CEO NOW

Some of the contract signings from the baseball winter meetings in early December reinforce that the owners and players are operating in a financial stratosphere the rest of us could only reach with a winning Powerball lottery ticket. For the rest of us, inflationary pressure is a real concern.

Thankfully gas prices were dropping in early December, but higher food prices and rising utility bills add pressure. Most of the “regular public” felt the financial pinch of inflation in 2022 and have concerns about a recession as 2023 begins.

When it comes to sports at the youth levels there is a common belief they are recession or inflation proof. One where parents will make significant sacrifices so their kids can play the games they love. That was the feeling when the U.S. economy went into a recession 15 years ago.

There are a few differences this time around. We are still only three years removed from the start of the COVID-19 pandemic that forced kids off fields and courts for extended periods of time. There is an increased emphasis on much costlier travel, club and so-called “elite” competition and specialization at younger and younger ages where kids should be trying as many sports as they can.

What happens to kids whose families are wondering where they must draw the bottom line? Let’s look at baseball and ice hockey and the NSGA participation numbers in households with a yearly income of $100,000 or more. These are sports where the parents invest in costly equipment in addition to the fees to play. Ice hockey shows 46.5% and baseball 45.5% of participants from six-figure income families. More than half of the participants in those sports are from families facing greater financial constraints. As a sidenote, this emphasizes the need to support legislation like the Personal Health Investment Today (PHIT) bill, which offers some tax relief for these sports-related expenses.

Another sport which requires a significant investment is lacrosse with 54% of participants in the $100,000 and up family income bracket. It’s not surprising to see sports such as tennis (55.4%), golf (55.9%), ice/figure skating (56.6%) and alpine skiing (64.9%) above the 55% mark in the six-figure category. Will we see participation and purchases sustained in these activities because families making more than $100,000 were less affected by inflation?

Theoretically, those sports and activities supported by higher income families will be less affected. Likewise, those sports and activities which reflect lower family income participants may experience greater financial pressure. However it shakes out, my prediction is most price increases affecting sports equipment, apparel and shoe customers are here to stay, and most consumers reluctantly accept that new reality.

Most of the retailers and dealers we have talked with say they were having record years in 2022. Some of them also cautiously wonder how long this will last and they were already seeing some slowdowns in sales as the year ended. It forces retailers and dealers to carefully consider their local and regional environment and the sports and activities they sell. One answer does not apply to all situations.

CHAIRMAN OF THE BOARD

PAT DONNELLEY

BSN Sports, Twin Falls, ID

PAST CHAIRMAN

DAVID LABBE

Kittery Trading Post, Kittery, ME

BOARD OF DIRECTORS

KEVIN BEZANSON

Cleve’s Source for Sports, Halifax, Nova Scotia, Canada

BOB FAWLEY

Capitol Varsity Sports, Oxford, OH

TROY FREEMAN

Play It Again Sports, Minneapolis, MN

GORDON GEIGER

Geiger’s, Lakewood, OH

MICK MONTGOMERY

Denver Athletic Supply, Englewood, CO

RON RUGAL

B&R Sporting Goods, Shelby

Charter Township, MI

JOHN SCIPIO

SV Sports, Pottstown, PA

NSGA TEAM LEADERS

MATT CARLSON

President & CEO

MARTY MACIASZEK

Director, Team Dealer Division, Communications

JULIE PITTS

Director, Public Affairs and President, NSSRA

NICK RIGITANO

Director, Insights and Analysis

JENNIFER SHAFFER Comptroller

Best regards,

MATT CARLSON PRESIDENT & CEO

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