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It's a Bear out There
Steve Rushin
August 05, 2002
If you think the S&P 500 is run at Lowe's Motor Speedway or that Salomon Smith Barney was a Cubs double-play combo or that 401K refers to Morganna's brassiere size, then you don't follow business.
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August 05, 2002

It's A Bear Out There

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If you think the S&P 500 is run at Lowe's Motor Speedway or that Salomon Smith Barney was a Cubs double-play combo or that 401K refers to Morganna's brassiere size, then you don't follow business.

And neither did I, until recently, when the markets became a bit shaky—in the way that Katharine Hepburn playing maracas inside a Maytag can be called a bit shaky. And even then, as my retirement savings were halved, I paid little attention to economics and assumed that the Laffer curve was a disparaging nickname for Hideki Irabu's breaking ball. But all of that changed just a few weeks ago when the bear market hit home in a dramatic way: Kevin Garnett was asked by a reporter to contemplate a pay cut. Granted, he'd be unlikely to accept one. Garnett wouldn't tighten his belt if his pants were falling down. (And most of the time, they are.) KG is paid $21 million a year by the Minnesota Timberwolves, a team that has never won a playoff series, yet he somewhat boldly responded, "If anything, I'm underpaid." (Whereupon his ego abruptly inflated, with an audible whoosh, like the driver's-side air bag detonating on a Chrysler.)

And still, the mere notion of a superstar athlete's facing a pay cut in the prime of his career raises the question, Are we now witnessing, if not the beginning of the end of sport's Golden Age, then at least...the end of the beginning?

Dire economic indicators are everywhere. Immediately after leading Brazil to the World Cup title, Ronaldo—the most famous athlete in the most popular sport on Earth—accepted a 10% salary cut from Inter Milan, his financially troubled club team, reducing him from imponderable riches to a merely obscene fortune.

Stateside, it's worse. In the years between official recessions—from 1991 to 2001—corporate America was both bullish and Bullish, with CEOs seeking Michael Jordan's mojo (even as he sought theirs). "The tech and energy sectors took off in the '90s, and those groups looked for ways to flex their muscles and say, 'Look at us, we're titans of industry,' " says Rick Burton, professor of sports marketing at the University of Oregon. "Sports were a great place to show off one's testosterone."

And so these titans put their names—in enormous lighted letters—on arenas and stadiums. Which explains why, after Enron went belly-up this year, the letters spelling ENRON FIELD lay in ruins all around that stadium's perimeter: It looked like God had barfed Alpha-Bits on the ballpark. (The Houston stadium has since been "rebranded" as Minute Maid Park, where the Astros can now be beaten to a Pulp or, if you prefer, an Extra Pulp.)

Adelphia Coliseum, home of the Tennessee Titans, likewise has a new (and far less remunerative) name—The Coliseum—because Adelphia has filed for bankruptcy. John Rigas, CEO of that cable company, was also relieved of his 25% share in the Buffalo Sabres. Last week Rigas was arrested on national television (on the bright side, it was cable television) and charged with manifold counts of fraud. He faces up to 30 years in prison, though it may help Rigas to think of such a sentence as a few million consecutive two-minute minors.

The economy stinks, and if you don't believe the naysayers, then listen to the neigh-sayers. For it isn't merely Garnett and Ronaldo who are feeling the pinch—actual studs are too. July sale prices at Keeneland in Kentucky fell 31%. It was the first time in eight years, reports the Lexington Herald-Leader, that the average price of a thoroughbred decreased, a sign, perhaps, that even Arab sheikhs do not have bottomless burnoose pockets.

Nor are golf-addled executives immune to Sansabelt-tightening. Phoenix is now without a title sponsor for its annual PGA, LPGA and Senior tour events. Indeed, 25 events on the three major tours are without a corporate benefactor. Of course, the only thing worse than not having corporate sponsorship is having it. The world match-play championship is sponsored by Accenture, a spin-off of Arthur Andersen. Golfers signing a correct scorecard there will be disqualified.

(To be fair, AOL Time Warner—parent company of the Atlanta Braves, the Atlanta Hawks and SPORTS ILLUSTRATED—is also being probed by the SEC, though the company has been cleared of wrongdoing by the ACC, Big East and Conference USA.)

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