NFL Lockout

The summer of 2011 is going to be huge for football in America. The NFL, a large revenue provider for many cities around the country, may have a lockout, which means they will not have a season. This is happening because the collective bargaining agreement between the NFL Players Association and the Owners is expiring. Every Sunday, thousands upon thousands of fans descend on the NFL stadiums and give money to bars, hotels, and other downtown venues, which, in turn, brings in millions of dollars to each city. For instance, the Green Bay Press Gazette has estimated that the city will lose about “$282 million in lost jobs in revenue if a lockout occurs for the 2011-2012 football season.” That kind of money is ridiculous to a city as small as Green Bay, I mean honestly this is Green Bay we’re talking about what else do they have up there besides football and snow? Now let’s talk about our city, wonderful Cincinnati, Ohio. According to Cincinnati.com “At Paul Brown Stadium, 2,500 people are employed on game days. Factor in hotels, restaurants and other businesses that benefit from Bengal’s home games, and the economic impact on an average weekend is $6 to $8 million, according to the Economics Center for Education & Research at the University of Cincinnati.” I know we have the Reds and the Cyclones but honestly where else are we going to supplement that kind of money to our city each week?  Now you may ask, why is this happening? Well, mainly because the owners are mad because they are paying players 59% of the $4.5 billion dollars in revenue each season.  Yes, that is a lot of cash but honestly where do the owners make their money, and who puts their job on the line every Sunday for the sake of the owners bank account? The owners want the players to take an 18% pay cut. 18%!!!!! Are you kidding me, what if your boss asked you to take that kind of hit in your pay checks, what would you say? Yeah that’s right NO EFFING WAY.  I know they are making a lot of money but they also produce a lot of money for their respective teams and cities. Sports mean something to everyone be it if you’re a fan or a spouse of a fan, sports means something to each and every family in this country.  If the NFL has a lockout a lot of cities in this country, including ours, are going to take a major economic hit. 

Summer of 2010

It would take years to quantify the actual impact of the statement “I am taking my talents to South Beach” (Lebron James). To put a number on the heartbroken citizens or unsold jerseys and tickets in Cleveland is just ludicrous. Cleveland is the city of heartbreak: The Drive from John Elway, The Shot from Michael Jordan, and The Fumble from Earnest Byner. Now, The Decision will absolutely crush this city's hearts and the economy because of what Lebron meant to the Cleveland's economy. It wasn’t just the tickets he sold (sell outs every game) or the gear he sold (thousands of jerseys and shoes). It is about the publicity and the fact that people actually wanted to go to Cleveland. Most people around the country do not even know where Cleveland is let alone want to go there. In 2003, before Lebron was drafted, the Cavs averaged 11,497 fans a game. If you average the ticket prices at $50 a game that comes to approximately $574,850 a game which was one of the lowest grosses/game in the league. The team also went 17-65 that year. The year Lebron was drafted the attendance went up to 18,288 fans a game. Now if we average that with ticket prices at $50 a game it is $914,400 a game. That is almost a $400,000 increase just in gate receipts in about 5 months. This does not count everything sold at the game such as : shirts, food, souvenirs etc... And according to Forbes the overall value of the team went from $150 million to over $700 million during that time. Oh, and the team also went 35-47 that year an 18 win increase. Another thing I have not even covered was tax money.  Lebron pays $976,773 in state income tax, $353,250 in local tax, and $186,942.98 in his property tax. That is a lot of money from one man. Further, as a result of Lebron bolting, the restaraunts in downtown Cleveland are going to lose and estimated $48 million over the course of this season according to Cleveland.com. Also according to AOL daily finance during Lebron’s rookie year Cleveland Cavs radio ratings were up 300% and they sold over $72 million worth of jerseys in just nine months. But the main point is Lebron made people in Northeast Ohio and around the Country go from complete love of this guy to complete hatred and disappointment in him. Now tell me another athlete who can have that impact.

Welcome

This is my economics blog. I have decided on the sporting industry, one because i love sports and two because i feel there is so much you can learn about economics just by looking at sports. Throughout my blog i will look at contracts, revenue of teams, and the economic impacts of the different teams and leagues. I hope you enjoy.