More than millions

December 1, 2011 by · Comments Off 

BEYOND THE BUBBLE

By Brooks Igo
bigo@smu.edu

Even as the National Basketball Association (NBA) lockout seems to be coming to an end, the hope to salvage a full 82 game season has been extinguished. Local businesses that greatly benefit from the hometown Mavericks and fans who are hoping for another title run have already felt the repercussions and are hoping the recent tentative agreement between the players and owners will be approved and become official.

Prior to the recent tentative agreement, which has NBA games kicking off on Christmas Day, the forecast for an NBA season was gloomy. So gloomy, in fact, that season ticket holders were looking for a Plan B.

“My husband was looking at SMU’s schedule to get our basketball fix elsewhere,” says Janine Pence, who has been a Mavericks season ticket holder with her husband for 12 years.

Pence says she and her husband would be able to look past the recent labor dispute and are committed to renewing their season tickets if the recent agreement is approved. The negotiations between the players and the owners haven’t been well-perceived by the public.

“I think I agree with most people that it’s millionaires arguing with billionaires,” says restaurant owner Josh Babb.

Babb owns Kenichi, which has been voted “Best Sushi in Dallas” three years in a row by Citysearch and has been in Victory Park for the past five years. He says revenues have been cut in half on nights when the Mavericks play home games and the restaurant has had to cutback on labor and other costs.

“It’s affecting working class people and affecting my tipped employees,” Babb said. “It trickles down to us.”

Mark McGrath, who is a bartender at Victory Tavern in Victory Plaza and wants you to know he is not the lead singer of Sugar Ray, looks forward to game nights for the extra tips he receives. He says on a typical home game for the Mavericks he makes somewhere between $150 and $200 in tips compared to about $100 on an average night. It’s a significant loss on tips for the year when you multiply that difference by 41 home games.

Aside from tips, McGrath, who has been a bartender and server for 12 years, says the atmosphere and buzz has been affected.

“It’s not as much fun,” he said.

McGrath says if you combine the Mavericks lockout with a Dallas Stars road trip, you could potentially have a couple of weeks without any event at the American Airlines Center. To adjust, Victory Tavern, which is located by the south entrance to the arena, has been working with a smaller staff. He says they usually hire four or five more people during a Mavericks season.

It’s been 13 years since the last NBA lockout and this one comes after the most successful season for TV ratings and an all-time high for game attendance. The lockout started in June, after negotiations to draft a new Collective Bargaining Agreement (CBA) started 18 months prior to that, with $4.2 billion in revenues and $2.2 billion in player compensation on the line. The NBA has officially cancelled games through Dec. 15 so far.

The main issues have been over revenue sharing, salary cap, and basketball-related income (BRI). Owners claim they are losing money, so they have pushed for a hard salary cap, which fixes the amount of money a team can spend and imposes a limit on the size and length of NBA contracts. The greatest concern, however, is over BRI. The CBA agreement that expired in June had the players receiving 57 percent of BRI (ticket sales, TV contracts, concessions, etc.), but the owners first offer for the new CBA had the owners receiving 61 percent. The players have since conceded to 52.5 percent of BRI.

The players rejected the most recent offer by the owners on Nov. 14, further putting the 2011-12 season in jeopardy. The offer called for a 50/50 split of BRI and a 72-game season starting on Dec. 15, but the NBAPA declined and are planning to disband the union and file an antitrust lawsuit against the owners. This would shift the dispute from a labor dispute to an anti-trust issue.

Authorities with both the Dallas Mavericks and American Airlines Center declined to comment on the lockout.

Some restaurants around the American Airlines Center haven’t been as affected by the lockout as others. Charlie Green, who owns Neo Pizza in Victory Park and Olivellas on Hillcrest and McFarlin, says his Neo restaurant has a pretty good regular clientele and the lack of Mavericks home games doesn’t interfere with the lunchtime business.

“Though it’s always good to have people down here, it’s not that much of a punch in the gut,” he said.

Green, who says they could’ve opened at 6 a.m. the day of the Mavericks championship parade, is more concerned about the long-term effect of the lockout and people getting out of their routine.

Steve Parry, who has been a ticket broker for 23 years, echoes Green’s concerns and says it tends to take awhile to get the fans back after a lockout. He says it will be hard for the players to justify a lost season to the fans.

“Lots of people will have a bad taste in their mouth with the NBA,” he said.

Parry, who owns Golden Tickets, says this NBA lockout is having a similar effect as the National Football League (NFL) lockout did earlier this year. It has convinced season ticket holders not to reinvest and, as a result, there are virtually piles of tickets available for games. He says all orders for season tickets have been cancelled for the NBA.

“Professional sports are what we sell and the marketplace is destroyed,” he said.

If the lockout persists and the season is cancelled, the opportunity for the Mavericks to defend their championship will not only be prolonged, but also an opportunity for new business. Kenichi owner Babb is hoping the NBA labor issue is resolved by mid-January when he plans on opening a new taco bar called Shooters in Victory Plaza. The lockout has his investors and him feeling uneasy about the potential of the restaurant without the Mavericks.