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VOL. 126 | NO. 212 | Monday, October 31, 2011

Waiting For The Tip

Labor dispute keeps Grizzlies off the court after magical season

By Sarah Baker

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Great seasons end.

FedExForum had never before seen the electricity that was generated during the Memphis Grizzlies’ rousing playoff run last spring. The team beat the San Antonio Spurs and took the Oklahoma City Thunder to seven games in the conference semifinals before faltering. But with the NBA in the midst of a lockout, the city is left waiting for another chance to see its lone professional franchise create more basketball magic. (Photo: Joe Murphy)

Great cities endure.

That’s not just one of the Memphis Grizzlies’ new marketing slogans. Capitalizing on last season’s success and building an enduring franchise are aspirations for the organization as it copes with the reality of the NBA lockout and the ongoing dry spell of professional hometown hoops.

Downtown Memphis has been deprived, or will be deprived, of thousands of visitors during what would have been the Grizzlies’ entire preseason and the first two weeks of the regular season – eight home games in total. That’s thousands of revenue-generating patrons at FedExForum and the Beale Street entertainment district lost to date, and the debilitating impact on business’ bottom lines is expected to grow as the lockout continues.

The 2010-2011 season marked the pinnacle of the Grizzlies’ 10-year history in Memphis. With “Believe Memphis” growl towels, yellow headbands and “Beale Street blue” jerseys galore, the city rallied around the franchise as it won its first playoff game and first playoff series while holding its own as the underdog.

“Last year we saw the potential of what having a high-performing NBA team can do for a city, what it can do for a Downtown, what it can do for a city’s spirit,” said Paul Morris, president and CEO of the Downtown Memphis Commission. “It’s like you get something that you’ve never had before and it tastes really good and then it’s taken away from you, you really want it bad.”

It’s not just a game of hoops that’s been taken away. The Grizzlies’ economic impact is $223 million annually, according to a September 2010 study performed by the Greater Memphis Chamber. The total is derived from operations of FedExForum and the Memphis Grizzlies, visitor and spectator spending, and special event spending.

Of that total, the Grizzlies generate $5.3 million in local tax revenue, $11,056 of which is direct hotel/motel bed tax. So far, the Westin Memphis Beale Street – one of four preferred hotels of the Grizzlies – hasn’t seen any notable changes in business.

“At this point, all of the teams that typically stay with us have signed contracts and booked to stay with us,” said Westin general manager Patrick Jordan. “In the event that more games will be canceled, I’m sure that those teams will contact us and they will either cancel or postpone their stays with us. But they’re moving forward as if this is going to get resolved.”

The Westin has the luxury of relying on other revenue streams – such as food and beverage, parking, gift shop sales, etc. – to compensate when an area like room reservations are faltering, Jordan said. But the loss of home games at FedExForum won’t only hurt the Westin’s bottom line but its employees as well.

“When the Grizzlies play and we typically have a team stay with us, we staff to accommodate the visiting team because they have a lot of equipment that comes in and out,” Jordan said. “So that’s not happening right now. Surely, if the entire season was canceled, we would do some other things to try to have some other people come stay with us in the absence of the teams.”

Staffing will also be affected at bars like Silky O’Sullivan’s, which often caters to large pre- and post-game crowds. And less money coming in translates to less disposable income for wait staff to then spend in the community, said Silky controller Dennis Flanagan.

“It’s its own tier system,” Flanagan said. “It affects us, it affects our employees, it affects the parking. Anybody that spent a dime when the Grizzlies were here will not be spending that dime now, no matter what that dime was spent on. It’s not there, so we’re not going to staff extra. It’s a lose-lose all the way around. There are no winners in this.”

Indeed, the hallow effect of Grizzlies’ absence expands far into the community. FedExForum and the Grizzlies combined support 1,534 jobs, both directly and indirectly.

Brian Bazar, general manager of Alfred’s on Beale – a popular pre- and post-game watering hole thanks to its proximity to FedExForum – said his restaurant is trying to weather the storm as best it can.

“I guess someone from the outside would see this as something between the owners and the players, but for us, it’s affecting what my staff makes in tips and obviously our revenue,” Bazar said. “Just to have that kind of yanked out from under us definitely has hurt us. We’re going to have to just stick it out and see where we end up.”

But Memphis isn’t just feeling the sting financially. While professional basketball doesn’t generate as much revenue as the NFL, successful sports teams – both on the college and professional levels – can provide an overwhelming boost to the city’s psyche, said Tim Ryan, assistant professor at the University of Memphis’ Health Sport Sciences.

“You can see it right now in Detroit – they had the Tigers doing well, they had Lions doing well,” Ryan said. “It’s a city that has a high unemployment (rate), and certainly a little bit of low morale. A sports team can at least be something positive that a city can look forward to.”

Yet with each passing day, the NBA is making it harder and harder to keep that anticipation afloat. During the lockout all franchises are prohibited to use any images of its players, arguably the most powerful marketing tool around because of the league’s star power.

For the Grizzlies that means fan favorites like Zach Randolph, Marc Gasol, Tony Allen and Rudy Gay are removed from the public eye, potentially depleting the buzz and goodwill that took a decade to create. It also means longtime and new fans must look elsewhere to spend their disposable income.

“A lot of people, if they’re not going to games, they’re probably not just sitting around, they’re still going to be going out,” Ryan said. “Someone’s going to benefit – it might be more shopping, it might be more people going to Tigers games, it might be more people going to movies. Or what it could be is more people traveling out of town, and then that is bad for our economy because then they are taking their money and going to Florida or Chicago or New Orleans.”

What the Grizzlies can do, however, is capitalize on last season’s success and hope that the momentum continues to build during the lockout and remains intact when the season begins. That’s why the Grizzlies have maintained their community profile at events like block parties, the Cooper-Young Festival, Zoo Brew and the Mid-South Corn Maze, said John Pugliese, senior director of marketing and communications for the Grizzlies.

It’s also why new billboards and other marketing materials have appeared around town.

“We are very excited about the launch of our current advertising campaign that extends across multiple mediums including print, billboard, Web and social media that acknowledges the brilliant playoff run that all of Memphis enjoyed together last spring,” Pugliese said.

It’s an investment that is vital to the Grizzlies’ brand, if and when the lockout is over, said Arnold Perl, who chaired the New Memphis Arena Public Building Authority of FedExForum during its construction in the early 2000s.

“You have to look at it by what’s best for the league, not what’s best for the LA Lakers, the New York Knicks, or the Dallas Mavericks. This is about creating a competitive balance for all teams within the NBA so that the league is stronger going forward. Because this may be the last time that you can fix it.”

– Arnold Perl

Perl likens the lockout’s solution to the authority’s mission while it oversaw the largest capital works project in the history of Shelby County – to assemble the best team, on time, on budget. Or, in simpler terms, “get it right.”

“The simple solution for the owners is to get it right once and for all, to create a competitive balance in the league,” Perl said. “You have to look at it by what’s best for the league, not what’s best for the LA Lakers, the New York Knicks, or the Dallas Mavericks. This is about creating a competitive balance for all teams within the NBA so that the league is stronger going forward. Because this may be the last time that you can fix it.”

Memphis fans need to understand what’s at stake now, rather than after the fact, Perl said. What’s happening now – a debate over a new collective bargaining agreement between the owners and the players – isn’t just limited to one season. The new CBA will have a long-term impact on the Memphis Grizzlies, especially as it relates to the impact on small market teams.

When Forbes magazine began its list of “Most Miserable Cities” a few years back and identified Memphis, one of the criterions was sports. But now, thanks to the Grizzlies’ memorable 2010-2011 season, the city has slipped in those rankings and is feeling slightly less “miserable.”

What’s more, Memphis’ position in this year’s “Best Sports Cities” from Sporting News is an impressive 35 out of 271, beating cities like Milwaukee, San Antonio, Portland and Charlotte. Last year’s ranking was 47.

“We in Memphis have a vested interest to make sure the Grizzlies can operate under a collective bargaining agreement that affords them the opportunity to be competitive in the years ahead,” Perl said. “Let’s take last year’s theme – believe. Let’s believe that the league will get this right so that we can later believe in what we see on the court.”

PROPERTY SALES 62 288 2,619
MORTGAGES 52 197 1,783