State and community governments can''t print their own money and usually have to live with balanced budgets. Tax bases are dropping and voters probably are unlikely to add new taxes. So things will give. Road repairs, public services like fire and police ... schools.
Several schools have started eliminating non-academic programs with some sports programs evaporating entirely - an example is the East San Jose district. I've noticed that some of the companies that have sponsored kids teams are doing poorly. From the local Dairy Queen to the Chevrolet dealership there are firms that are struggling and evaporating entirely. The $250 to $5000 checks are going away. A sign of the times.
At the corporate level we seem to be on the verge of a major shift in NASCAR's fortunes. Major sponsors like the Big Three are unlikely to continue support and smaller sponsors ($20M is a small "major" sponsor) are having problems. With softening consumer spending I wonder how people value a few square feet on a car these days? Does it really make a difference to a sponsor's bottom line? I've read that the other major sports - basketball, football and baseball - consider themselves immune to recessions. My guess is they probably need to do some recalculating in the next few months.
There are undoubtedly businesses where some linkage to an athlete can be important, but the nature of advertising is changing. Are some of the smaller sports that appeal to teens and twenty somethings showing the way? Sponsorships are relatively inexpensive and connections with the fanbase is much more direct and often bidirectional.
I wonder about the sport where a
friend is a pro player - beach volleyball. It was amazingly popular at the 2008 Beijing Olympics and was rated fourth among sports for the US audience. The top athletes on the pro tour do well, but not much by the standards of sport. Very good players have been supported by car dealerships, real estate development companies and other local firms. They have a lot of challenges, but the "minor" sports still offer great competition and may be great values to a class of sponsor. In the case of beach volleyball the cost per square inch of space may be high, but other forms of connection can work well too. But I suspect most of the players will be working part time jobs.
Like everything else these days, the message is probably "stay tuned and be prepared for change"