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VOL. 35 | NO. 14 | Friday, April 8, 2011

Locked out?

Millions at stake as NFL cities face work stoppage, loss of revenue

By Terry McCormick

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It’s easy to dismiss the NFL lockout as billionaire owners vs. millionaire players. What’s more difficult is having sympathy for either side.

But even if you don’t care which side wins – or even follow football, for that matter – the strike would have a very real affect on NFL cities, including Nashville.

A study commissioned by the National Football League Players Association estimates each missed game will cost host cities between $12 million and $40 million. An NFL spokesman called the estimate a “fairy tale.”

Former Titan Kevin Mawae, president of the NFLPA, says is no doubt large numbers of workers who depend on football in a secondary manner will be affected. That, in turn, will adversely affect local and national economies still recovering from the Great Recession.

“In one survey, it said that each game lost would cost each NFL city approximately $1.4 million. So that means that the city of Nashville would be without $1.4 million times eight games if the entire season was lost,” Mawae explains.

“That goes beyond just the players and owners. That is overtime paid to policemen for security and traffic, concessionaires, plus with the 65,000 or so people coming into town for each game, the money that hotels, bars and restaurants would make before and after each game would be lost as well.”

The Nashville Area Chamber of Commerce is bracing for the possibilities of the negative impact a lockout could bring if it lingers into the season.

“The presence of professional sports is a vital economic advantage to any city,” says Ralph Schulz, president of the Nashville Area Chamber of Commerce. “The short-term impact of lost games affects jobs and exposure by national media. In the long term, professional sports enhance a city’s quality of life and image, helping to attract work force and jobs to the area.”

David Penn, associate professor of economics at Middle Tennessee State University, sees a major ripple effect in lost income.

“When we don’t have a Titans game, you are in essence removing a stream of spending that would have supported those that sell drinks and snacks, ticket takers, security, and those that maintain the stadium. It affects a lot of people other than players and coaches,” Penn says.

Perhaps the biggest economic impact goes beyond the stadium. While many ticket takers or concession workers may be doing so on a contract or even part-time basis, local restaurants, hotels and bars could be most adversely affected, missing out on pre- and post-game business generated from a home game at LP Field. No game means empty hotel rooms, vacant tables at restaurants and bars, and money lost to those businesses that normally would thrive through sales to the Titans pre- and post-game throngs.

Fall is his busiest time of the year, and a fall without football on the TV screens will hurt business, says Mike Hamlin, who owns Pirahna’s Bar and Grill and co-owns Buffalo Billiards with Charlie and Nancy Manis. Both businesses are on Second Avenue

“It’s huge. I can’t tell you exact numbers, but football season, and that’s all of football, including Saturdays with college football, that’s the busiest time of year for how I do business. I’m a sports bar,” Hamlin explains.

Penn agrees.

“I think around Second Avenue, those folks will definitely feel a pinch. Hotels, motels and things like that, the closer you get to the stadium, the bigger the impact,” he explains.

“With the hotels, it’s going to go out farther, and with restaurants, it’s hard to say. Do they park the car and walk over to Second Avenue? Some may get something to eat on the way there. There will be impacts further away from the stadium, but I have to think that most of the impact will be pretty close around.”

And while money not spent on a Sunday afternoon (or Monday night) of football might be redirected elsewhere – movie theaters, for example – some of that money will not be spent at all, adversely affecting tax collections.

“Offsetting that, you have to think about what people would be spending their money on if they’re not going to a Titans game,” Penn says. “Those folks would definitely be impacted. Some other types of entertainment might see a small increase or maybe that is simply money that is not spent.

“But if you’re talking about Nashville in particular, the net impact is probably just the number of people that come from out of town. The impact is that if they weren’t going to a Titans game, then they’re probably not coming into town for something else. They would either stay at home or go fishing or something.”

Another key business segment is merchandising, and few fans are going to need new jerseys and hats showing support for a team that isn’t playing.

“We still have people coming in asking for merchandise, but we haven’t purchased anything going forward into the 2011 season because of the potential of the lockout,” says Raymond Cain, manager of the Sport Seasons store in Rivergate.

“The people want it, but we’re just scared to make the purchase right now because we don’t want to be left holding a bunch of merchandise if there is no season. It’s affecting us business-wise, because we don’t want to jump to getting it and them not play.”

Cain says Sport Seasons made the decision not to pre-order any new items once it became apparent that the lockout was a real possibility.

“We know there won’t be any issues if they decide to end the lockout on say Sept. 6, we know they could go ahead and get our stuff to us quickly,” he adds.

City officials are well aware of the impact of lost games on Nashville this fall.

“Titans games clearly have a tremendous positive economic impact on our city in terms of providing jobs and generating spending in our downtown area,” Mayor Karl Dean’s office has stated. “Just like the two parties involved, we’d like to see the deal close and avoid any situation that would result in canceled games.

“We are following this with great interest. The city has a good working relationship with the Titans, and they are keeping us informed.”

While the Titans and the NFL have been instructed to stay away from most comments regarding the lockout, the Titans are hopeful that this “what-if” scenario is resolved long before any loss of games comes to pass.

“We are hopeful that something will work get worked out before it gets to that point,” the team said in a statement.

Hamlin is hopeful the stoppage can be averted as well, believing there is still time for a deal to be reached that would save the entire 2011 season.

“It’s such a long way off, and from the people I know that actually work for the Titans organization and other sources, nobody knows,” he says. “I would think, here we are in April, you’ve got almost five months for them to work out what they’ve got to work out.”

Right now, that might be wishful thinking on some level, as even owner Bud Adams, who guaranteed last week that the 2011 season would be played, indicated in a letter sent last month to season ticket holders that the possibility of canceled games does exist.

For now, Hamlin and other businesses potentially impacted will simply wait and see.

“If it happens, then we’ll just do the same things we’re doing right now,” he explains. “We’ll just try to capitalize on the good weather weekends, because as long as weather is nice, downtown is always busy. We don’t have football now, and the weekends are pretty good.

“For the last 11 years, on Second Avenue, we’ve experienced everything from floods to the streets exploding to worries about late-night crime. There’s always some obstacle, so I’m just worried about today and trying to have the best day in sales today that I can have.”

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TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0