NEW YORK (Reuters) - The $4 billion NBA basketball league looks to be barreling toward a lockout -- adding to the woes of the restaurants, parking attendants and city governments that count on its games for income.
Last-ditch talks with the league’s owners collapsed on Thursday, according to the players’ union, with the two sides far apart on issues ranging from salaries to revenue sharing. The expiration of their current agreement is just hours away.
The costs of a lockout could be enormous, particularly if the entire season were lost. In that case, the league’s most valuable franchises, including the New York Knicks and Los Angeles Lakers, stand to lose more than $200 million each in revenue, according to estimates by Forbes.
Beyond owners and players, however, a lockout would be no less painful to countless restaurants, bars, and retail stores that depend on the NBA for foot traffic and sales. Many are only beginning to recover from the recession.
“Just about everyone associated with the NBA would be affected one way or another,” said Neal Pilson, former president of CBS Sports and now head of his own sports consulting firm.
“After players and ownership, there is certainly a trickle down impact of some magnitude for the TV networks, the advertisers, the regional sports channels, the sponsors, the arena, the people who work in the building, local restaurants,” he said. “It’s just a huge impact.”
Even city and local governments -- many of which are already under financial strain -- would feel the sting of a work stoppage since they collect taxes on sales of tickets, food and even Nike Inc’s Air Max Lebron 8 sneakers.
In Chicago, the Bulls games generate about $173,000 a game in city and county taxes from ticket sales alone, estimated Marc Ganis, president of sports consulting firm Sportscorp Ltd. Add in taxes from parking and concessions, he said, and the losses amount to $250,000 to $300,000 each game.
Then there is mass transit, since in urban areas fans often take subways or busses to the games, and the arenas that host the games.
“Arenas can’t rebook those dates, because they wouldn’t know games will start again and most acts have to be well in advance,” said Ganis. “Plus, the anchor tenant teams get the best dates, primarily weekends, and those are lost opportunities to arenas.”
For the NBA and the businesses that depend on it, labor troubles come at a time when the league should be basking in the afterglow of a season when attendance and TV ratings rose.
Time Warner Inc’s TNT put up its best NBA playoff ratings ever this season, while Walt Disney Co’s ABC network broadcast of the Dallas Mavericks’ win over the Miami Heat in Game 6 of the NBA Finals was the highest Game 6 rating since 2000.
“TV networks and marketers are in a difficult position because they cannot control the talks,” said Brad Adgate, an analyst at advertising firm Horizon Media. “For them it’s frustrating that they invested hundreds of million in rights fees and they have to stand by like the fans.”
Analysts said TNT along with Disney’s ABC and ESPN -- the national networks that carry the NBA games -- would try to offer NBA advertisers substitute programing, either sports or scripted shows aimed at a similar demographic.
The regional sports networks that carry NBA games, such as the YES Network in the New York area, would have less flexibility and a tougher time finding alternate programing.
“They have access to local college sports, they would run repeats, but obviously they would not run programing as attractive as the NBA,” said Pilson.
Pilson said that would place the regional sports networks squarely among the biggest losers in the event that the NBA cancels games or the season.
“There aren’t a lot of winners here,” he said.
Reporting by Paul Thomasch; Editing by Tim Dobbyn