NHL lockout costs Pittsburgh area economy $2.1M for each home game lost
Amy Dilday and Harry Sage live in different states and have never met, yet both planned to spend money in Pittsburgh this holiday weekend.
The NHL lockout, in its 67th day, placed those plans on ice. Their canceled trips cost two city hotels and several restaurants and shops about $3,000 in expected revenue this week.
This week marks “the unofficial start to hockey season in Pittsburgh,” said Dilday, 45, of Sylvania, Ohio, who attends about six Penguins home games every season.
“I told my sister, ‘They usually play two games around Thanksgiving, so let's go to Pittsburgh for four days, see the games, and we can do Christmas shopping at the stores,” Dilday said. She planned to cook a turkey dinner Thursday at the kitchenette inside her room at the Cambria Suites.
She canceled that four-night stay at the hotel next door to Consol Energy Center.
An average Penguins home game is worth about $2.1 million to the region, according to a study from the tourism bureau VisitPittsburgh. The Penguins usually collect between $1 million and $1.3 million in revenue, which leaves restaurants, hotels and other business to share anywhere from $800,000 to $1.1 million.
The NHL canceled games through Nov. 30, and the Penguins will have lost out on 11 home dates by then. If negotiators don't reach a new labor deal — the NHL and its Players' Association are to meet again Wednesday in New York — the league will cancel games through Dec. 15.
Sage, 39, a Uniontown native living in Maryland, scrapped his two-night reservation at the Hilton Doubletree, Downtown. His early Christmas gift to his two sons was going to be their first Penguins game, and a chance to “skate at the ice rink in (PPG Place), just like they heard about their parents doing last year.”
The lockout began when the contract expired Sept. 15. The NHL has lost an estimated $600 million, deputy Commissioner Bill Daly said. Revenue hit a record $3.3 billion last season, but leaders expect financial backlash from disappointed fans and sponsors, Daly said.
No North American pro sports league had lost a season to a labor dispute before a lockout wiped out the 2004-05 NHL campaign. The NHL rebounded to average 95 percent capacity and land a long-term TV deal with NBC Sports worth $2 billion.
A second lost season in eight years could permanently damage hockey in strong markets such as Pittsburgh, said Lynn Lashbrook, founder of Portland-based Sports Management World Wide.
“I call it a fiscal cliff on ice,” he said. “It's real, and we're heading there.”
Businesses are feeling the impact in Western Pennsylvania.
“The hotel industry in Pittsburgh is strong, but we've seen impact on both our occupancy and food/beverage revenues,” said John Hannon, COO of Horizon Hospitality, which operates the Cambria Suites.
Corporate sponsors such as Dick's Sporting Goods declined to address the impact on their businesses.
A deal between the team and Oakwood-based Cellone's Bakery ended after last season. The last lockout coincided with the first year of that contract, and Cellone's vice president of sales Joe DiCenzo said the canceled season “was rough” for the bakery.
“There is more behind a sponsorship than selling a certain amount of product in the arena,” he said. “It also generates sales in the grocery stores because of the advertising aspect. You can't make that up. You just don't get your full dollar.”
The Penguins have not laid off employees and have no plans to cut salaries, though radio and TV broadcasters, like the players, are not paid during the lockout.
Penguins games on Root Sports last season averaged an 8.7 local rating —the percentage of available TV audience for Western Pennsylvania and parts of Ohio and West Virginia. That mark was highest for any NHL or NBA team.
Root Sports will lose about $50,000 for each of the 23 games canceled.
The 550 members of SEIU Local 188 – the union representing Consol Energy Center ushers, security and cleaners – have gone from angry to complacent, union President Robert Fazio said.
“They can't do anything about it,” he said. “Why get your hopes up? Our guys think both sides are being (jerks).”
“There are people disgusted,” said Paul Elphinstone, an usher at Penguins home games for 14 years who uses his game checks to “buy presents for the grandkids.”
Retail stores take a hit because the lockout will impact Black Friday and perhaps the bulk of the December holiday shopping season.
“Christmas is when we do our big Penguins items – the specialized jerseys, and the hats and hoodies,” said Carla Jeke, who operates Perani's Hockey World in Scott. “The rest of the year it's only about 10 percent because youth hockey is so big, but at Christmas, it's going to be down if they aren't playing.”
Rob Rossi is a staff writer for Trib Total Media.