(05-05-2014 09:45 PM)miko33 Wrote:  I agree with you that sports teams are like the regional monopolies enjoyed by utilities. However, I would argue that sports still are not staples like water, electricity, fuel, etc. There are substitutes for watching sports on TV. You can watch movies, play video games, go outside, etc. You have no real substitute for electricity. You may purchase a small windmill or solar panels to augment the electricity you take from the grid, but that's about it.

IMHO, I believe the costs for sports are overheating. Like education, costs are outpacing inflation. Granted, it's quite possible that people are monetizing fandom and there is no bubble.

Sure, in terms of being an absolute necessity (the bottom level of Maslow's hierarchy of needs), sports aren't anywhere near there. However, the substitutes of movies, video games, etc. have all been in existence as competition for sports viewership for a long time. In fact, the whole reason why sports rights fees have continued to rise is because sports consistently to outperform all of those alternatives on a relative basis. Even the most successful movies today are making a fraction of successful movies from 20 years ago on an inflation-adjusted basis, while the top-rated TV shows from today would be canceled if they received the exact same rating in the 1990s. That hasn't been true for sports - attendance and viewership have continued to rise despite the increasing prevalence of alternatives on TV and the Internet. Sports might not be a necessity like water and electricity, but it's certainly a product with more inelastic demand akin to, say, alcohol.

Now, that doesn't mean that there aren't some danger points for sports going forward. I don't think the average sports fan will stop watching sports in favor of movies as an alternative... but a sports fan may very well stop or cut back on watching live sports in favor of just following scores on the ESPN SportsCenter app or Twitter. In essence, it's easier to be a sports fan without actually having to watch live games (and those live games are what make sports uniquely valuable compared to movies and TV shows that can be streamed at any time on Netflix or Hulu). It used to be that being a sports fan meant being a season ticket holder and watching every road game on TV. Now, being a sports fan is increasingly about clicking on who you "like" on Facebook and following scores via mobile apps.

So, the main issue going forward for sports leagues and teams is how to capitalize on that larger number of casual fans as opposed to squeezing the most dollars out of a smaller number of hardcore fans. Some leagues are actually doing a pretty good job about shifting to this new world (the NFL and NBA in particular for the pros and the Big Ten and SEC at the college level), while others are going to need to adjust a lot more. (I can go on and on about what I believe MLB needs to do, but that's an entirely different discussion.)