Boxing: Warning sound of America's bursting bubble

Shortly before heading east from Las Vegas after watching Lennox Lewis demolish Hasim Rahman to regain two versions of the heavyweight championship, I fell into conversation with some other grizzled veterans of this dubious trade about developments in American sport which may or may not be significant but carry a warning for authorities on this side of the Atlantic.

We were talking about evidence of a decline in sports interest that was apparent before the awful events of 11 September caused many Americans and people elsewhere to decide that the watching of games is of no great importance.

The word is that a number of franchises across the broad spectrum of American sport are experiencing serious financial problems because of bloated payrolls and a growing resistance to ticket prices. Think about that. Where before have you heard it said that the average supporter today matters a great deal less than television money and the proceeds from corporate privilege? Anyway, the feeling grows that a golden age in American sport, by which I mean an age when there was a flood of money, and investors fell over themselves to get a piece of the action, may be over.

Bill Reynolds of the Providence Journal sees sections of empty seats at basketball games in Atlanta, Charlotte and Cleveland as proof of waning interest. He points out that the recent baseball play-offs failed to draw a full house in Atlanta,Houston and Arizona; that the attendance at last week's ice hockey match between the Boston Bruins and Montreal Canadiens, once a hot ticket, fell way short of expectations and many of the hospitality boxes in Boston's new Fleet Center have not been sold.

No longer able the fill the ballpark they opened six years ago, baseball's Cleveland Indians are reducing their payroll by 20 per cent. According to the Cox News Service, four primary sponsors have pulled out of golf's PGA Tour and the LPGA Tour has cut six events from its schedule. More than 10 leading NASCAR Winston Cup motor-racing teams have not found sponsors for the 2002 season.

Having built its financial model on television money – Fox, ABC, CBS and ESPN will contribute a combined $2.1bn this year and $2.47bn next year, deals that were overpriced when they were made in 1998 – the National Football League may soon hear the networks asking for relief.

Even after cutting costs in equipment and travel, Fox has not been able to achieve the enormous savings it needs. Recently, Fox slashed its payments to the boxing promoters America Presents, who are involved with Mike Tyson.

Talk of contraction in Major League Baseball adds to fears for the future of America's sports economy. Even before the terrorist attacks, attendances were down. TV ratings were down. Sales of hospitality boxes were down.

"You hear one thing, then another,'' one of my companions said, "but it's pretty clear to me that sport is on a downturn.'' He is not alone in thinking that sport in the United States is overpriced and that the average fan no longer counts at major-league level. What counts is television money, corporate money.

And when that money starts to get tight? Rick Landau, a former Brown University basketball captain who spent 24 years as an investment banker on Wall Street, says: "It's the same thing that happened with the stock market. Companies kept getting higher prices without any earnings because everyone said it was a new economy. Now, all of a sudden, the economy isn't new anymore.''

Shocked by the proposed contraction in baseball, people with a long experience of American sport can no longer be sure about where it is heading. Too many teams, too many leagues, translating into too many bad games, a glut in the marketplace and the challenge of entertainment options. My friend Pat Putnam, formerly of Sports Illustrated, says: "There are guys pulling huge salaries in baseball who once wouldn't have made it up from the minor leagues. When we had only 16 teams, 400 players formed an élite group, the crème de la crème. Now, as the result of expansion, there are more than a thousand players out there. When Billy Bonds of the San Francisco Giants recently set a new seasonal home run record he was often hitting against minor-league pitching.''

Reynolds adds: "Maybe it was easy to think the sports goose was going to keep laying golden eggs. Maybe easy to think that corporate America would continue to propel sport, even if the average fan had been economically phased out long ago. Easy to think sport was a bubble that was never going to burst. Not now.''

If some of this has a familiar ring, think closer to home. Coupled with the thought that American trends frequently find their way across the Atlantic what if, after all, the domino theory is correct?