Even Without the NFL in L.A., Business of Sports Is Thriving

Sports in Southern California has grown into a billion-dollar industry, thriving despite the absence of professional football, according to a recent study.

With the new venues of Staples Center and California Speedway as catalysts, full-time employment in the industry increased 12% from 1996, attendance increased 24% and revenues increased 31%, a team of graduate students from UCLA’s Anderson School of Management reported this week in a study commissioned by the Los Angeles Sports Council and the Los Angeles Area Chamber of Commerce.

“You can’t compare this to the tourism industry or the entertainment industry,” Sports Council President David Simon said. “But it’s a sizable industry, and the numbers are bigger than people think about.”

The film industry generated $31 billion in revenue last year, $1.2 billion at MGM Studios alone, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corporation.

The sports study reported $1.05 billion in revenue and 2,949 full-time employees. By comparison, In-N-Out Burger has 3,988 full-time employees, Kyser said.

The study accounted for local pro and college teams, horse racing and annual events such as the Rose Bowl, Los Angeles Marathon and Long Beach Grand Prix, with total attendance of 21 million last year. Even after the Rams’ and Raiders’ departure in 1995, sports industry revenues are up more than one-third from the $762 million reported in 1993, the study said.

With pro sports accounting for two of every three dollars in local industry revenue, the increase can largely be attributed to higher payments for broadcast-TV rights and rising ticket prices at new and renovated facilities, among them Staples Center, Dodger Stadium, Edison Field and the Arrowhead Pond. But with fans showing resistance to ever-higher ticket prices and ratings declining for sports television, the local sports industry could soon approach a revenue plateau.

An NFL team in Los Angeles would account for at least another $100 million in annual revenue but the study appears to reinforce the oft-repeated sentiment that the NFL needs Los Angeles more than the city needs the league.

“The demand for the NFL product in Los Angeles is minimal,” said David Carter, who teaches sports business at USC. “We’ve got a very vibrant sports community with plenty of alternatives.

“We’ll be OK without the NFL. It’s not a part of our identity, as it is in Green Bay.”

Alternatives such as minor league baseball and women’s basketball have emerged as success stories during the absence of the NFL, and analysts suggested an NFL team in Los Angeles might erode the season-ticket base of the Kings or Clippers but would not harm such teams as the Sparks or Rancho Cucamonga Quakes. The average NFL ticket last season cost $48.97, comparable to the $51.27 of the NBA and the $47.70 of the NHL, according to Team Marketing Report.

The Quakes, a Class A baseball team, drew 312,333 last season--an average of 4,462--and have led the California League in attendance in each of their eight seasons. According to the team’s Web site, the cheapest ticket to a Quake game is $5.

“We are a niche,” Rancho Cucamonga General Manager Pat Filippone said. “A certain segment of the population feels scorned by major league sports because of the price increases.”

As president of an organization founded to lure sporting events to Southern California, Simon was not about to thumb his nose at the NFL.

“On the one hand, sports are thriving here without the NFL,” he said. “But that’s not to say that, if you put an NFL team here, it wouldn’t be very successful. I don’t believe the market is saturated.”