Inside a Green Bay, Wis., bar near the corner of Lombardi Avenue and Holmgren Way, Jerry Watson envisions the dark, lonely winter looming if the NFL lockout sends pro football packing for a long run or — shudder — for a full season.
“Without the Packers playing on Sundays, I’ll have maybe five people working and maybe 15 customers versus a normal Packers Sunday where I have up to 175 people working and do we 8,000 to 10,000 people through the door,” said Watson, owner of the Stadium View Bar & Grill, just around the corner from Brett Favre’s Steakhouse. A lost season would sap about $1 million, Watson estimated, from his typical annual revenue of $3.5 million.
“Football might be the only (true) religion in Green Bay,” Watson said. “When I look out my window, I can see Lambeau Field with the big ‘G’ on it. Depending on the day of the week, that ‘G’ stands for 'God' or 'Greed.'”
Less than three months before the NFL champion Packers are scheduled to kick off against the Saints, you can imagine which ‘G’ Watson is pointing to these days. Confidential mediation chats between NFL owners and players continue, yet both sides remain engaged in a separate, almost surreal ground game.
That PR scramble involves a core question now tormenting mayors and merchants in every NFL market: How much financial pain will pro football cities feel if the lockout gobbles a fat chunk of the 2011 schedule, or devours all of it?
Warning: Finding the answer is like trying to read the scoreboard at the 1988 “Fog Bowl” in Chicago. The players union, citing a study it sanctioned, contends each NFL city will forfeit, on average, $20 million in revenue, fan spending and lost jobs for every home game cancelled — $160 million if the season is scrapped. The NFL, citing different research, claims the economic impact will be closer to zero.
“I’m a retired Teamster — drove a semi,” Watson said. “I’ve been through enough strikes. Nobody wins but everybody has to posture for position. But do you know how many years I can stand (with no NFL)? Maybe two. And then this place gets shut up.”
Indeed, the NFL Player Association’s estimated $20 million per-city, per-game loss factors in the expected hits to businesses within NFL markets — including restaurants, bars and hotels that rely on Thursday night, Sunday, Sunday night and Monday night games to draw patrons and fuel revenue, said Jesse David, the study’s author.
To calculate the lockout’s possible fallout, David dissected and “aggregated” 11 previous examinations of the NFL’s value to local markets. The studies were conducted (or outsourced) by cities and development groups seeking to convince voters to pay for new stadiums to either keep or attract NFL franchises — including Santa Clara, Calif., Houston and Minneapolis. David declined to say how much the NFLPA paid his firm to crunch the NFL’s dollar punch.
“If you take out the part related to construction of the (new) stadium, and if you take out the piece (accounting for) concerts or college teams maybe playing there, what you have left over is the economic activity from playing NFL games — that’s what these 11 studies all measured,” said David, a senior vice president of Edgeworth Economics, based in Los Angeles.
“We extract that piece of it and say: If you turn the games off, if you stop paying salaries, and you stop paying all the people who work at the stadium, and you stop having visitors from outside the region come to the stadiums — like media and fans — here’s what’s going to happen.”
Armed with David’s assessment, the NFLPA in late 2010 sent letters to the mayors of NFL cities warning that their areas would suffer $160 million revenue decreases without NFL football, and underscoring that the lockout comes “during one of the worst economies since the Great Depression.”
“NFL owners are preparing to cancel the 2011 season and, in the process, devastate Atlanta businesses and stadium workers who count on football Sundays to make ends meet,” NFLPA president Kevin Mawae wrote in letters sent to former Georgia Gov. Sonny Perdue, current Gov. Nathan Deal and Atlanta Mayor Kasim Reed.
Many officeholders – including the mayors of Miami, Houston and Baltimore – subsequently wrote to NFL commissioner Roger Goodell, urging the owners “to create breathing room” with the players “for a deal to be struck,” and in some cases mentioning the hundred-million-dollar shock their cities faced without the game.
The NFL’s response to the union-sanctioned study? “The fairy tales continue,” league spokesman Greg Aiello said. He further criticized the union for “circulating unattributed research.”
Late last week, Aiello declined to comment further on the NFLPA’s $20 million per-game estimate. Instead, his office emailed msnbc.com a link to an article published by the Atlanta Journal Constitution and politifact.com. That article – which, according to Aiello, “debunked” the union’s financial damage estimate – also concluded “there will be little economic impact if there is no NFL action next season. … (P)eople will find other ways to spend their money.”
Can the NFL provide a more accurate number to gauge the possible harm to local economies if games are lost?
“No, we have not calculated that,” Aiello said in an email.
“I don’t understand,” David responded, “why the league doesn’t just say, ‘Yeah, it’s a big deal if we don’t have football; it’s an important economic driver and it’s a reason to get this deal done.’ ”
Another irony, David added, is that about half of the 11 studies he examined for the NFLPA were completed only after NFL teams provided those cities with proprietary financial information.
“The NFL and the owners have engaged in the height of hypocrisy here,” said economist Victor Matheson, who also has studied how sports strikes and team relocations affect cities. “For years, (NFL owners) have commissioned bogus economic-impact studies that produce inflated claims … in order to justify taxpayer subsidies for new and improved stadiums. Now that the NFLPA is using these same studies to put public pressure on the owners and league, the owners and league are now disavowing their own impact studies as unreliable.”
But Matheson, an associate professor of economics at the College of the Holy Cross, isn’t siding with the NFLPA – or with the claims made by Davis, the union’s paid consultant.
Working with two other professors, Matheson previously examined whether Los Angeles suffered any economic scars after it lost two football teams. The academic trio determined there was little to no economic impact after the Raiders and Rams left town. In 2008, those same professors “found no identifiable change” in the economies of Tampa or Miami following the NFL strikes of the 1980s.
“The obvious explanation … is that people simply found other things to do on Sunday afternoons in the absence of the NFL, so the NFL's loss was someone else's gain,” Matheson said.
If the entire season is, ultimately, scratched by labor unrest, Matheson believes NFL cities may feel a total financial pinch that’s closer to, on average, about $16 million – or one-tenth of the union’s assertion.
That smaller number, however, gives no comfort to the owners of hospitality businesses in some NFL markets. They don’t need economic studies to know their operations are in the eye of the lockout storm.
At La Bayou Restaurant on Bourbon Street in New Orleans, gross revenues total as much as $30,000 on days when the Saints have a home game.
“We expect to see that number at around $10,000 if we don't have the Saints playing,” said Shad Stearns, the restaurant's general manager. “After Katrina and the BP oil spill, the Saints became our symbolic, natural rallying point. People (now) take their football very seriously here.”
At the 380-room Doubletree by Hilton hotel in Cleveland, which sits around the corner from Cleveland Browns Stadium, a lost season would slice about $350,000 in revenue, estimated general manager Leonard Clifton. For context, he is assuming that 250 of his rooms will sit empty without football.
“Not too many people will be driving to downtown Cleveland in the late fall or early winter unless there’s a football game,” Clifton said. “You don’t come downtown to hang out in a blizzard.”