Hockey lockout is taking its toll

[Allan]

Hockey lockout is taking its toll

Businesses, employees, city struggling with lost income

February 5, 2005

BY JOHN MASSON and NATE TRELA

FREE PRESS STAFF WRITERS

It's not so much the lost business, the missing excitement, the hole in the center of Hockeytown's heart.

No, if you ask longtime hockey fan and Anchor Bar owner Vaughn Derderian, it's much worse than that.

"The distressing thing is, my heroes are morons," he said. "And that's kind of a reflection on me."

He's only warming up.

"They're absolute morons. They're accused of being a second-tier sport, and their actions are proving it."

This from a business owner whose pub on Fort Street, just a few blocks from Joe Louis Arena, hasn't suffered nearly as much as some during the 142-day National Hockey League lockout.

Thus far, the NHL lockout -- sparked mainly by a dispute over what the players call a salary cap and what the owners call "cost certainty" -- has laid waste to 775 regular-season games around the league and put a sizable dent in the city of Detroit's coffers and business cash registers regionwide.

Talks between the feuding sides broke off Friday after a four-hour meeting in New York. No progress was reported, but the season wasn't canceled, either.

Fifty-three Red Wings games, including 26 home dates, have evaporated so far this season. And while there are no victories being logged, there are plenty of losses.

Former Comerica Bank Chief Economist David Littmann said in September that metro Detroit could lose up to $75 million in revenue if the season were canceled.

Melissa Armstrong, senior director of the research department of the Detroit Regional Chamber, said Friday a "conservative estimate" of the economic impact of that lost revenue -- measuring how it would have generated other jobs and spending -- is $153 million.

That hit is being felt from the city of Detroit to the businesses that depend on the Red Wings' fan base, based on the lost salaries, gate receipts, concessions, parking and sponsorship revenue.

The City of Detroit itself stands to lose at least $10 million from a canceled season and already is nipping and tucking in response to lost games at Joe Louis Arena, and the Detroit City Council spent much of the day Friday trying to squeeze millions out of a budget that already has a bulging deficit.

Al Fields, Detroit's deputy chief operating officer, said the city loses about $225,000 per game just in parking, concessions, ticket surcharges and People Mover rides.

For every home game not played, the People Mover loses about 8,000 to 12,000 passengers, said Ericka Alexander, spokeswoman for the People Mover. A ride is generally 50 cents.

Armstrong added that the city likely will lose at least another $500,000 in income tax from players. "Some of it has been factored in," said Fields, who was reading the Hockey News in between meetings at the Super Bowl in Jacksonville, Fla. "But we really didn't look at this as an entirely lost season. We didn't think this was a potential outcome. And we were hopeful that we would have had more events at Joe Louis Arena. ... But quite frankly, any event that would have been booked isn't the same as a Red Wings game for us. There just is not as much revenue."

The Parking Department is feeling the biggest impact because it is responsible for paying off the bonds sold to build Joe Louis Arena. Fields said the city already has closed one garage -- at First and Bagley -- and is considering selling it. The garage at Cobo Arena is open only for special events, and Fields said more changes are likely if the season is canceled.

Some family businesses, like Derderian's Anchor, have been able to rely on a large regular clientele to stave off disaster. But other family businesses have suffered because nights without a hockey game mean not as much business.

"It's still pretty harsh," said Anthony Bruce, who manages Mac's on Third near the Joe. "We're still anticipating the same loss -- somewhere between 50 and 60 percent" of business.

While that's a real sting, Bruce has looked hard to find a bright side.

"All in all, our regular business is up. People have been very supportive over the whole thing, and very sympathetic," Bruce said. "Still, when you talk about 41 games of wall-to-wall people, it's hard to compete with that."

The sting is felt beyond downtown. A lost season would exact a heavy economic toll all over southeastern Michigan.

Adding up how many megabucks millionaire players and billionaire owners haven't been able to extract from fans is one thing. Tallying the toll the strike has had on everyday workers is another.

It took less than 20 minutes Friday afternoon to find a Joe Louis Arena worker who lost his house because he couldn't keep up his mortgage payments. He says some of his coworkers are behind on their rent, too. But he is afraid to give his name, for fear of getting in trouble and losing the few events, like tonight's MSU-UM hockey game, that he's still able to work.

And if that equation is distressing, the league should multiply it by 1,000 or so, because that's how many arena workers are on hand for each typical Red Wings game.

And -- at least for now -- there are 30 teams in the league.

Even so, Wings spokesman John Hahn said, things are better here than in many NHL towns.

Because the hockey team is just one part of a large "umbrella company," no workers have been laid off because of the NHL lockout, Hahn said.

"Our ownership has been, frankly, very supportive and dedicated and loyal to the workers trying to help us," Hahn said. "We've had some normal attrition with some positions that we haven't replaced, and we've taken some people in the course of the last eight months and moved them into other positions within Ilitch Holdings.

"But other than that, there really has not been layoffs due to the lockout, although I've noticed a lot of teams have laid off numerous people."

It hasn't come to layoffs for Derderian, either, but many of his workers are getting fewer hours. Where 12 people normally work at the Anchor during a Wings home game, now he has three employees most weeknights.

If business owners can hold on until the league comes out of the deep freeze, experts say, they'll probably be all right.

Shawn O'Rourke, associate dean of graduate and Canadian programs and a professor of sports administration at Canisius College in Buffalo, N.Y., has been studying lockouts' impact.

He says whenever the game returns, you won't notice any attendance shortfalls at places like Joe Louis Arena.

Things will be tougher, however, for teams in towns where the game is not well-established.

"Casual fans, and the fans of the six to 10 bottom teams, they won't come back," O'Rourke said. "This won't be an issue where two players can bring it back -- like in baseball."

Despite his bitterness over the damage to his business, bar owner Bruce said he'll never abandon the sport.

"I love the game," he said "But when you take something pure, like a sport, and you mix money with it and make money the primary issue, well, it's very hard to forgive and forget when you take away that purity."

Derderian, who still skates in a men's hockey league at age 57, feels about the same.

And, with the NHL clearly ailing in recent years, he had hoped the two sides could come together to fix it.

"So what do they do about it?" Derderian said. "They bury their heads in the sand and flail away at each other with hockey sticks."

Derderian declined to discuss specific numbers, but said between 12 and 15 percent of his business comes from hockey games.

"That's a lot," he added. "But I know a lot of other places where that figure is over 50 percent."

Places, for example, like Mac's.

"They're killing us," Bruce said of the lockout. "I think it's rotten on both sides. ... At the end of the day, if these guys never played hockey again, they'd survive. They don't need hockey to survive. We do."

Contact JOHN MASSON at 586-469-4904 or [email protected]. Staff writers Jack Kresnak and Chastity Pratt contributed to this report.