Basketball Lockout Impact Varies

With a handshake agreement reached Friday between players and management, the 2011-12 basketball season may get going on Christmas Day. The NBA players will likely vote this week on the agreement to end the lock-out, and some smaller elements such as drug testing still need to be negoiated, but the headlines are blaring that the lock-out is ending. While the news is welcome, restaruant and bar operators likely are not counting on serious revenue spikes just yet.

The NBA lockout had New York City bar and tavern owners so incensed that they were posting banners in their establishments and asking patrons to sign a petition that was sent daily to the National Basketball Players Association and NBA management. A press conference held by New York State Sen. Malcolm Smith together with representatives of the United Restaurant and Tavern Owners Association and the Long Island Restaurant Owners Association in early November drew attention to the fact that the 30 games canceled at that point had cost area establishments an estimated $40 million in business.

New York isn't the only market that was impacted; operators in metro areas that are home to NBA teams across the country were reporting significant food-and-beverage sales declines at bars and restaurants. Cooperstown, the rock-and-sports-themed concept opened by rocker Alice Cooper in 1998 in Phoenix, stood to lose $500,000 if the lockout wiped out the Suns' entire season, manager Ryan Rowland told a local ABC affiliate.

Chain operators, however, appear to be less impacted by the recent lack of hoops. Management at Buffalo Wild Wings, which railed openly against the recent NFL lockout with its “Save Our Season” campaign, was much less concerned about the business impact of NBA courts being dark all season. During a Q3 conference call, Buffalo Wild Wings CEO Sally Smith indicated to analysts that basketball doesn't really drive sales until finals. Other sports-centric chains, such as BJ's and Champps, as well as sports-reliant casual chains, weren't making a lot of noise about the lockout, either.

One NBA player is paying attention to the restaurant industry, however. Milwaukee Bucks forward Drew Gooden signed a multi-unit franchise agreement with Wingstop in October to open four restaurants in Orlando over the next few years. Let's hope he's not looking to pro basketball as a major traffic driver.


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