NBA Lockout Has Major Impact on Local Economies

Written by: Daniel Krishan/@Krishan_Mamba24

Two years of negotiating has produced no positive results or a form of mutual agreement between the owners and the players; so the NBA players are prepared to take this battle to the courtroom. The NBA players’ association rejected the leagues proposal for a new labor deal on Monday and prepared to disband, which will prepare a lawsuit that will put the whole season into a state of emergency.

The NBA is coming off the back of its most successful season with television ratings and game attendances at an all-time high, so to have the situation evolve into something that will more than likely poison fans against the league creates economic problems that will be more of a concern than what facts and figures are being dueled over on the bargaining table.

The lockout will do some damage economically to an American economy which is already unstable. On a micro scale people who rely on the NBA for revenue and employment such as concession stand operators, ticket takers, vendors, arena staff and security guards will be out of a job; at a time when low-skilled blue collar workers are having huge trouble finding employment. Restaurants and bars in the vicinity of arenas will also take a big hit financially. The effects that will come of this lockout are real and should not be ostracized.

Without a doubt sporting events produce ample if often excessive, amounts of game-day spending
in cities across the USA and Canada. According to the Oklahoma City Chamber of Commerce, for
example; every Thunder game pouts $1.3 million into the local economy, and considering the fact that
41 games are played at home in the regular season, that is a substantial amount.

The Portland Trail Blazers made a $2 billion local impact in the years between 1970-2004, and in 2010 the Greater Memphis Chamber of Commerce estimated that the Grizzlies and their home stadium, The FedEx Forum, generate an annual economic impact in the area around the region of $223 million.

It is pretty clear that all local economies will be hit hard. Sacramento officials estimate that its NBA arena employs about 700 workers, including 550 part-time employees. For Sacramento, the work stoppage couldn’t have come at a worse time, with the city trying to move forward on a proposal for a new arena.
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This raises the question of how much of a financial impact the lockout will have on Los Angeles. There was a claim that with the Lakers losing in the earlier stages of the playoffs in 2011 it cost the Los Angeles economy $70 million. In the shadow of Staples Center, restaurants and bars are empty, taxis are idle, and parking attendants have little to do. There’s no basketball which means there’s no business.

With the Staples Center not just acting as a basketball arena but a multipurpose center means that other events, such as concerts, can be added in to gain revenue to cover some of the loss of not having basketball games. Ultimately this is not a sustainable substitute. Overall, those effected in the L.A. economy will be the small business owners that rely on the big name brand and appeal of the Los Angeles Lakers to gain a wage and support itself.

The main economic effect here is that jobs and means of support are at stake because of the NBA lockout. However, in cities other than Los Angeles where the local NBA franchise is the only major sports team, the picture is even more desolate. Of the 30 franchises in the NBA, only seven play in NBA-only markets; these teams include Oklahoma City, Portland, Orlando, San Antonio, Utah, Sacramento and Memphis.

Data that has been gathered by Forbes indicated that the 23 NBA franchises in markets with more than one major-league sports team lost an accumulative $11 million in total value between 2009 and 2010. What about the seven only NBA based markets? They witnessed a combined $64 million spike in value throughout the same time period, with six of the seven amassing or maintaining their 2009 values. This is yet another indication that the NBA franchises bring much needed boosts to their local economies.

Now, if Los Angeles loses the Lakers for a year, you won’t see the economy crumble. It’s probably true of other bigger cities such as New York or Miami as well. But apart from the predicament of arena workers, bar-keepers, and team employees, if economies lose all that opportunity for growth, isn’t that a pretty important loss overall?

The overall losses to all general areas will be minimal, but if you get into those communities where the NBA franchise dominated that’s where you’re going to get the ultimate feeling of upset and neglected people, as well as the biggest economic impact.

Overall the lack of a Kobe Bryant buzzer beater may hurt Los Angeles deeply inside, but it will not be the economical downfall of the greater Los Angeles area. However, the lack of a Kevin Durant three-pointer in Oklahoma City, that’s a different story.

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