Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW

No hockey game? Let’s visit a museum

Marketplace Contributor Dec 7, 2012
HTML EMBED:
COPY

No hockey game? Let’s visit a museum

Marketplace Contributor Dec 7, 2012
HTML EMBED:
COPY

National Hockey League players and owners have been negotiating nonstop this week to end a lockout that has dragged on since October. The league has already been forced to cancel 422 games, and if the two sides don’t reach an agreement soon, they might have to cancel the entire season. 

According to NHL commissioner Gary Bettman, the league is losing between $18 million and $20 million a day. But what impact is the lockout having on local economies? New York Rangers fan Caroline Coburn offers some insight.

She is one of the biggest hockey fans you will ever meet. Coburn has Rangers stuff all over her house and her office. She attends six to eight games a year and watches the rest on TV. She even dreams about hockey players. But one recent Saturday, Coburn wasn’t settling in for a long night of pucks and checks. Instead, she was at the New York Historical Society on New York’s Upper West Side. 

“You know, I live on the Upper West Side, and I have meant to come [here] for several years, but I never actually got it together to go,” Coburn says.

In the last two months, Caroline’s been spending money on lots of things that she wouldn’t normally. She paid $15 for the ticket to the historical society, and earlier in the week, she went to a Broadway show.

Economists call this kind of behavior the “substitution effect,” and they say that it’s prevalent when sports leagues go on strike or a team leaves a city.

“We just don’t see 20,000 people every night sitting, huddling at home, not doing anything,” notes Victor Matheson, a sports economist at College of the Holy Cross in Massachusetts.

Of course, there are business winners and losers. Moneris, a company that tracks credit and debit card information, released a study this week about the effects of the lockout in Canada. In Winnipeg, where the NHL Jets are the main sports draw, Moneris found that sales at bars and restaurants near the rink are down more than 20 percent. Meanwhile, the Manitoba Theater, Royal Winnipeg Ballet and local cinemas have all reported an uptick in ticket sales from the same time last year.

Matheson says this is the substitution effect at work. “When we go back and look at the economies of cities that have lost sports teams, what we find is no compelling evidence that strikes have had any negative impact,” he notes.

Still, that’s cold comfort for hockey fans like Coburn. Visiting the New York Historical Society isn’t “the same thrill I get when the Rangers win in overtime,” she says.

The substitution effect may work on the economic level, but there’s no replacement for a fan’s favorite sport.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.