA is even worse. The minimum salary in that league is $898,310, and the average is $8.2 million. What’s more, that minimum is for rookies. If you can manage to stay in the league for 3 years, riding the bench the whole time, the least you can make is $1,678,854, the very least.
Then, there is the issue with the highest paid players. In the MLB, it is a right-handed pitcher for the LA Dodgers by the name of Trevor Bauer. He stands to make $40 million this year in salary alone. As for the NBA, Stephen Curry of the Golden State Warriors will take home a little over $43 million before endorsements.
To put THOSE numbers into perspective, it would take our median household 579 years to make $40 million. To give THAT time frame a reference point, 579 years ago would have been the year 1442, 50 years before the start of European exploration of the ‘New World’ and over 300 prior to the Declaration of Independence. The mind boggles.
Personally, I checked out of professional sports a few years ago. Without going into the gory detail, let me just say my favorite childhood team, the Baltimore Orioles refused, yes refused, to get my son an autographed baseball for his birthday. This despite the fact my parents had a season ticket package at the time, and had for years. Shoot, I was willing to pay something for it, but the team representative made it quite clear I would have to go through a licensed merchandiser to obtain such a thing and that it would be impossible to get it personalized. It was all about making the extra buck, and not about fostering team loyalty.
As for the 800 lb. gorilla, the NFL, who knows what the upcoming season will bring. However, according to profootballnetwork.com, here are the 2020 TV ratings compared to 2019: ESPN’s Monday Night Football was down 3%; CBS Sunday was down 4%; Fox Sunday was down 6%; Fox Tuesday Night Football was down 6%, and NBC Sunday Night Football was down an eye-watering 16%. And the Super Bowl? It drew its lowest TV ‘household rating’ since 1968 and had almost 10 million fewer viewers than in 2019.
Of course, everything could change at the drop of a hat, but I don’t think it will. Yes, some level of popularity will return, but I believe we have probably seen the peak of professional sport in the United States. While my interest had been waning for years, last year’s shortened seasons, lack of crowds, and location ‘bubbles’ seem to have alienated casual fans. They found there was plenty of other stuff to occupy their time, as opposed to watching a bunch of multi-millionaires play games.
Don’t get me wrong. Catching a game at hallowed places like Fenway and Wrigley is still a special treat for even the most ambivalent of us. However, what of teams with more regional, and even local, fanbases? Well, the proof of the pudding is in the eating, and John Meoli at The Baltimore Sun had this to write about the Orioles on June 8, 2021:
Comparing the early-season attendance in 2019 and 2021 shows a difference of 250,065 fewer fans at such games this year. Much of that is owed to the capacity limits, but that reasoning dried up June 1, when the team opened the ballpark at full capacity.
A record-low 5,337 tickets were sold June 1 to see the team end its 14-game losing streak, tied for the second longest in club history behind the infamous 21-game streak to open the 1988 season. In the five games since capacity restrictions were lifted, the Orioles announced a total of 42,683 attendees — not even enough to fill the ballpark when combined — for an average of 8,547. The peak was Friday night’s announced crowd of 12,009.
Through 28 home games this season, the Orioles have had 228,924 fans — an average of 8,176 per game. In 2019, when the Orioles drew 1,307,807 in 81 home games, the fewest since Camden Yards opened in 1992, they averaged 16,146 — the third fewest in the majors ahead of only the Miami Marlins and Tampa Bay Rays.
The comeback to this is the team, the Orioles, has been so lousy for so long it is amazing anyone shows up. There is much truth to that. However, the Birds aren’t alone. Other smaller market teams are also having trouble getting folks into the stadium, at least when compared to pre-pandemic levels. This is important as the stadium experience is a key element in growing your fanbase. No one wants to go to an empty stadium, and no one wants to watch a game on the TV without any fans.
But all of this is about professional sports. What about the Olympics?
In my opinion, the Tokyo games will suffer guilt by association, at least to some degree. People are tired of athletes, in general. You can call it consumer fatigue. Further, the planned absence of fans is disappointing, as it is far more fun to watch an event with an energized crowd. Finally, following a year of lockdown for many, folks just aren’t as interested in sitting in front of the set watching other people play sports. They have other stuff they can, or should, be doing.
As for me, as I mentioned in the first paragraph, you can count me as one of those.
Take care, have a great weekend, and be sure to listen to our Trading Perspectives podcast.
Chief Economist & Managing Director
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