Domino Effects

Don’t take my thoughts as a prediction, far from it, but thoughts of domino effects have been racing through my head as the U.S. economy retrenches. Without another good ole fashioned bubble on the horizon, without another dot-com frenzy to make the mass believe that they too can get rich overnight, without another “house for everyone” blue light special, how does the economy go from retrenching to growth? Consider a simple domino effect from ESPN.com about NBA basketball teams and their potentially shrinking revenue:

Chris Tomasson and Aaron Lopez were among the best newswriters covering the NBA, and both are off the beat now that the Rocky Mountain News has gone out of business. As a result the surviving Denver Post — no longer in a newspaper war — will be under less pressure to come up with every last bit of news about the hometown Nuggets. In all kinds of ways there has been an erosion in coverage of the teams in Denver and other cities, and that will ultimately hurt the NBA. NBA owners who may question the value of newspaper coverage are going to begin seeing negative trends. The effects will be felt as newspapers cut back on coverage or go out of business altogether. Layers of media interest in the NBA — from bloggers, from talk radio — is built on daily information gathered from local beat writers at newspapers. What happens when those writers stop traveling with the team or vanish altogether? Some franchises may try to provide news coverage via their own franchise Web sites. But how many of them will tell you what you really want to know? If the star player disagrees with the coach or the team is preparing to make a major trade, is the franchise going to release this information? Less interesting coverage of the NBA will lead to less interest.

I don’t know if this will happen, but it sure seems plausible. And of course with newspapers it is not just the bad economy, but the internet that is pushing their demise. How many different dominoes are falling that will have effects for years to come:

1. Big investment banks gone.
2. Circuity City and many other retailers gone.
3. Real estate dead in many areas.

How many different dominoes spring from only those three?

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One thought on “Domino Effects

  1. Michael, guess what, NBA teams and all huge salaries and revenues are also aa big bubble that will burst someday. Maybe it was just a byproduct, maybe it has a life of its own, let’s see! My take is that it is already bursting.

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