Spinning local angles from the NBA lockout

By Flickr user Adam Pieniazek

Will the buzzer sound on the upcoming National Basketball Association season?  And if so, how much a blow – if any, according to some skeptics – will the lack of a winter’s worth of professional hoops be to the economy?

The first two weeks of play are to be canceled if no deal is reached by Monday, according to the AP, as the long-running dispute over the players’ share of revenue continues.  The National Football League settled similar differences in time to mount a full 2011-2012 season (Go Lions!) but right now it’s unclear if the NBA will manage the same.

And if they don’t?  One task for business reporters is to reconcile the pronouncements of economic doomsayers who contend the cancellation will cost billions with those who say ‘nah, no big deal.”

Marketwatch.com, for example, wrote on Wednesday that the teams alone would lose $1 billion, and conventional wisdom has it that local economies will suffer irreparable losses from the absence of any pro sports team season.  But increasingly, contrarians and skeptics are challenging that notion.  Check out this recent Slate piece, “No basketball, no problem: Why an NBA lockout wouldn’t be a disaster for local economies.”  Like similar articles, it quotes University of Alberta economist Brad Humphreys, who has studied the effects of sports work stoppages.  Humphreys contends that the economic contribution of sports teams is no big deal in the first place, and that canceling the seasons doesn’t reduce the income of the region significantly.

People will spend those entertainment dollars elsewhere, he says, and perhaps in places where the ripple effect of the spending will make its way into more local pockets rather than being absorbed by huge player salaries and the private coffers of team owners.  It’s an intriguing theory though I – no economist by any means – wonder if per capita income is the right metric for measuring sports impact in the first place.  He seems to think so and his theories are getting play; this Portland Tribune article “No NBA season? Businesses may be benched”  is a great template for a balanced local take.

I suspect the reality falls somewhere in between. Even if a regional economy as a whole will be unaffected but there is no denying that specific bars, restaurants, vendors, suppliers to concession operations, charter or other transportation services, maybe even lodging would feel a pinch.  If fewer hot dogs are needed in  your metro area this winter, how does that ripple out to processors, meat packers and others in the chain?  Less cheese for nachos or fewer paper cups?  Somebody was making a buck selling those items and chances are that a large sports arena was a valued customer and that those sales were part of this year’s business plan — so how would the hit be absorbed?  Cleaning services, maintenance, painters .. the list of small business people keeping the engine of a sports team going is huge and no doubt brimming with fodder for a detailed economic impact story.  (And being a skeptic, I’d be asking for last year’s purchase orders, receipts or other proof of the usual volume of business, rather than taking anyone’s word for the amount of sales they stand to lose…)

If your area doesn’t host a pro team, there are still bars, cable franchises (NBA Season Pass sales), merchandise sellers, eBayers trading in NBA collectibles and other ties.

And while your at it, how about taking a look at other levels of basketball play and how it affects your region?  Amateur leagues, sporting goods sales, coaches and camps, parking at college games and other spin-offs from collegiate hoops – angles abound.