NBA Lockout Hurts Businesses

A restaurant near the Minnesota Timberwolves' arena has scaled back hiring busboys and cooks. A Salt Lake City sports store finds little demand for Utah Jazz shirts and hats. Cable TV networks are preparing to run action movies and classic NBA games instead of the real thing.

The economic fallout from the NBA's vanishing season is already being felt a week before the league misses its first regular season game due to the lockout.


Related Links

Audio: David Stern says ...

  • He wants to work with players
  • The season can be saved

    Spy: Players' unity paying off

    Lockout timeline

    Kahn: Lockout drains rosters

    Alesia: Jordan can save NBA

    Forum: When will the season start?

  • NBA was supposed to open its season Tuesday, but instead has canceled its first four weeks -- 194 games in all -- due to the labor impasse. The earliest the season might begin now is Dec. 1.

    The league and its 29 teams had expected to generate nearly $2 billion in revenue this year through sales of tickets, arena suites, broadcast rights and advertising signs and its share of an estimated $3 billion-plus in licensed merchandise sales worldwide.

    The canceled games -- and the possibility of a lost season -- could exact a toll in the hundreds of millions of dollars from local economies.

    The Charlotte Hornets pump close to $100 million a year into the city economy, estimates John Connaughton, an economics professor at the University of North Carolina at Charlotte.

    Cleveland's tourism boss said Cavaliers home games each generate $1.9 million in restaurant, hotel, bar and souvenir business. NBA teams each play 41 regular season games at home and more if they make the playoffs.

    In Chicago, where the Bulls have won six NBA titles and feature the game's best-known player in Michael Jordan, Chamber of Commerce executives estimate each home game generates $8 million in local spending outide the arena.

    Skeptics say such estimates are overblown.

    "People find other things to do," said Allen Sanderson, a sports economist at the University of Chicago. "If the Bulls were not here, people would spend the same amount of time drinking beer and going to the movies as they would have on the Bulls."

    Nonetheless, lost games will directly affect people's lives.

    Arenas won't hire as many security guards or popcorn vendors, nearby restaurants won't get the big game-night crowds, and sports bars without compelling alternatives on their big TV screens may lose customers.

    The Charlotte Coliseum authority, which manages the Hornets' home arena, has stopped hiring and frozen the salaries of its 200 full-time workers in anticipation of the potential loss of 41 or more of its 120 scheduled events for the next year.

    Only a block from the Target Center in Minneapolis, manager Tom Matoushek of The Loon Cafe plans to use seven or eight fewer busboys, cooks and other workers than the 18 or 19 he would normally have on Timberwolves' game nights when the place would be packed two hours before tipoff.

    Industry insiders said there has been a 50 percent cut in licensed merchandise orders from retailers since the lockout began in July.

    "It's always who's hot, and right now nobody's hot, nobody's playing ball, so nobody's buying," said assistant manager Sean Estes at Galyan's Trading Co. store in Carmel near Indianapolis.

    Will Ferguson, manager of the Fan-A-Mania store in the ZCMI Center mall in Salt Lake City, said last week he hasn't sold a single Jazz-related item for two weeks. "We have a lot of tourists that come in and they're not even buying. They usually do," he said.

    At cable channels TBS and TNT, movies like "Rain Man" and "The Delta Force" from the Turner film library are being scheduled to replace canceled NBA games. Network executives said advertisers are sitting tight, hopeful that games can be added to the TV schedule once the season starts.

    Some regional sports networks are planning to run classic NBA games once a week until the season starts.

    NBC has the broadcast rights to NBA games, but its first NBA telecast isn't scheduled until Christmas Day, with others starting in mid-January.

    Advertisers are sticking with their marketing plans in hopes the labor problems will be resolved soon.

    Coca-Cola, for instance, has an NBA-related promotion for Sprite offering $25,000 top prizes that are billed as roughly the average daily NBA salary. Sprite ads feature Grant Hill of the Detroit Pistons and Kobe Bryant of the Los Angeles Lakers irreverently advising how to spend the money. "It works fine for us in spite of the labor situation," said Coke spokesman Scott Jacobson.

    Sneaker marketers are pushing ahead with new basketball shoes tied to NBA stars. Adidas Americas is bringing out its second model endorsed by Bryant, Reebok introduced its tird signature shoe for Allen Iverson of the Philadelphia 76ers, and Nike is introducing its 14th Air Jordan.

    "The game is quite alive despite the lack of NBA games," said Nike spokesperson Vizhier Mooney.

    The Topps Co. is warier. It cut its preseason NBA card series to two, compared with four last year. Topps spokesman Marty Appel said recent baseball and hockey strikes showed "you need having the players out there promoting the cards by competing" to avoid getting stuck with returns.

    © 1998 SportsLine USA, Inc. All rights reserved