What Do the NBA Lockout and a Dark Staples Center Mean for Downtown?
Cars pass a darkened Staples Center on October 10, 2011. If the NBA does not return in 2011, Downtown L.A. could see a $40 million economic hit from dark nights at the arena.
DOWNTOWN LOS ANGELES — Late on Monday evening, NBA commissioner David Stern emerged from talks between the leagues owners and players to issue a statement: the league would be canceling the first two weeks of the upcoming regular season.
As host of both the Lakers and Clippers, Downtown L.A.'s Staples Center is uniquely exposed to the impacts of a basketball stoppage. The arena is one of the busiest in the world, and a big piece of that comes from the nearly 100 nights a year the venue hosts NBA games.
When those nights suddenly go dark, Downtown is sure to feel it. If the NBA does not return before the end of 2011—a possibility that many analysts feel is likely—the economic impact to Downtown could be roughly $40 million in lost spending.
32 of the 68 events that Staples Center has remaining in 2011 would be wiped off the schedule by a protracted NBA lockout. Of the 57 dates currently scheduled for events, 26 of them would go dark without basketball. Because the NBA releases dates on a rolling schedule, AEG is unlikely to have time to book more than a handful of new events into suddenly free nights. The company declined to comment on any issues related to the lockout.
To try and figure out what that would mean for Downtown, we talked to John Blank, Deputy Chief Economist with the Los Angeles County Economic Development Corporation.
Assuming 30 games are lost, and that each would have pulled in roughly 20,000 fans, the lockout would cost Staples Center 600,000 ticketed fans in 2011. That would equal perhaps $30 million in ticket sales, but Blank considers that money—much of which would go toward player salaries and other team expenses—a sunk cost that would not necessarily have gone back into Downtown.
Outside the arena, those 600,000 fans might have spent an average of $20 on food and drinks, totaling $12 million. Another $4 million might have gone toward parking, and $6 million may have been spent on concessions inside the arena.
That $20 million is then given a 2x multiplier to account for the effect of funds that are re-spent in the Downtown area. That leaves a total number for induced and indirect expenditures outside of ticket sales of $40 million.
While money that would have been spent on tickets and food will likely still be spent regionally on entertainment, much of that spending would take place outside of Downtown.
Still, the picture is not entirely bleak for the central city. Because AEG does schedule so heavily, the arena's 38 remaining non-basketball events are still more than other prominent arenas. Madison Square Garden would lose 14 dates if the Knicks did not play a game before the end of the year, leaving 20 booked events. Chicago's United Center would lose 11 Bulls games, leaving it with 33 events—a number buoyed by 12 days hosting the circus. L.A. Live also still has events at Nokia Theatre and the other venues in the L.A. Live complex, keeping a steady stream of visitors flowing into the neighborhood.
Blank said that traffic is part of a smart strategy by AEG. "They're all about leverage," he noted. "They're diversifying, and they've taken that risk up front."
Also: Over on the KPCC website, Matt DeBord says the cancellation is a chance for L.A. Live's—and the region's—diversified entertainment options to shine. He also includes a clip from "Fast Times at Ridgemont High."