Whose Business Hurts If There is No 2011 Football Season?

Tuesday nights I am a panelist on Pro Football NYC presented by Football Reporters Online that airs on Blog Talk Radio.  We talk Jets and Giants football and it is usually a lively discussion.  Bu since the lockout, there has not been much to talk about.  Sure there was the NFL Draft, the court dates, Jets West, Eli Manning holding some practices in Hoboken, and some other tidbits.  But there has not been any concrete story to talk or report on.

Last Tuesday we did a show on the fly.  A lot of the topics were done on the cuff.  It was a great show, do not get me wrong, but we were grasps at straws for topics.  All of a sudden I thought of an issue regarding the lockout.  An issue some may have touched on but very, very few report on.  We all know the players, teams, and the NFL are being hit financially by the lockout and possibly no 2011 NFL season.  But what about the other businesses that derive revenue off football before, during, and into the post season?  This can range from sports bars to merchandisers.  From the NFL Sunday Ticket package to beer sales.

There are many businesses that look forward to not just football on Sunday’s, but for the season.  Many start to see sales increase and more visits to their website the closer it gets to the preseason.  There is a certain itch people get.  When you know your draft for fantasy football is around the corner, so is the preseason.  Many businesses gear up because they know fans and customers will be spending extra dollars on football related businesses.

But, if there is no 2011 season, many businesses will see a downturn.  There will be losses in sales, establishments will not be visited as much, food service workers may not receive the same level of tips on Sunday, on top of a chain reaction of businesses losing football season generating revenue.  Let us do a rundown of some businesses that might be affected.  If you believe more might be affected, feel free to contact me or list them in the comments.

Sports Bars/Restaurants
This seems to be the obvious place to start.  Every Sunday, if one is not home or at the game, one is out with friends to watch the game and throw back some beers and wings.  There are countless places across the country where many go to watch their favorite team and other games.  There is the 1 PM game, 4:15 PM game, and the 8:30 Sunday night game.  We can not forget about Monday Night Football here as well.  The sports bars always play more than one game to keep fans there and ordering.  These are times where people flock en mass and order up round after round and appetizer after appetizer.

These establishments know they will be busy and place larger orders so there is enough on hand.  They expect to make more money than usual.  Beer, liquor, dinners, appetizers, and so much more are expected to be ordered in mass quantities.  Servers and bartenders expect to make more than usual as patrons are expected to fill some of these places.  I would not be surprised if some make several hundred in a matter of hours.

Sights like these could be a memory on Sunday's during the season

Now, if there is no football, those places will not be as busy.  Beer sales will be down which will affect the beer companies.  If the same quantities are not ordered as on a football Sunday the suppliers to these establishments will also see a decrease in sales.  Servers will see a decrease in tips and revenue.  Some bars and restaurants may not need extra help and not have as many workers on the schedule.  Anyone associated with business at a bar or restaurant on a football Sunday will see a drop in business that day.

Sports Merchandise/Sporting Goods
This is a business that I am sure has started to take a hit.  Before any season begins many go out to get their new jerseys, hats, shirts, sweatpants, sweatshirts, flags, magnets, and anything else that shows how much of a fan they are for their team.  This is the time many stock up, to find the latest and greatest to showcase their team spirit.  But if there is no game to attend, no tailgating, no bar to go to in pride, does it matter if you went and bought the latest and greatest?

Many fans will go out and buy certain draft picks jerseys before or during the preseason.  With the draft picks not signed to their teams how could they make these jerseys?  We are less than 100 days away from the start of the 2011 season and I am sure not much merchandise is being moved right now.  Many are content to wear or use the items they have had for a while now.

With no football games of any kind, there is no merchandise to sell at any stadium.  There is a loss right there.  Not just to the companies like Starter, Reebok, Big Apple, and everyone else that put out the clothes and sporting goods, but the teams and league itself.  Reebok has an exclusive contract with the NFL to manufacturer all NFL apparel.  They will take the biggest hit.  If Reebok does not make a profit, neither will the NFL or the teams.  It is the trickle down effect.

Will fans still purchase merchandise if there is no football?

The NFL makes money off the licensing agreement.  They also see a piece off what Reebok sells.  The teams also see a piece of anything that is sold with their name on it.  But with no season for fans to show off their wares at a game or tailgating, what good is it?  To have it and hold onto it for next season?  Some will still go out and buy what they can in hopes their is a season.

Let us take an example.  Reebok has replica jerseys from $55-$85 a piece.  Actual jerseys can range from $100 on up, depending on where you buy it.  If at minimum 100,000 jerseys are bought at those prices you can see the millions that could be made if there is a football season.  We are not taking into account the other sporting goods and t shirts, hats, jackets, sweatshirts, and countless other merchandise.

For those who tailgate who adorn their home with the latest wares, there is a loss there.  Many could still just use what they have and not bother to get anything new.  No need for the new grill, tent, cooler, flags, chairs, tables, or anything else many add to their tailgate.  Now this may not be a big business changer but if companies do produce more because they see a slight increase because of football, they may not happen now.

Advertisers
Think of all the commercials one sees during a football game.  The car commercials, beer commercials, electronic ads, and so much more.  If they are not buying the time, the network does not get paid to air those ads.  The companies whose ads are on TV may not be able to reach their target audience they get with football.  They may still run ads, but not the same volume as they would during a Giants vs Cowboys game.  Not having the right placement for ads can hurt sales for a business.

The other way advertisers can be hurt is no one at the stadium sees their logo or ads.  There are sponsors for post game shows, pre game shows, stadium entrances, and the stadiums themselves.  There are so many ads being paiod for at the stadium.  If no season, no ads and the teams lose out on that advertising revenue.  Pepsi may see a drop in soda sales on Sunday.  Companies who have promotional days will not be able to get their name out to fans.

Advertising helps to bring in revenue teams and networks count on.  Without that, they need to find alternate methods to keep their advertisers happy.  Look for ways or broadcasts to push their brand and still reach the public and demographic they look to get from football.  Teams and the NFL are already cutting costs how they can.  If they can not generate revenue from outside sources, employees may not return to work sooner than they think.

There could be no one around to hear or see ads for products and not visit merchandise stands

Now, this could all change if there is a football season this year.  But even if there is a shortened season and no preseason, businesses will still see a small effect.  I know there are many other businesses that will see the effect if there is no season.  I just wanted to bring attention to what could be a loss of revenue to other businesses rather than just the NFL, teams, and players.

Many are out of work or have seen a loss of income due to the down economy.  If there is no 2011 season, many will feel the chain reaction of the lockout into their businesses.  Many look forward to certain sports seasons.  Some companies cater to those who are sports fans or involved with teams and leagues.  If there is no season, I am confident people will feel a hit to their bottom line.

Everyone wants the 2011 season to happen.  There are a few who will remain nameless who do not care if the season happens.  But from the fans, to advertisers, to business owners, to those who make any profit off the football season, we all want to see kick off.  Sports writers and beat reporters more than anyone want the season.  They need training camp and the season to have fresh material to write about.  No one more than the fans want to see the season happen.  Well, maybe not more than the players, or those who will see an increase to their bottom line.

NFL Lockout Not The Worst In Sports, Yet

With NFL labor talks in a standstill, it’s quite possible that there will be no football played in the states this coming September.  If you think you’d get a bad case of football withdrawal by next week, wait ‘til September when you’d be madly searching for the Toronto Argonauts-Ottawa Rough Riders epic somewhere on the Internet.  Or maybe catch that Arena League game on the NFL Network you have been waiting to see.

More sports leagues than the NFL have issues that might be halting play before next season. All four major sports leagues are facing potential shutdowns. It wouldn’t be the first time for stadiums & arenas to have no cheering fans in them, either. Baseball has had eight work stoppages, the NHL and NBA three apiece, and the NFL two. Some lasted a few days, others a few weeks, and one even wiped out the whole entire season and the playoffs.

To be sure, labor trouble isn’t confined to American sports. Sports leagues from Asia to Europe have had games canceled or postponed because of issues between players and management. As professional athletes earn more money, their collective representation becomes more powerful. And with additional revenues coming from television, endorsement deals and increased attendance, millions and billions of dollars are at stake in these negotiations.  No matter what country you play in, there is always a debate over money.

Sometimes the players have their way. Baseball, in particularly, has the most powerful union and its players have been able to get the owners to cave time and again because of their solidarity. At other times, the owners win big. The best such example was the 1987 NFL strike, in which the owners all but annihilated the players union by fielding replacement players (scabs) and cracked the union ranks by encouraging stars to cross the picket line.

1982 NFL Strike Sports Illustrated Cover

And there are cases when strikes are purely symbolic, with both the players and management unable to do much about decisions made by a higher power. No, God may not care who wins or loses, but courts surely decide arguments in someone’s favor and it’s not always strictly along labor lines.

The 1995 Bosman Ruling by the European Court of Justice, which caused a brief strike in Italy’s Serie A, famously made a few players and teams very rich while leaving others – players and teams alike – either without a job or bankrupt.  Sometimes it is not up to the players or the teams to show who has the true power in negotiations.

When courts don’t intervene, it’s then up to the warring sides to come to some kind of middle ground. While the average fan cannot find himself sympathizing with either the millionaires or the billionaires, it’s important to realize that professional sports is a business that goes way beyond the fun and games.  There is more concern for the dollars lost & gained rather than the faces in the crowd.

George Santayana famously cautioned, “Those who cannot remember the past are condemned to repeat it.” Well, no time is like the present for some history lessons. Let’s recap some of the pasts strikes and work stoppages to see just how sports has not just affected the players and owners, but the fans as well.

NHL 2004 Lockout

The NHL became the first major North American sports league in history to cancel a whole season, as recently as 1994-95, over a labor dispute. For the first time since 1919, the Stanley Cup was not awarded at the end of the season. That dispute — where the main issue was the salary cap — lasted 310 days and caused the cancellation of 1,230 games.

A salary cap was instituted, to be adjusted annually to guarantee players 54 percent of NHL revenues. A salary floor was also implemented, and player contracts were to be guaranteed. Revenue sharing and two-way salary arbitration were ushered in.

1981 MLB Strike

The 1987 season was the last time the NFL experienced a work stoppage. Players went on strike as they argued for liberalized free agency rules. However, only 14 games were lost that season and it was seen as a big win for the owners.  42 were played by the replacement players.

The league had another work stoppage in 1982, the result of a players’ strike over the sharing of revenue with owners. There were 98 games canceled that season and by the time play resumed, both sides claimed victory.  It seems with the NFL, history does repeat itself.  Despite abbreviated regular seasons in both strike years, the NFL still staged the Super Bowl.

The main issue in this year’s ongoing NFL labor dispute revolves around the splitting of a $9 billion revenue pool. Owners want a bigger share while players are reluctant to agree until they’re provided with transparent financial data from the league. Other issues under discussion & dropped are: expanding the regular season to 18 games (not happening), instituting a rookie wage scale, and improving benefits for current and retired players.

The 1998 NBA season was shortened from 82 games to 50. A total of 928 games were lost.  It was the first NBA work stoppage that resulted in a loss of games.

The owners wanted a cap for the league’s highest paid players and a larger share of the revenue. The players were relatively happy with the current structure but wanted an increase to the league minimum. The lockout swung in the owners’ favor when an arbitrator ruled that the owners didn’t have to pay the players their guaranteed salaries while play was halted.

Commissioner David Stern set a deadline of Jan. 7 to get a deal done or he would cancel the season. A deal was reached on Jan. 6 that most believe favored the owners.  Salaries were capped at $9-14 million, depending on years of service and a pay scale was put in place for rookies. There was a modest raise to the league minimum.  A first in NBA history.

The NBA was at its peak before the lockout and it took a big hit. Attendance and TV ratings declined and its biggest star, Michael Jordan, retired during the lockout. Only recently with stars like Dwyane Wade, Dwight Howard and LeBron James has the NBA been able to fully recover.  The NHL saw a similar decline after it lost a year of play.

1987 NFL Strike

After the NHL, the next-highest number of games lost because of a work stoppage have both occurred in Major League Baseball. There were 920 games canceled in the 1994-95 strike, including the 1994 World Series. MLB also lost 712 games because of another strike in 1981.

In all four major North American sports leagues there seems to be a continued dispute in the same areas: salary and salary cap, revenue sharing from both the team and media outlets, and miscellaneous financial alternatives.  This years NFL debate is the first one to have a suit centered on retired players health care.  One will wonder if the other leagues will follow suit when the time comes.

There are labor disputes all the time.  The Teamsters, AFL/CIO, UFCW, Air Traffic Controllers, Cab Drivers, and dozens of other unions have either gone on strike or had a work stoppage.  They get attention from everyone, but not the same amount professional sports gets.  Plus, fans always seem to be caught in the middle of a sports strike or lockout.  You do not see fans complaining when Wal Mart employees are not working, do you?

As it stands now, football seems like a dream come September.  The other major sports in North America seem to have their issues looming on the horizon.  This is a vicious cycle.  If the players and owners can not learn now, then when will they?  How long do they expect the fans to to wait?  No matter what sport you follow the most,  when there is a strike or work stoppage, the fans seem to wait for the outcome more than the parties involved.

(Statistics & dates compiled from Wikipedia)

American Dream Project Will Benefit Jets, Giants, & Meadowlands

Standing in a building that has remained unchanged and likely to get over $200 million in tax incentives, Gov. Christie ushered in the arrival of the “American Dream” in North Jersey last week.  The much-maligned and long-stagnant Xanadu development at the Meadowlands, which Christie called the “the ugliest damn building in New Jersey, and maybe America,” along with everyone else who drives by it, will get a makeover by the Canadian developer who built Mall of America in Minnesota.

Next to the Jets and Giants stadium, with a dead-on view of the Manhattan skyline, the newly minted complex, called American Dream at Meadowlands, will feature high-end shopping, a 26-screen movie theater, nightclubs, a performing arts theater, restaurants, an indoor ice-skating rink, and an indoor ski slope (with moguls and a snowboard half-pipe), according to Triple Five, the developer.

Governor Chris Christie, NJSEA Advisory Chairman Jon Hanson and Triple Five Chairman Nader Ghermezian announced plans to operate the retail and entertainment complex called American Dream Meadowlands in East Rutherford, N.J Credit: Retailtrafficmag.com

And in a structural addition to the original Xanadu, there will be glass-domed amusement and water parks – with sand and palm trees.  Triple Five has been know to do this in Mall of America and other malls across Canada.  They design their malls to be places of destination for everything under one roof rather than finding entertainment is several locations.

Reuters reported that Triple Five  will be developing the world’s largest and most comprehensive retail, entertainment, amusement, recreation, and tourism project ever built.  Not a bad way to help crate jobs and revenue for New Jersey.  The economic impact for New Jersey would be $3.8 billion according to Triple Five.

Many might wonder how this will benefit the Jets and Giants.  What this will do is add options to fans and families for weekend getaways.  So instead of a Sunday of football, there is a weekend of activities.  The Jets and Giants could run activities a few days before across the road to get people psyched up for Sunday’s game.  Not to mention tie ins and other pregame festivities run by the organizations.

Show up on a Friday night to a local hotel and have dinner at American Dream and do whatever fun activity there is to do.  There is something there for every member of the family.  On Saturday one can do so much in one location, why go anywhere else?  Sunday is football.  Those not attending the game will have restaurants to watch the game in, some will shop as other family members attend the game.

The project will get at least $200 million in tax incentives from the state, Christie said at a news conference last Tuesday inside the 2.4 million-square-foot, partially built structure. But he refused to provide more details about the deal his administration worked out with Triple Five.  I am sure a lot of those breaks also include some incentives for certain NJ politicians.

The Sierra Club blasted the arrangement, releasing a statement even before the media tour of the facility was over.  The environmental group said American Dream, sitting on the most valuable piece of real estate in New Jersey, would end up getting $350 million in tax subsidies once it expands, as it has planned.  If NJ is in need of the business, jobs, and revenue, there should be not be given that much tax subsidies, but then again, NJ tax payers do not make those decisions.

The planned American Dream after completion Credit: NJ.com

Triple Five may want to call this the American Dream, but it is a nightmare to taxpayers that will pick the pockets of us regular New Jersey citizens.  It is ludicrous that at a time when many are hurting financially, local governments are broke, and property taxes are rising, that we are subsidizing this monster mall.

According to the Christie administration, the complex will create more than 9,000 construction jobs and 30,000 permanent jobs once it opens. Officials expect between 50 million and 60 million annual visitors, with half of them tourists.  Expect big numbers on football weekends as well.  I am sure the teams will set up weekend packages with tickets.

Most of American Dream will open in the fall of 2013, in time for the Super Bowl scheduled to be played at the new Meadowlands stadium.  One will wonder if American Dreams theater’s will air the Super Bowl to keep patrons there.  I am sure screens will air it all over the place to keep people shopping, riding rides, and doing what it takes to keep them there to spend money.

Triple Five plans to invest $1.5 billion atop the $2 billion already spent there, and expand by nearly a third, or one million square feet. The existing structure is well on its way to completion, with extensive aesthetic changes planned. Other essentials – such as escalators and the ski lift – also are in place.

One can only wonder if the expansion will take up more room in the non PSL parking.  Will it create trouble for those parking by the Izod Center?  Will this expansion do anything to disrupt the tailgating that goes on.  No one can tailgate in the parking garage so that is out.  Also, with the building through 2013, how will this affect fans parking for Jets and Giants games?  We can only wait and see.

The theater at American Dream will have seating for 2,000 to 3,000 people. Screens in the center of the complex will change colors on football game day, depending on whether the Jets or Giants are playing next door. And there are plans to build either a bar or movie theater on an outdoor patio that has spectacular views of New York, about 10 miles to the east.

Current Xanadu structure.......bleech!!! Credit NJ.com

Most of all, Triple Five vowed to replace the massive multicolored exterior panels, so hated by Christie and most of us here in New Jersey.  Driving by it it looks like a rust colored piece of trash.  Triple Five plans to give it a more glowing feel so people will be amazed at it look from a distance.

The Jets and Giants have both been waiting for someone to pick it up across the road.  With the American Dream coming in, it can only help their overall business from an off the field point of view.  It provides more opportunities to hold events.  The restaurants, stores, and other facilities might even have events or specials to help draw customers to spend more.  Clothing stores will have sales on jets and Giants merchandise so fans can have it in time for the game on Sunday.

I am sure Triple Five has been in touch with the Jets and Giants.  To see what opportunities it can provide each other.  Not to mention what it can do to help each other make more revenue during the 2014 Super Bowl.  Triple Five knew the opportunity and make a calculated decision.  The NY teams will have a presence at American Dream.  Might even see ESPN do some broadcasting from there at some point.

Once American Dream is completed, New jersey will have a another destination that many will flock to for vacations.  We have Atlantic City, the Jersey shore, and now American Dream.  Being close to NYC, it creates a good destination for those wanting to visit both.  It also provide the Jets and Giants an opportunity to keep fans close for an entire weekend.  But how will it benefit them financially?  We can only wait and see.  Right now, Triple Five & New jersey seem to be the only one set to profit.