Are professional sports in trouble?

Today, Major League Baseball raised the curtains on its popular World Baseball Classic. The NBA is rolling toward its playoffs with as much exciting talent as it's had in two decades. Same for the NHL.

So what are sports business types buzzing about? A column by ESPN.com's Bill Simmons in which he reports that the NBA is seriously struggling financially, that an executive predicts 15 NHL franchises will "go under" next year, and that MLB is "about to get creamed beyond belief."

Simmons is well-sourced in the NBA, which he says will play franchise hot potato in the next few years, with struggling owners and lustful cities finding each other in 3-8 franchise moves. The SportsBusiness Journal recently reported that the league had secured $175 million in financing that will be made available to 15 teams, supplementing an existing $1.7 billion league-wide credit facility.

Bill King, an enterprise reporter who covers the economics of sports for the SportsBusiness Journal, doesn't share Simmons' sense of sports doom. But yes, he says, there's some significant struggling going on.

We caught up with King for some questions on the state of sports - and what it means to fans.

The Squeeze: How badly are sports leagues and franchises suffering financially right now?

King: Not as badly as the banking and auto industry. But just as badly as most any other storefront, particularly when you consider that the auto companies and banks have spent big on sports.

Sports teams typically make their money through five channels: tickets, TV and radio rights, sponsorship, merchandise and the leasing of premium seats, which are suites and club seats. Some of that is locked up long-term. Some is volatile. So, if you're in the middle of a deal, you're fine for now, but if you're trying to sell, you're struggling. The longer this lasts, the more those renewals will come into play and the more they'll struggle. So for sports properties, the issue is probably less about how bad it is and more about how long it will last.

If you're an NBA or NHL team, your season tickets and suites were renewed before the economy tanked in the fall, so it's the coming selling season that scares you. If you're a baseball or NFL team, you're already in the storm. Sports properties have fared relatively well in bad times in the past because people find a way to preserve the things they care deeply about, no matter how bad it gets. But that was when prices were lower and fans were paying out of their own pocket. Now, so much of the sports economy is driven by corporate spending that I think it's probably more at risk than ever. It's hard to spend the money to renew a suite or put your name on a golf tournament when you're laying people off.

The Squeeze: Give us a realistic worst-case scenario - multiple teams in different leagues declaring bankruptcy, perhaps folding?

King: I don't see it as quite as dire as Bill Simmons seems to, but I do think you might see franchises under pressure because the owner is bleeding money elsewhere and no longer can afford to absorb the cash losses of the team.

Right now, the model for many owners is this: If I buy a team for $150 mil, I can live with losing $5 mil or $10 mil a year, because I know I'll make it back with a profit when I sell it. And even if I'm holding onto it, it's appreciating in value, much like a home that you improve. That's all well and good until I no longer can afford those losses - particularly when they double because I can't sell sponsorships and my suites are empty. My partners won't give me any more money, the banks won't give me any more money, and I don't want to cover it with cash. Now, I'm a seller. Trouble is, there are few buyers in this economy and it's really hard to finance these deals now.

You'll have some very unhappy owners who want out but can't get there. Some might be willing to let the franchise bleed out and die. But, with so much revenue sharing in these leagues and such a large percentage of the pie coming from national TV contracts, I can't see the leagues letting it happen. You might see a team absorbed by a league for a period while it finds a buyer -- particularly in the NHL, where we've seen bankruptcies in recent memory. But shut the doors and default? I don't think so.

The Squeeze: Some cities remain very ready to take on a professional franchise - or more than than they currently have. Do you see an upcoming trend of cash-strapped owners leaping at good incentives - or selling to interested groups in those cities?

King: Ready, yes. Able? I'm not so sure. Have you seen the empty seats behind home plate in D.C.? The struggle to get an arena built in Brooklyn? The hotel vacancy rates in Vegas? Oklahoma City got in under the wire when it landed the Sonics. Kansas City built an arena and wants a team badly. But I don't see many cities putting public money into sports venues and sweetheart leases when they're slashing the school budget.

The Squeeze: Would the Charlotte Bobcats be one of those teams with owners looking to move?

King: I'm not an attorney or an accountant, but I can't see any way they could afford to get out of that lease.

The Squeeze: Let's make this about us - ticket prices are going to come down, right?

King: In the overwhelming majority of markets and sports, absolutely. I don't think many NFL teams will drop prices. Demand is too high. But in every other sport, you're already seeing it. If it's not an out and out price drop, it's a 2-for-1 ticket deal or a package that includes discounted
concessions. Several baseball teams are testing dollar menus this season.

The sun may soon be setting on that $8.50 Sam Adams. Let's hope so, anyway.