BiggnightsThe NFL Lockout and its Effect on Small Businesses
March 25th 2011 00:05
The NFL Players Association has claimed that the lack of an NFL season in 2011 could cost each NFL city up to $160 million.
A year without football means a lot more than a few boring Sundays next fall. An NFL lockout could deliver a massive blow to many small businesses that rely on the league games for profit.
Countless restaurants, bars, and team apparel stores collect a huge portion of their earnings on Sunday afternoons each fall and could stand to lose a large percentage of their revenues. While basic economic principles may say that this disposable income will be spent elsewhere, it’s likely that many small businesses will be forced to close down without the NFL.
Consider a bar or restaurant only a few short miles from an NFL stadium. Every Sunday hundreds of fans come to enjoy a few overpriced drinks and sandwiches while watching the game. This happens in each of the 32 NFL cities and surrounding areas around the United States.
Let’s continue this exercise by assuming that on weekdays, these small businesses cater to a smaller and more conservative crowd. Imagine taking away the select Sundays that they rely on for as much as 10% of revenues in a single year. This could be a disastrous hit for the companies that are already facing difficulty paying the bills in this struggling economy.
Citing an article written by an owner of a small bar that appeared in the Huffington Post, NFL Sundays accounted for his business’ entire profits last year. $300,000 of his $3.5 million in revenue came from NFL game days. His profit was exactly that much, while football Sundays averaged 6 times more revenue that of non-football Sundays. The statistics are staggering and his entire earnings would be thrown out.
The NFL is no small company; it’s estimated to be a $9 billion a year industry. In comparison, imagine that Starbucks has a monopoly on the coffee market (before Starbucks decided to diversify their products). Now, the board of directors for Starbucks can’t come to an agreement with their employees on fair wages. The board of directors locks out its employees and ceases operations for a year.
Hundreds of thousands of Starbucks employees are without a job. It’s not only the front office executives, but also the cashiers and the coffee makers. Convenience and grocery stores that sell Starbucks coffee lose sales. The countries that import Starbucks coffee no longer have any demand for their product. On the other hand, the grip Starbucks has on the coffee market is gone; other coffee companies have the opportunity to penetrate the market in the United States.
In football, these “other coffee companies” would be other football leagues like the CFL and the UFL, or even non-football leagues like the NHL and NBA who could capture some NFL fans. However, there is no documentation to prove the fan base will cross over to other leagues. In any event, this does little to decrease the fear of the NFL cities about what a lockout could do to their economies.
More than small businesses are at stake here. As demonstrated by the Starbucks example, thousands of NFL employees will lose their jobs. Referees, stadium workers, and team employees will have no jobs in 2011. Cities that collect taxes on stadium concessions and parking to help pay for the stadiums will now be without that income for a year. The advertisers and TV stations for the NFL will need to find suitable replacements in a short period of time.
The NFL lockout is sure to have a huge impact on our economy, and small businesses in the effected cities may have to face the brunt of the force.
Whether you blame the owners for wanting to take an extra $1 billion for themselves off the league revenue or the players for not letting them have it, there are many people with a whole lot more to lose than these wealthy individuals.
-Statistics on small business taken from Really Long Link
A year without football means a lot more than a few boring Sundays next fall. An NFL lockout could deliver a massive blow to many small businesses that rely on the league games for profit.
Countless restaurants, bars, and team apparel stores collect a huge portion of their earnings on Sunday afternoons each fall and could stand to lose a large percentage of their revenues. While basic economic principles may say that this disposable income will be spent elsewhere, it’s likely that many small businesses will be forced to close down without the NFL.
Consider a bar or restaurant only a few short miles from an NFL stadium. Every Sunday hundreds of fans come to enjoy a few overpriced drinks and sandwiches while watching the game. This happens in each of the 32 NFL cities and surrounding areas around the United States.
Let’s continue this exercise by assuming that on weekdays, these small businesses cater to a smaller and more conservative crowd. Imagine taking away the select Sundays that they rely on for as much as 10% of revenues in a single year. This could be a disastrous hit for the companies that are already facing difficulty paying the bills in this struggling economy.
Citing an article written by an owner of a small bar that appeared in the Huffington Post, NFL Sundays accounted for his business’ entire profits last year. $300,000 of his $3.5 million in revenue came from NFL game days. His profit was exactly that much, while football Sundays averaged 6 times more revenue that of non-football Sundays. The statistics are staggering and his entire earnings would be thrown out.
Hundreds of thousands of Starbucks employees are without a job. It’s not only the front office executives, but also the cashiers and the coffee makers. Convenience and grocery stores that sell Starbucks coffee lose sales. The countries that import Starbucks coffee no longer have any demand for their product. On the other hand, the grip Starbucks has on the coffee market is gone; other coffee companies have the opportunity to penetrate the market in the United States.
In football, these “other coffee companies” would be other football leagues like the CFL and the UFL, or even non-football leagues like the NHL and NBA who could capture some NFL fans. However, there is no documentation to prove the fan base will cross over to other leagues. In any event, this does little to decrease the fear of the NFL cities about what a lockout could do to their economies.
More than small businesses are at stake here. As demonstrated by the Starbucks example, thousands of NFL employees will lose their jobs. Referees, stadium workers, and team employees will have no jobs in 2011. Cities that collect taxes on stadium concessions and parking to help pay for the stadiums will now be without that income for a year. The advertisers and TV stations for the NFL will need to find suitable replacements in a short period of time.
The NFL lockout is sure to have a huge impact on our economy, and small businesses in the effected cities may have to face the brunt of the force.
Whether you blame the owners for wanting to take an extra $1 billion for themselves off the league revenue or the players for not letting them have it, there are many people with a whole lot more to lose than these wealthy individuals.
-Statistics on small business taken from Really Long Link
| 24 |
| Vote |
Add To: 
subscribe to this blog