With a labor dispute threatening to kill the 2011-12 NBA basketball season, restaurant owners, barkeepers and vendors near Staples Center in downtown Los Angeles are bracing for a big loss in revenue from fans who would normally crowd into the area several times a week.
The deadlocked contract talks have hit particularly hard on a new Hooters restaurant that opened in July on Figueroa Street across from Staples Center to draw big-spending Lakers and Clippers fans.
“We definitely opened this restaurant to be event-driven,” said Hooters general manager Laura Acton, who complained that she doesn’t have enough work for all of the waitresses she hired to serve NBA fans.
The total financial effect of a canceled season is hard to calculate, but an analysis by the Los Angeles County Economic Development Corp. estimated that the 18,997-seat Staples Center, surrounding businesses and teams could lose out on about $3 million in revenue for every canceled game. And that doesn’t include other money lost by the players and the teams, including income from television game broadcasts and basketball merchandise.
About half that amount would be lost by Staples Center and arena vendors in ticket sales, food and drinks, with businesses outside the arena losing the other half, said John Blank, an economist for the LAEDC.
If the entire season were canceled, Blank predicted the hardest hit could be the waitresses, bartenders and taxi drivers who would lose extra work shifts and hefty tips generated by basketball fans.
“This hits really hard on waiters, bartenders and shop owners, who could lose about 20% of their income,” Blank said. “Twenty percent of your income is a lot to lose.”
Through Wednesday, the NBA has canceled 33 preseason and regular season home games at Staples Center, and already some workers are feeling the pinch.
At Lawry’s Carvery restaurant at the L.A. Live entertainment center next to Staples, waitress Diana Rojero had hopes to be assigned plenty of work hours and earn big tips from NBA fans. But she now works 20 hours a week, about 10 hours a week less than she had hoped.
Rojero’s manager said he couldn’t justify giving out more work hours without the NBA crowds.
“It has put the hardest strain on our servers,” manager Jeffrey Brown said.
Merchants near NBA arenas across the country are also feeling the pain.
Business boosters in Phoenix, Oakland and Salt Lake City said the cancellation of the season could mean the loss of millions of dollars in revenue for local businesses.
In downtown Salt Lake City, college football games and holiday events should draw visitors for the next few weeks, but businesses will feel a big effect if the Utah Jazz don’t play by January, said Marty Carpenter, a spokesman for the Salt Lake Chamber of Commerce. “We are just starting to see what the impact may be,” he said.
But the financial hit could be particularly hard on shops around Staples Center, which is home to two NBA teams and hosts a combined 82 regular season home games.
Staples Center, owned and managed by Anschutz Entertainment Group, continues to host other events, such as L.A. Kings hockey games, concerts and ice shows. But AEG officials said they couldn’t schedule new events to replace the canceled NBA games because the outcome of the NBA contract dispute changes day to day.
The effect on hotels probably wouldn’t be as significant, Blank said, unless the NBA cancels playoff games, which typically draw more out-of-town visitors who tend to spend more than local fans. “Those games have a bigger payout to the city,” he added.
Luis Villaneda, general manager of Rock’n Fish, another restaurant at L.A. Live, said his eatery still draws business from arena events. But he estimates that the loss of the NBA games has cut revenue by about 30% compared with last year at this time.
“It’s a huge chunk of revenue for us,” he said.
The Hooters restaurant opened July 11, taking over an empty brick building formerly occupied by an auto dealership less than 500 feet from Staples Center. The 7,300-square-foot location seats 270 and features 40 large high-definition TV screens, three 200-inch HD television screens and a full bar.
On nights when the Staples Center hosts a Kings hockey game or another big event, Acton said she calls in about 40 to 50 workers. But when the arena is dark, she only brings in about half that number.
She estimates each canceled NBA game means a 30% drop in nightly revenue.
“It has definitely impacted us,” she said.
Taxi drivers who circle the arena to pick up fans after NBA games say they too are losing some business and, more important, tips.
Cyprian Udo, who has been driving a cab for about 18 months, said Lakers fans tend to pay out bigger tips than Clippers fans. And the tips from all fans at Staples Center increase, he said, when the home team wins.
“The tips are good when they win,” he said as he sat in his cab near the arena. “If they lose, they don’t care about tipping.”