NFL lockout: big blow to small firms
NFL lockout could mean millions of dollars of lost sales. Restaurants, team apparel stores could see the biggest impact of an NFL lockout.
Pam Kauth, an employee of the Boston Store located inside Regency Mall in Racine, Wis., puts out new Green Bay Packer NFC Champion short-sleeve T-shirts on display on Jan. 24, 2011. If an NFL lockout does occur, many football-dependent small businesses will see big drops in sales.
Scott Anderson/Journal Times/AP/File
It’s a battle between billionaires and millionaires – but the National Football League (NFL) labor negotiations have more riding on them than just who gets a bigger piece of the pie.
The livelihoods of thousands of small business owners and their employees are at stake in each of the NFL’s 32 cities.
Restaurants, bars, team apparel stores and other small businesses located within walking distance of NFL stadiums are bracing themselves for a potential lockout and the ramifications it may have.
With the Green Bay Packers fresh off a Super Bowl victory, Jerry Watson, owner of the Stadium View Bar and Grille – just yards from Lambeau Field in Green Bay, Wis. – said he has been expecting large crowds next season, which could result in as much as 20 percent increase in business.
An NFL work stoppage, he fears, would turn what could be the biggest year in Stadium View’s history into one of the worst.
“It would knock out about a third of my business,” Watson said. “It would hurt quite a bit.”
Canceled NFL games also would mean the loss of about 100 jobs at the Stadium View. On a Packers game day, Watson has about 120 employees working, as opposed to only 20 on a regular Sunday.
The NFL’s current collective bargaining agreement expires March 4. The main issue on the table is how to split the estimated $9 billion in revenue the NFL generates each year.
Without an agreement, NFL owners have the option of locking out the players and forcing a work stoppage until a deal is reached. The NFL has not had a work stoppage due to labor issues since 1987, when one game was cancelled and three other games saw replacement players take the field.
In conjunction with the NFL Players Association, Edgeworth Economics conducted a study last year that estimated a loss of $20 million in spending for each game not played. That number includes salaries paid to anyone associated with the game — including players, stadium workers, front office staff and all associated businesses that earn money when a game goes on, such as local hotels, restaurants and other small businesses.
As a former general manager of the Philadelphia Eagles, Susan Spencer saw firsthand how destructive an NFL work stoppage can be for the businesses located in and around NFL stadiums when players went on strike for 57 days in 1982.
Spencer estimates that 10 percent of the small businesses around Veterans Stadium in Philadelphia closed their doors during or after that strike, which canceled seven games of the 16-game season.
“It had wide ramifications,” Spencer told BusinessNewsDaily. “A lot of little businesses went out of business because they just could not sustain themselves.”
Located just steps from Qwest Field in Seattle, the Seahawks Den – which sells Seahawks jerseys, T-shirts, hats and other team paraphernalia – is poised for significant losses if there are no NFL games next year.
Kevin McCluskey, manager of the Seahawks Den in Pioneer Square, said with only eight regular season home games a year, each game becomes a large event that imports fans from all over the country.
“The consequences for us would be devastating,” McCluskey said. “We only open on Sundays during the football season, so without those games we would lose a major chunk of our business.”
Having been through similar collective bargaining negotiations in the past, Spencer (who currently is a small business consultant, lecturer and business blogger) said she doubts owners and players are thinking of anyone but themselves, which is why her advice to small businesses that rely on the NFL is to be proactive in the months before the next season starts.
Spencer encourages small businesses owners to start preparing now for a potential lockout by looking for new streams of revenue to offset the losses that would come with no Sunday games.
As NFL owners and players try to hammer out a new deal, McCluskey said he hopes they all recognize what is riding on their ability to resolve their differences in a timely manner.
“They need to look at the bigger picture and realize just how many jobs are at stake, and not just their own,” McCluskey said.