The verb demoralize describes the actions of someone or something that makes you feel bad or hopeless, like the horrible loss to the last-place team that seemed to demoralize everyone — from players to coaches to fans.
Demoralize can also mean what it looks like, "to remove the morals of." For example, parents worry that R-rated movies will demoralize their children. In order words, they fear kids will lose their sense of what's right and wrong if they see glamorous actors indulging in bad behavior.