FREE ESSAY ON NBA LOCKOUT

NBA LOCKOUT

Economic Effects of the NBA Lockout
The National Basketball Players Association lockout greatly affected the United States
economy. Greedy team owners and greedy players fighting over large amounts of money
caused the lockout. In March of 1998, team owners felt that they were paying players too
much money, causing clubs to lose money, so they voted to reopen discussions on the
collective bargaining agreement. The players on the other hand felt that any team
financial problems were the owners doing, not how much money players were being paid.
When the two sides could not settle their differences and the collective bargaining
agreement expired, the owners decided to lockout the players until they reached an equal
agreement.
Lasting six months and into the NBA season, the lockout had a huge effect on those
businesses or people associated with the games. First of all, since the games were not
taking place this meant that employees were not able to work in the stadiums. Those
employees who are usually hired to work the concession stands or sell food, drinks, and
souvenirs around the stadium were out of work while the lockout persisted. Lack of work
meant less income for the old stadium employees, thus lowering the demand for other goods
that these people would normally buy. Lower incomes make people purchase fewer amounts of
goods from stores, restaurants, and other recreational activities.
In an article entitled Playing With Fire: A NBA Lockout Could Leave Fans Out in the Cold,
a Phoenix Suns fan, Phil Lester, discusses the NBA lockout and how much money he spends
on game nights. Phil says that he can easily spend between $50-$100 on a night when the
Suns are in town, counting dinner before the game, then some snacks and a couple of adult
beverages during it. And that doesn't include the money spent on the tickets. Without the
NBA, the money usually spent by fans will go unspent, greatly affecting businesses,
workers, and the economy as a whole.
Restaurants near the basketball stadiums lost money because of the NBA lockout.
Basketball fans eat or drink at restaurants and bars before and/or after games, but these
fans were absent from the restaurants and bars because there were not any games to go
watch. In an article entitled Check, Please, John Donovan writes that when the Suns are
playing at their home arena in Phoenix, people crowd the city. He says that on game
nights an owner of a bar or restaurant, A.J. Sulka, can expect to serve at least 1000
people when on non-game nights, Sulka would serve 200 people. The NBA lockout would cause
Sulka, and other restaurants and bars in town, to lose several thousands of dollars per
game night. Fewer people to serve results in restaurant owners and employees having a
lower income. Less food and drinks are demanded, which decreases owners profit and at the
same time, waitresses are not needed to work as many hours and are not paid as much in
tips. Lower incomes affect the economy as a whole because business owners and workers
will spend less money on other goods and services. Lower incomes lower the demand for
other goods and services and affect the businesses offering those other goods and
services. Businesses rely on basketball games to bring them people who will buy goods and
services from them. 
Although the lockout results in less income for businesses related to basketball, it does
mean that fans who normally go to games and spend money will not be spending the money or
would spend the money elsewhere. Basketball fans have more money to spend on other goods,
services, or activities. For example, if a basketball fan could not go to a basketball
game, they might decide to go to a movie instead. This would bring more business to the
movie theater that would not exist if the NBA lockout were not taking place. Also, since
basketball fans would not be spending money on a game, they might decide to spend the
money at the grocery store and buy some extra snacks. This would bring greater amounts of
income to the grocery store. The NBA lockout would then increase the demand for other
goods, services, and activities, which would increase the income of non-related
basketball businesses.
Owners and players suffered from a lower income because of the lockout. Owners of teams
have rent contracts with stadium owners that are paid in advance. The owners rent the
stadiums the teams play in and even if there are no players, the rent is still paid by
the owners. Paying the rent and making no profit from the games causes owners to not make
a profit, have a lower income, and decrease demand for other goods in the market. 
During the lockout, basketball players were not paid any money. When the lockout ended it
had dragged into the middle of a regular season so players were forced to play less games
than usual. Fewer games played meant that the players were paid a less money, creating a
lower income for them. The lower income means that players will have less money to
satisfy their wants and needs. Demand for any goods and services that the players would
normally buy with a higher income would decrease and players would spend more money on
what they actually need. 
The NBA lockout ended when the owners and players compromised on a new seven-year
collective bargaining agreement. Each side made significant compromises to end the
lockout, but the owners walked away with a much better agreement than the previous one.
The new agreement gave owners control of individual salaries that will be in place for
six years, with the owners having a choice of a seventh year. Players did not benefit
like the owners, but non-superstars will be paid bigger salaries. 
Although the lockout ended, the affects on the economy remain. The lockout made fans
unhappy with the players, so many fans are not interested in basketball like they were
before the lockout. Games do not attract as many people so businesses related to
basketball are still affected by the lockout. Stadium employees, team owners, and players
are once again earning their regular incomes, but fewer fans attending the games will
have a long run effect on the income of the NBA, which affects the income of the stadium
employees, team owners, and players. The higher the income of the NBA, the more money
everyone working under them is paid. 
The baseball strike of 1995 caused baseball fans to lose interest in the sport because
fans felt like players did not care about them. Fans became angry because they felt like
players were too greedy and selfish. The same results happened with the NBA lockout. Fans
did not approve of the fighting between owners and players over money so they decided not
to help support the NBA. Whether sports teams have a lockout or strike, the ending result
greatly affects the sport's ability to attract fans and make money, thus affecting the
whole economy.