NBA Lockout
The National Basketball Players Association
lockout greatly affected the United
States economy. Greedy team owners and
greedy players fighting over large
amounts of money caused the lockout. In
March of 1998, team owners felt that
they were paying players too much money,
causing clubs to lose money, so they
voted to reopen discussions on the
collective bargaining agreement. The players
on the other hand felt that any
team financial problems were the owners doing,
not how much money players
were being paid. When the two sides could not settle
their differences and
the collective bargaining agreement expired, the owners
decided to lockout
the players until they reached an equal agreement. Lasting
six months and
into the NBA season, the lockout had a huge effect on those
businesses or
people associated with the games. First of all, since the games
were not
taking place this meant that employees were not able to work in the
stadiums.
Those employees who are usually hired to work the concession stands or
sell
food, drinks, and souvenirs around the stadium were out of work while
the
lockout persisted. Lack of work meant less income for the old stadium
employees,
thus lowering the demand for other goods that these people would
normally buy.
Lower incomes make people purchase fewer amounts of goods
from stores,
restaurants, and other recreational activities. In an article
entitled
"Playing With Fire: A NBA Lockout Could Leave Fans Out in the Cold,"
a
Phoenix Suns fan, Phil Lester, discusses the NBA lockout and how much
money he
spends on game nights. Phil says that "he can easily spend between
$50-$100
on a night when the Suns are in town, counting dinner before the
game, then some
snacks and a couple of adult beverages during it. And that
doesn't include the
money spent on the tickets." Without the NBA, the money
usually spent by
fans will go unspent, greatly affecting businesses, workers,
and the economy as
a whole. Restaurants near the basketball stadiums lost
money because of the NBA
lockout. Basketball fans eat or drink at restaurants
and bars before and/or
after games, but these fans were absent from the
restaurants and bars because
there were not any games to go watch. In an
article entitled "Check,
Please," John Donovan writes that when the Suns
are playing at their home
arena in Phoenix, people crowd the city. He says
that on game nights an owner of
a bar or restaurant, A.J. Sulka, can expect
to serve at least 1000 people when
on non-game nights, Sulka would serve 200
people. The NBA lockout would cause
Sulka, and other restaurants and bars
in town, to lose several thousands of
dollars per game night. Fewer people to
serve results in restaurant owners and
employees having a lower income. Less
food and drinks are demanded, which
decreases owners profit and at the same
time, waitresses are not needed to work
as many hours and are not paid as
much in tips. Lower incomes affect the economy
as a whole because business
owners and workers will spend less money on other
goods and services. Lower
incomes lower the demand for other goods and services
and affect the
businesses offering those "other" goods and services.
Businesses rely on
basketball games to bring them people who will buy goods and
services from
them. Although the lockout results in less income for businesses
related to
basketball, it does mean that fans who normally go to games and spend
money
will not be spending the money or would spend the money
elsewhere.
Basketball fans have more money to spend on other goods,
services, or
activities. For example, if a basketball fan could not go to a
basketball game,
they might decide to go to a movie instead. This would bring
more business to
the movie theater that would not exist if the NBA lockout
were not taking place.
Also, since basketball fans would not be spending
money on a game, they might
decide to spend the money at the grocery store
and buy some extra snacks. This
would bring greater amounts of income to the
grocery store. The NBA lockout
would then increase the demand for other
goods, services, and activities, which
would increase the income of
non-related basketball businesses. Owners and
players suffered from a lower
income because of the lockout. Owners of teams
have rent contracts with
stadium owners that are paid in advance. The owners
rent the stadiums the
teams play in and even if there are no players, the rent
is still paid by the
owners. Paying the rent and making no profit from the games
causes owners to
not make a profit, have a lower income, and decrease demand for
other goods
in the market. During the lockout, basketball players were not paid
any
money. When the lockout ended it had dragged into the middle of a
regular
season so players were forced to play less games than usual. Fewer
games played
meant that the players were paid a less money, creating a lower
income for them.
The lower income means that players will have less money
to satisfy their wants
and needs. Demand for any goods and services that the
players would normally buy
with a higher income would decrease and players
would spend more money on what
they actually need. The NBA lockout ended when
the owners and players
compromised on a new seven-year collective bargaining
agreement. Each side made
significant compromises to end the lockout, but the
owners walked away with a
much better agreement than the previous one. The
new agreement gave owners
control of individual salaries that will be in
place for six years, with the
owners having a choice of a seventh year.
Players did not benefit like the
owners, but non-superstars will be paid
bigger salaries. Although the lockout
ended, the affects on the economy
remain. The lockout made fans unhappy with the
players, so many fans are not
interested in basketball like they were before the
lockout. Games do not
attract as many people so businesses related to basketball
are still affected
by the lockout. Stadium employees, team owners, and players
are once again
earning their regular incomes, but fewer fans attending the games
will have a
long run effect on the income of the NBA, which affects the income
of the
stadium employees, team owners, and players. The higher the income of
the
NBA, the more money everyone working under them is paid. The baseball
strike of
1995 caused baseball fans to lose interest in the sport because
fans felt like
players did not care about them. Fans became angry because
they felt like
players were too greedy and selfish. The same results happened
with the NBA
lockout. Fans did not approve of the fighting between owners and
players over
money so they decided not to help support the NBA. Whether
sports teams have a
lockout or strike, the ending result greatly affects the
sport's ability to
attract fans and make money, thus affecting the whole
economy.