When the NBA’s current collective bargaining agreement ended on June 30, it set off the first work stoppage in the league since 1998. That lockout shortened the 1999 season to 50 games.
The 2011 lockout has already caused the cancellation of the entire NBA preseason as well as the first two weeks of games. Thousands of people working NBA — including security, parking lot attendants, concession workers, ushers, restaurant employees, cheerleaders and others – will have their hours cut or be laid off as more games disappear from the schedule.
In Indianapolis, the cancellation has already taken out three Indiana Pacers’ home games. The fans will be entitled to full refunds on their tickets at the Conseco Fieldhouse, but businesses in downtown Indianapolis stand to lose millions of dollars in revenue.
“That’s 10,000 to 15,000 people downtown, 50 times a year, so that’s a fair chunk of people coming downtown, having a good time, spending their money in restaurants and bars and just kind of congregating together,” said Indianapolis Mayor Greg Ballard. “It’s gonna have some impact. I am concerned,”
Ballard told NBC affiliate WTHR that the Pacers account for nearly 900 direct jobs and brings in $55 million a year, mainly in the hospitality industry.
“What I am mostly concerned about are the hospitality workers. Waiters, waitresses, cab drivers,” said Ballard.
Compounding matters in Indianapolis: the city is in the midst of preparing to host Super Bowl XLVI in February. The streets and sidewalks are being renovated for the Super Bowl and are hurting the restaurants and bars that are already downtown.
“We are going to take a big hit,” said local bar owner Gordon Coke, who has had to let go of six employees already. “You look forward to making up for your slow months when the Pacers come in. We are going to lose 30 to 40 percent of our money for the months they are not playing.”
The NBA is hoping to avoid what happened to Major League Baseball in 1994 — where an August work stoppage caused the only cancellation of the World Series in MLB history — and the NHL in 2005, where the entire season was canceled. The NFL averted disaster this past summer by settling their labor issues and starting the season on time with just a single preseason game being canceled.
Cities such as New York, Boston, Detroit, and Chicago stand to not take as great of a hit due to other sports and events at their host venues providing job opportunities for event staff. In smaller NBA cities such as Orlando, Memphis, Oklahoma City, Salt Lake City, Portland, and Cleveland, the effects on the businesses could be devastating. Cleveland, in particular, is in huge trouble.
The Gateway District — which includes five hotels, 48 restaurants, Progressive Field (home of the Cleveland Indians), and the Quicken Loans Arena — is the epicenter of downtown Cleveland, a city with one of the highest unemployment rates in the country.
From 2003 to 2010, Cavs’ home games were the biggest ticket in the state of Ohio, with consistent business pouring through downtown and the team, led by LeBron James, often playing deep into the spring during the NBA Playoffs. That all changed with James’ nationally televised defection to the Miami Heat in July 2010.
While the Cavaliers’ home games were all sold out last season — fans bought up season tickets in anticipation of James’ re-signing with the team — the crowds petered out and nearby businesses took the hit. It didn’t help that the Cavaliers crash landed on the court, finishing an Eastern Conference-worst 19-63, including an NBA-record 26-game losing streak that lasted from Dec. 5, 2010 to Feb. 11, 2011.
“Even if there is a season, I think we’re going to take a hit,” said Caitlin Cassidy, the manager at the Harry Buffalo, which is across the street from Quicken Loans Arena. “People love the Cavs, but they love the Cavs more when they’re winning.”
On typical Cavs’ game nights the last few years, the wait for a table at the Buffalo has been at least 30 to 45 minutes. Cassidy told the Associated Press that people who had season tickets didn’t come most of the time last year, which really hurt business.
“They come down and watch the Cavs and drink beer and hang out, but it’s definitely not been the same without LeBron.”
The reality is beginning to sink in to many business owners that if a labor deal is not reached soon, they will have lay off workers. Billy Hunter, the head of the NBA Players Association, is set to meet with Stern next Monday in Los Angeles with the hopes of striking some kind of deal.
“I’ve got three single moms on my wait staff and two single dads in the kitchen,” said Harry Buffalo operations manager John Adams. “I’ve got their 11 children to think about. It’s painful when it’s out of my control, when I have to put the business first and say I can’t have 15 servers on staff because we don’t have the business.”
The players stand to lose money as the games disappear, but they have other options, whether it is endorsement deals, appearances, or playing games overseas. Veteran players Tony Parker (Italy), Deron Williams (Turkey), Kenyon Martin (China), Andrei Kirilenko (Russia), Mehmet Okur (Turkey) and others have signed incentive-laden contracts to play for teams overseas during the lockout.
Veteran superstars such as Kobe Bryant — who reportedly has been offered $2 million to play one game in Italy — are also being courted to play overseas. Meanwhile, there are thousands of people whose livelihoods hinge on whether the NBA lockout ends soon, if at all.
“Yeah, financially, I’m worried,” said Buffalo waitress Jeannette Lauersdorf, a single mother of two “We’ve got bills to pay.