The economic consequences of professional sports strikes and lockouts

The National Basketball Association (NBA) lockout of 1998-1999 resulted in the cancellation of a significant number of games. According to the claims made by proponents of sports-driven economic growth, cities with NBA franch ises should experience significant negative economic losses from this work stoppage because of the lost spending in and around basketball arenas durin g this event. Although it will be several years before adequate data exist for a careful ex post evaluation of the effects of the lockout, an examinat ion of the impact of past work stoppages in professional football and baske tball can shed some light on the potential impact of the NBA lockout as wel l as the viability of professional sports as engines of economic growth in cities. The parameter estimates from a reduced-form empirical model of the determination of real per capita income in 37 Standard Metropolitan Statist ical Areas (SMSAs) over the period 1969-1996 suggest that prior work stoppa ges in professional football and baseball had no impact on the economies of cities with franchises. Further, the departure of professional basketball from cities had no impact on their economies in the following years. These results refute the idea that attracting professional sports franchises repr esents a viable economic development strategy.