What, if anything, will the return of MLB games do for local businesses?

Baseball restarts today — for values of “baseball” that include a universal designated hitter, starting extra-inning games with a runner on second, and a bunch of players choosing to stay home and avoid risks of infection — and that has people thinking about what it will do for the rest of the economy, specifically the sports bars and other businesses around ballparks that, we’ve long been told by sports owners and their political allies though not so much by actual economists, get a boost from having games nearby.

The week started with the New York Times, and then other New York media outlets, writing about how businesses around the Yankees‘ stadium are missing out on revenue because of canceled games, and the near-certainty that no fans will be in attendance at any games played at least through the end of this year. Most of the reporting was devoted to interviewing sad local business owners — “We definitely will not be able to survive too long without the games,” said one Bronx restaurant owner who made the extremely poorly timed decision last winter to install a bar to try to draw in post-ballgame crowds; Yankee Tavern owner Joe Bastone said his current business is down 90% from usual — though the Times did turn to architecture critic Paul Goldberger for his expert opinion on sports’ economic impact.

The obvious problem with trying to calculate the pandemic’s sports stoppage’s effects on local businesses is that it’s happening in the middle of a pandemic: New York City restaurants and bars remain closed for indoor dining and drinking, and with as many as one million city residents now unemployed, not many people are rushing out to spend money regardless. The Times article gives one nod toward the broader economic fallout of Covid, noting that “the merchants’ woes have been exacerbated by the virtual shutdown of the hulking Bronx County Courthouse up the hill from the stadium” — but even though the courts are a much bigger driver of foot traffic in the Yankee Stadium area (they’re open more than three hours a day 81 times a year, for starters), we don’t get any articles on their impact on local businesses.

Over in Cincinnati, meanwhile, we have sports bar owners hoping that even fan-less games will provide a boost to their business:

[Kitty’s Sports Grill co-owner Billy] Watson said he would be glad just to get 30 people coming through the door. Kitty’s, which is located across from Paul Brown Stadium on Third Street, just opened for dine-in service last Friday because of how slow business has been.

He estimates probably 90% of people who normally would be downtown during the week are working from home, which means fewer customers. Hours for Kitty’s are 11 a.m. to 8 or 9 p.m. during the week, depending on business; the bar stays open longer on weekends.

“Our crowds are so small.” Watson said. “I feel like our business has gotten hit hard. Some places have outdoor restaurants or established to-go business, and they are doing well, but we are downtown and we rely on people working downtown for our lunches and happy hour. We’re hoping with baseball starting Friday it will give people something to say, ‘Let’s go there to watch the game since we can’t go to it.’ We are hoping that helps.”

Not to diminish the real pain of being a business owner whose entire business model has been unexpectedly torpedoed by an unexpected public health disaster — there are some that are in an even worse position than sports bars — but in the grand scheme of things, whether people spend money on drinking while watching games in bars or on drinking while watching Netflix on their living room sofas is not a hugely significant factor in how the overall economy is doing. Never forget that when baseball went on strike in 1994, Toronto video rental stores and comedy clubs saw a big spike in their businesses, with one comedy club owner quipping he wished hockey would go on strike too.

Obviously it’s harder for other businesses to capitalize on this entertainment spending substitution effect when they’re closed too, and when you have enough people hunkering down at home it starts depressing overall spending and more people get laid off and the whole thing snowballs, and so on. But it’s still a much more complicated calculus than “lack of baseball fans is hurting America,” even if that makes for a snappier headline. Besides, at least the giant cardboard head industry is booming; I wonder if they’re hiring?

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6 comments on “What, if anything, will the return of MLB games do for local businesses?

  1. Not to fret: The decision of MLB to ally itself with Bolshevik Leninist Marxists will render all the concerns herein moot.

  2. I honestly make it a point to order our a couple of times a week just to keep particular restaurants in business. Then again I haven’t been laid off (thank god). Yes I know that most likely these restaurants would be replaced by other restaurants but I want to keep these particular ones around

    1. I do too. I don’t know if enough people are doing that to keep some of these places in business, but I will do what I can.

      Like many, I’ve taken a huge hit to income this year… but I will put in circulation what I am able to.

  3. I think the fundamental problem is that there will be very little “substitution effect” spending because most people do not have the discretionary spending income this year that they had previously (as always, a handful of people will actually be doing as well or better than in previous years, but the majority are suffering).

    I heard one of the operators of a jersey shop attached to a sports facility talking up the prospect of sports coming back and “fans from all teams coming in to buy”.

    What utter farce. There will be no fans coming to shop. There will be no marginal tax revenues generated from spectators (travelling or otherwise), and I think you can bet that so called “host” sites will be spending more to attract events than will be generated in gross (let alone net) revenues by having the athletes and support staff around.

    Sports leagues and franchise owners will make money on the sports restart. TV viewers may or may not tune in in large numbers to whatever farcical and bastardized ‘product’ the leagues will try to sell us. But the host cities and their taxpayers will be fleeced, as always.

    The sports restart is not about fans or love for the game. It is about bloodsucking leaches taking what they can get out of the lukewarm body during “these trying times”.

    It is literally never about anything else for these people (players included, although they are not the drivers of this for the most part).

    Personally, I hope all the leagues fall on their faces, have to abandon plans to resume play due to positive tests (maybe in the middle of championship series/games, when one side or the other cannot field a full team – even of replacement players) and then get sued for the full value of remaining contracts by players who contract the virus and cannot resume their careers.

    But of course, that will be a charge the taxpayers ultimately pay anyway, won’t it? It won’t come out of the billionaires end, that’s for sure.

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