Ahead in the Count

The Impact of Recession

Most of the writers on this blog make their living through the business of youth and high school sports. While the “business” side isn’t the primary motivator for any of us, it does put food on the table so we are very aware of the economic environment and it’s impact on our respective companies.


For several months now we have been swamped with news of the [insert your oft cliché here] global financial crisis. It isn’t pretty. I don’t work in finance but I’ve had a unique perspective since I live in Lower Manhattan and could hit a fungo to Wall Street from the roof of my apartment building. If you hang out in my neighborhood at around 6pm on a weekday you’ll see bankers and traders headed to the subway looking like they just got sent to the showers after giving up seven runs on twelve hits in one and a third innings. I wish I could say I don’t know how that feels.

 

 

President Herbert Hoover, throwing out the first pitch for a Senators-Athletics game in 1931, was often showered with boos.

President Herbert Hoover, throwing out the first pitch for a Senators-Athletics game in 1931, was often showered with boos.

The media coverage has been comprehensive to say the least. The perspective of every industry has been taken — housing, auto, finance, education, retail, etc. — and the numbers are staggering. The NY Times recently ran a piece by Ken Belson about baseball in the depression era . It’s worth reading, especially for the sports history buffs out there. Both the optimistic and the pessimistic viewpoints are taken — the former highlighted by the Yankees free agent singings (“CC” is apparently short for cha-ching) and the latter by the now familiar saying of “we haven’t seen anything quite like this.” The impact on pro sports has been covered in that piece and others. But what about youth and high school sports?

 

My initial reaction is that youth sports – and really any spending around kids and their development is relatively recession proof. (By relatively I mean that I expect that these expenses will be cut last).  In addition I feel like recessions encourage a re-concentration on family values. Lastly, I think that youth sports instruction has some expensive competitors – namely, video games and vacations – that may get cut from the budget before a parent decides not to have their child take an after-school hitting lesson or go to an additional week of summer camp.

 

These are all hunches so I decided to reach out to my fellow bloggers to see what’s happening in the business of youth and high school coaching. A few noteworthy replies from three coaches in three very different parts of the world:

Tal Alter wrote from South Africa regarding the impact on non-profits:

In the short term, it’s not helping us. We have had to cut our budget for the remainder of the fiscal year by 25%, which means that we are essentially cutting the size of our program in half – reaching half the number of kids we were planning on reaching.

Much of the sports-based youth development world (non-profits, specifically) relied heavily on the US financial firms for funding. Their downfall has meant that pledges are going unmet and funds that were budgeted for prior to the fiscal year will not be coming in, as people on Wall Street have either retreated inside their shells until things improve or actually don’t have the money that they would have contributed otherwise.

In the long-term, the bright side is that it forces the organization to look at local sustainability more closely so that each of our sites is more responsible for raising the money to fund their specific program with primarily logistical support from the U.S.

 

Dan Spring coaches on the opposite side of the world (literally and figuratively) in Orange County, California. His response:

“Knock on wood, I’ve seen no signs of Spring Training slowing down due to the economy.  I had a waitlist at winter break camp last weekend and already have more lesson requests than I can handle. I should qualify that statement by reminding you that my fields are in once of the most affluent neighborhoods in the country.

 

My predictions: 1) the first product that parents will cut back on is lessons. I haven’t seen it yet but I’m definitely prepared in case it happens.  2) Summer camp attendance will be UP.  Instead of spending $10k for a week in Hawaii, families out here will stay home and send their kids to camp for a few hundred bucks.  For families that still have disposable income in June ’09, $300 bucks for 30 hours of camp seems like a pretty good deal (I’m fairly certain you can’t get a high school kid to babysit your kids for less than that).

 

My concern for families not in the top 1% of the tax bracket is that video game play, etc will actually rise.  Compared with quality afterschool programs, private lessons, tutors, piano lessons, etc that run in the neighborhood of $40-$100 an hour, one $60 copy of Guitar Hero has the ability to keep their kids occupied for weeks and months on end (until they get sick of the game in which case another $60 bucks buys another few months of “babysitting).

 

Interesting stuff. I also got some comments from Matt Whiteside regarding the impact on his All-Star Performance business in St. Louis, MO:

 

I have seen a slight downturn in cage rentals in the months of November and December.  However, January is getting packed.  If two pitching instructors( yours truly is one) doing 90 -100, 20 minute lessons over a 5 day span a week, with waiting lists for both, and hitting instructors rather full as well, is any indication, lessons have remained steady.  I have had this conversation with a few people, and the comment is always the same.  Your kids betterment/interests are the last thing people cut back on. 

 

I have reached out lately to youth organizations/leagues lately, and am doing a series of free coaching clinics on pitching, hitting, fielding, and how to run a team practice, to get people in the door.  Then we hand them a coupon with discounts on cage rentals to get them back in.  It could be that this is the indoor time of year,or maybe this actually is helping, but we have had several new clients recently…..

 

In regards to our Gamers (travel team) program, 160 families, our final installment for the year was due January 15th, we extended an offer to pay the last $500 on February 15th to try to help out…..currently we are close to having 100% paid in full….we have 10 players on full scholarship that we raise/generate funds to cover their costs.  These families were targeted for this prior to the tryouts in August though…..

 

This isn’t the whole story but it’s a broad perspective – and a global one at that. The market may be struggling on Wall Street, but pitchers and catchers are still reporting in Florida and Arizona next month. Mom and Dad: if you do go on vacation, take your kids to catch some Grapefruit or Cactus League action. 

Advertisements

January 20, 2009 - Posted by | Media Commentary, written by Ted Sullivan

1 Comment »

  1. 29 JAN *U.S. INITIAL JOBLESS CLAIMS ROSE 3,000 TO 588,000 LAST WEEK…coaching likely to see flood of new applicants, likely means more individual attention per youngster.

    Comment by VCNY/UK | January 29, 2009


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: