CHICAGO (Reuters) - The National Football League said on Tuesday it will lay off almost 14 percent of the league’s staff as part of a cost-cutting plan in response to the recession.
The move to eliminate about 150 jobs over the next 60 days is a stark reminder that no sport, even the most popular in the United States, is immune to the slowdown.
The layoffs do not include jobs at teams, which are controlled by individual clubs.
“These are difficult and painful steps,” NFL Commissioner Roger Goodell said in a Tuesday memo to staff, “but they are necessary in the current economic environment.”
“I would like to be able to report that we are immune to the troubles around us, but we are not,” he added.
The NFL employs 1,100 people in three locations: league headquarters in New York, NFL Films production facilities in Mt. Laurel, New Jersey, and the NFL Network and NFL.com production facilities in Los Angeles.
Sports leagues around the world have been hit by the global financial meltdown, as consumers and companies cut back on spending. Several top league executives at the Reuters Media Summit last week outlined survival strategies.
The weak U.S. economy has hurt the NFL just like any other business, raising such costs as stadium financing while also hurting ad, sponsorship and consumer spending, NFL Executive Vice President Eric Grubman said at the summit in New York. The league has already eliminated a “substantial” amount of its travel and entertainment and promotional spending.
“Our revenue reduction is quite small, but it looms large, because the margins at the National Football League in total are not enormous,” said the league’s top business executive. The NFL’s revenue last season topped $7 billion.
So far, ticket sales are running about 1 percent behind last year’s record attendance of 22.3 million.
“The no-shows are up a little bit,” said Grubman, adding that the slowdown’s real impact may not be felt until next season.
Requests by companies to modify sponsorship deals are no different from other years and the NFL weighs such requests based on whether they make sense for the league long-term.
However, Grubman said the sport was insulated somewhat by its TV deals, which generate about $3.7 billion a year, as well as by the size of its fan base.
“We are a giant platform, a giant billboard. That giantness is real strength,” he said. “I like our chances in this market.”
The league had already signaled its intention to seek salary cuts from its players, when it opted in May to end early its contract with the players’ union.
Also at the summit, PGA Tour Commissioner Tim Finchem said the golf tour is already talking to retail, energy and environmental companies about possible sponsorships should current corporate backers pull out.
NASCAR was hit earlier as high gasoline prices pinched fans who drive a long way to attend its car and pickup truck races; but the pain has only increased as corporate sponsors like General Motors Corp dial back spending. Chief Executive Brian France said the racing circuit’s sponsorship revenue should grow more slowly in 2009 and possibly decline.
On Friday, Japan’s Honda Motor Co Ltd backed out of Formula One racing in a move to cut costs amid vehicle slumping sales. Honda car sales in the United States, its biggest market, slumped 32 percent last month.
In October, the National Basketball Association said it would cut about 80 jobs, or 9 percent of the league’s workforce. Major League Baseball Commissioner Bud Selig has frozen the sport’s budgets and hiring, and encouraged teams not to get “too cocky” about ticket pricing for 2009.
Reporting by Ben Klayman; Editing by Tim Dobbyn and Gerald E. McCormick
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