Evidence Is Mounting of a Pro Sports Backlash; U.S. Economic Growth May Suffer
The National Football League (NFL) has opened a can of worms it may wish it had avoided. The “taking a knee” craze started by former 49ers quarterback Colin Kaepernick has spread throughout the league, polarizing the fan base that supports it. When the inevitable copycat protests spread to other outposts, a small but significant drag on U.S. economic growth may transpire.
In fact, it’s already happening.
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The Los Angeles Sparks of the Women’s National Basketball Association (WNBA) left the court during a late September 2017 match, while the host Minnesota Lynx linked arms. This game was just a shootaround. It was Game 1 of the WNBA Finals. (Source: “WNBA teams link arms, leave floor during national anthem at Game 1 of Finals,” ForTheWin, September 24, 2017.)
Considering that the Golden State Warriors have been “disinvited” from the traditional White House post-Championship meet, and NBA Commissioner Adam Silver’s progressive leanings, we expect these protests to carry into the NBA. They’ll have a powerful ally in known Trump adversary and legendary guard, LeBron James.
We’re talking about the third-highest revenue-grossing sport in America, with annual revenues approaching $5.0 billion. More will be known once the NBA season kicks off in October.
The protests are also now spreading to baseball. On September 24, the first Major League Baseball (MLB) Player—Oakland A’s rookie catcher Bruce Maxwell—decided to take a knee. (Source: “A’s Bruce Maxwell first MLB player to kneel for anthem,” SF Gate, September 25, 2017.)
It’s uncertain whether the trend will truly catch fire in MLB, where only around 10% of all players are African American, but it bears watching. MLB is the second-highest revenue-grossing sport in America, approaching $10.0 billion annually.
But if it does, it may not go down so well with fans. There’s an old saying, “Baseball is as American as apple pie.” The fanbase is generally more mature and “white” than other sports. It’s considered about as American as it gets, so the turn-off risk-factor among fans is great.
If sports revenue begins dropping inline with cable TV viewership trends, lost revenue will be significant. The NFL is on the front lines as it was the genesis of the protests.
So far in 2017, there’s been a 10% drop in Sunday Night Football total viewership. This is on top of a seven-percent decrease last season. Showing that trends are still cresting, there was an eight-percent drop week-over-week immediately after the Trump tweets. (Source: “NFL Backlash: ‘Sunday Night Football’ Hit With Season-Low Ratings,” Breitbart, September 25, 2017.)
Last year, the NFL blamed declining viewership on the distraction that was the U.S. presidential election. So much drama filled the airwaves. This year, no such credible excuse exists. The displacement of local populations from Hurricanes Harvey and Irma only go so far.
It’s become clear that “taking a knee” protests are a clear driver of Americans pulling the plug. Combine this with a double gut-punch in declining youth participation rates, and the NFL has a major problem on its hands. “Taking a knee” protests are turning off fans in droves.
How long before adverse effects are felt on the local level?
The Economics of Sport in America
Pro Sports is big business in America. Just by looking at the combined revenues of the top four sports (NFL, MLB, NBA, NHL), this fact becomes evident quickly. Annually, they gross around $31.0 billion—strictly from the revenue they generate. That equals only around 0.187% of aggregate U.S. economic growth—an insignificant sum in the greater scheme.
But there’s much more to it than that.
Think of all the spin-off revenue that occurs at the local level. The food and restaurant (hospitality) industry; retail shopping from surrounding stadium build-outs; alcohol sales and sin tax receipts; advertising sales and so on. Any impact in waning sports popularity and attendance will negatively impact local service industries.
But perhaps the biggest impact is the shadow impact it has on consumption, as thousands of jobs are tied to the discerning fans.
According to sources that track such metrics, America’s sports industry contributes 456,000 jobs with an average salary of $39,000 per job. That’s another $17.78 billion in industry salaries (2013 numbers), not including the players themselves. (Source: “Not Just a Game: The Impact of Sports on U.S. Economy,” Emsi, July 9, 2017.)
Of course, struggling or out-of-work sports industry workers will have negative knock-off consumption effects downstream. The tavern worker or hot dog vendor who generates less revenue for themselves will, in turn, consume less. Simple economics.
We haven’t even factored in player salaries, which add another $12.0-$15.0 billion annually to the pile. The top five MLB clubs, for example, have a 2017 combined payroll of over $1.0 billion. When players start earning less, they will consume less also. Although the economic effects are likely much more dispersed.
2017 Opening Day MLB Payrolls
| Team | 25-Man Roster | Disabled List | Total Payroll |
| Los Angeles Dodgers | $155,887,854 | $37,354,166 | $242,065,828 |
| New York Yankees | $168,045,699 | $5,644,000 | $201,539,699 |
| Boston Red Sox | $136,780,500 | $38,239,250 | $199,805,178 |
| Detroit Tigers | $168,500,500 | $11,750,000 | $199,750,600 |
| Toronto Blue Jays | $159,175,968 | $2,169,400 | $177,759,368 |
(Source: “SMLB Team Payrolls,” SteveTheUmp, last accessed September 27, 2017.)
We’ve only just scratched the surface. There are continuing U.S. economic growth effects if we continue drilling down the consumption pyramid (i.e. construction of new pro stadiums). But the ones summarized are the most impactful. Between pro sports revenues, tied-in salaries and downstream consumption spin-off, and player salaries, we’re probably approaching a gross dollar impact of $100.0 billion, or 0.58% of total U.S. GDP.
Now, the real effects will obviously be much less than that. Unless you think pro sports is going to shrivel up and die overnight. I don’t. But the potential grating effect on U.S. economic growth can’t be discounted. Especially if a broader protest continues to engulf fans in other major sports.
What Happens Next?
It will be hard to walk back the damage, even if measures are taken today. The “disrespectful” nature of player protests are unlikely to be forgotten quickly. Nor are the players likely to back off voluntarily unless forced by League dictate. It’s a nightmare situation even the best PR firm would struggle to control.
As mentioned, one of the main reasons is the growing nature of the protests. Consider that on Week 2, the entire Pittsburgh Steelers team took a knee. Only one Steeler player—left tackle Alejandro Villanueva—came out and stood on the field. The fact that Villanueva’s jersey is the top selling jersey in football (an obscure offensive guard!) tells you everything you need to know about how jilted the fans feel.
The Pittsburgh Steelers are among the most high-profile teams in pro football. We’re not sure the ratio of progressive vs. conservative football fans in this industrial working class city, but there’s certainly a big percentage of the latter.
Now multiply the potential for 32 similar-type situations across America, and among other sports, we could have a problem brewing in the service sector. The same sector that’s producing 70%-80% of jobs since the Great Recession. Of course, most won’t be affected by these protests. But a significant portion will. This could easily wipe out tens of billions of dollars annually in U.S. economic growth if a worst case scenario unfolds (perhaps 20%-30% of fans swearing off sports completely).
For an economy only averaging two-percent growth since 2010, the impact could be significant. After all, the next U.S. recession may not result from an implosion of a specific sector. It may result from death by a thousand paper cuts.
