Small Business Owners Getting Squeezed by NBA Lockout
NBA LOCKOUT, CNBC, CNBC.COM, SMALL BUSINESS, ECONOMY
Posted By: Darren Rovell | CNBC Sports Business Reporter
| 21 Nov 2011 | 11:11 AM ET
When the NBA lockout wasn't settled, the players disbanded and sued the league and Boston Celtics power forward Kevin Garnett started missing his $833,333
bi-monthly paychecks.
But the prospect of no season likely hurt Scott Noguiera more than Garnett. Noguiera is owner of Porters Bar & Grill, which is located by the TD Banknorth
Garden, where the Celtics play.
Noguiera, who typically employs an additional eight workers on Celtics game nights, said the lockout means he'll be missing out on about $300,000 in revenue
if a whole season is lost.
"This means slower debt repayments, less hiring, less savings to hold us through the slow summer months in this location," Noguiera said. "That's also less
salary for me, less tips for employees and less meals tax revenue for the city and state."
Noguiera's story is one of thousands of business people who are affected by the NBA lockout.
Kevin Krueger runs SupahFans, an apparel company that makes creative Boston T-shirts that has a Web site and a retail store in Fenway. Krueger says his
basketball-related sales, thanks to the lockout, have sputtered.
"Our store sold one 'Beat LA' T-shirt this week," said Krueger, who says that his total customer base is down 20 percent, while revenues are down 30 percent
thanks to the Celtics not playing.
A 30 percent decline seems to be the magic number, even for Henry, who runs an escort service in New York that he says charges between $400 and $4,000
an hour, depending on the woman.
Henry says he takes between 65 and 80 percent of the total cut to match the players and other high-profile fans, who are with the client an average of four
hours.
"There are replacements but they aren't as consistent and not nearly as high paying," Henry said.
Among the biggest losers are the hotels that host visiting NBA teams. A manager of a hotel in an NBA city told CNBC that losing visiting team traveling parties
will cost them in between $400,000 and $500,000 this year in lodging, food and beverage.
Media members, many of whom for their networks on a freelance basis, are also suffering. We withheld their names to avoid potential backlash by the league.
One team announcer told CNBC he's losing $1,000 a game.
"What’s made the lockout even more challenging is that without having a real clear idea of what was going to happen I wasn’t able to pursue other on air work
and people were reluctant to even entertain hiring knowing that there was a chance I would have to go back my NBA job," he said. "It was very much a 'Catch
22' situation."
A team's radio studio host says losing the season would cost him $11,125. That's the final straw, considering his wife was laid off from her job at a bank a year
ago.
"We've been struggling to make house and car payments," he said. "The NBA money would help us catch up on those, but I'm still going to have file for
bankruptcy for a credit card loan I've defaulted on due to the missed money so far."
Denver radio producer Jesse Thomas says no Nuggets games will cost him half his salary this year or $23,500.
" I am now faced with the tough decision of waiting this out or finding a new gig," Thomas said.
Ticket sales refunds have also hurt those selling them, including those tickets they've already sold.
A premium ticket sales executive with a southwest division team tells CNBC that he has lost more than $7,000 in commissions in the first two months, as
teams have had to give back money for games not played. That's a big deal considering, in a normal year, he makes three times his base salary of $18,000 in
commissions.
Not playing also means that sponsors won't be making payments. A corporate sales executive for a Western Conference team says told CNBC that he stands
$40,000 if a single NBA game isn't played. That's more than 30 percent of his total income.
The Houston Rockets laid off a whole department of 13 sales executives in the summer. One employee, who spoke on the condition of anonymity, said he had
to move back to his home state of Kentucky since he couldn't draw unemployment and his wife was making only $9 an hour as a kindergarten teacher.
Arena workers are also losing the extra cash.
David Johnson sells beer at the United Center for Bulls and Blackhawks games to make ends meet while trying to make a career in sports radio. Now he's only
working hockey games. While he typically earns more for Blackhawks games ($200), he figures he'll lose north of $6,000 if the Bulls don't play a season.
This would have been Michael Chernow's third season as the ballboy for the Philadelphia 76ers.
"While the paycheck I get from the 76ers isn't the main source of income for me, seeing the players complain about the millions they want is very upsetting to
someone making $7.15 (an hour)," Chernow said.
Companies that make money off NBA teams are also suffering. Fast Model Sports works with more than 95 percent of the teams in the NBA. It's yearly scouting
report software generates more than $200,000 in revenue from NBA teams that will now be lost.
Yes, the NBA lockout is about millionaires fighting billionaires, but it's also about so many others whose livelihood depends on the game.
"The lockout really could not have happened at a worse time on top of all the economic pressure we've had," said Boston bar owner Scott Noguiera.
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