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Big Apple takes NBA lockout hit
Published December 21, 1998
The New York City economy stands to lose $236 million if the NBA season is canceled because of the ongoing players lockout, the city's comptroller has warned.
The brunt of the losses would hit Madison Square Garden, home of the New York Knicks, and the dozens of hotels, restaurants and bars that surround the historic arena. Some of the impact would also come from the loss of New Jersey Nets games. The Nets play across the river from New York City at Continental Arena in New Jersey.
The estimates do not take into account possible replacement events at the two arenas or playoff games and layoffs at the NBA, which has its headquarters in the city.
"The loss of revenue for the city and the excitement generated by basketball games is hurting all New Yorkers," said Alan Hevesi, the city's comptroller.
The comptroller's estimate is thought to be the first attempt by an NBA city at quantifying the economic losses from the lockout, a league spokesman said. Philadelphia earlier estimated it would lose $35 million from the cancellation of the All-Star Game.
In an effort to highlight the comptroller's estimate, the New York City Council hosted a recent hearing on the lockout. Representatives from the league and players union declined invitations, however, and the sparsely attended event lasted all of a half-hour. Both the players and the league sent written statements outlining their previously announced positions.
Hevesi estimated that the metropolitan New York City area, including parts of New Jersey and Connecticut, in 1997 enjoyed a $374 million gain from the Nets and Knicks, largely from gate receipts, media sales, bar and restaurant business and advertising.
Through last Monday, New York City alone had already lost $53 million in economic activity because of the lockout, he said. By the end of December the loss will be $70 million, and it will rise to the
$236 million total by the end of April, he predicted. Hevesi did not calculate losses for the entire metropolitan area.
Putting a human face on these figures, a local union organizer told the City Council hearing that Garden employees were not only losing the bulk of their annual wages but were threatened with losing their benefits for next year.
Because the Garden calculates benefits based on how many hours an employee worked the previous year, the lockout could terminate their medical coverage, said Robert Demand, lead organizer for the hotel employees and restaurant employees union, local 100, which represents 600 food and beverage workers at Madison Square Garden.
MSG management and the union have reached a compromise that will credit 30 percent of lost hours to the workers for purposes of medical coverage, Demand said.
From the other side of the table, owners of city restaurants and bars said they too were hurting. The businesses around Madison Square Garden, and to a lesser extent sports bars across the city, have suffered a significant drop in business, said E. Charles Hunt, executive vice president of the New York City chapter of the New York State Restaurant Association.
MSG said it would not comment on the effect the lockout is having on its operations.