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Stanley Cup are used as handles on a beer taps as bartender James Vine pours a drink at the Shark Club sports bar in downtown Vancouver, B.C., on Thursday September 13, 2012. (DARRYL DYCK)
Stanley Cup are used as handles on a beer taps as bartender James Vine pours a drink at the Shark Club sports bar in downtown Vancouver, B.C., on Thursday September 13, 2012. (DARRYL DYCK)

Business of sports

Put the chicken wings back in the freezer, businesses brace for lockout Add to ...

An electronic clock is prominently featured in a front window of the Wheat Sheaf Tavern in downtown Toronto, counting down the time to the first game of the season for the Maple Leafs.

With the NHL expected to lock out its players Saturday night, the clock is also a reminder of the economic challenges that could be in store for businesses and their employees who rely on the NHL to spur activity. These businesses include bars, merchandising outlets, food-service corporations, even the companies that publish souvenir programs.

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Some of them will have to lay off, or reduce the hours of, employees, many of them part-time. These are the innocent victims of the looming lockout, with no say in the negotiations as the NHL and the NHL Players’ Association try to slice up a revenue pie that amounted to $3.3-billion (U.S.) last season.

John Teti, co-owner of the 7,500-square-foot Shark Club bar and grill in downtown Vancouver, near Rogers Arena, has already laid off a manager and two other staff due to the NHL situation.

“You cut back hours and try to keep everybody in play,” Teti said. “We should have been hiring three weeks ago and we didn’t. Nobody likes to do layoffs. You want to hire people. People understand. There’s no secret to what’s happening.”

To sell their chicken wings and beer, bars and restaurants attract clientele by showing games live on wide-screen televisions. For Melrose Cafe & Bar in Calgary, the timing of this latest round of NHL labour woes couldn’t be worse.

The 2004-05 lockout took a 20-per-cent bite out of business, said Tony Johanson, Melrose’s marketing manager. That came after the restaurant, which seats 800 and is on the city’s so-called Red Mile (where thousands converged during the Flames’ run to the Stanley Cup final the previous season), became ground zero for hockey fans.

Now, the popular eatery is facing a double whammy if the players are locked out. In July, Melrose opened a second location, at the Stampede Grounds, near the Scotiabank Saddledome, where the Flames play.

“It’s horrible timing in terms of opening a new location,” Johanson said. “It’s no doubt, we’d be losing out on a lot of business.”

Johanson said the addition of Thursday-night games to the NFL schedule will offset some potential losses, and the restaurant will look for ways to attract customers by promoting soccer and Ultimate Fighting Championship matches.

“We’re just going to hunker down,” Johanson said, adding that some customers are already grumpy. “People are mad at [NHL commissioner Gary] Bettman. People are mad at the owners, but some people are mad at the players too. The millionaire versus billionaire thing,” he said.

Bleachers Sports Bar & Café, a popular watering hole for Winnipeg Jets fans near the MTS Centre, bustles before and after most games. The same can be said for the Wheat Sheaf and hundreds of other restaurants in Toronto. George Georgopoulos, a co-owner of the Wheat Sheaf, said there’s a 20-per-cent increase in business at his bar on those nights when a Leafs game is televised, and that makes a big difference.

“Our success in business is reliant on the NHL and we do really well from the games,” Georgopoulos said.

No one is certain how much money might be lost in the event of a lockout. Most agree it will be a substantial amount.

“It’s hard to say,” Jack Deschauer, vice-president of LEVICK, a strategic communications firm in Washington, D.C., said. “Without a doubt it would be in the tens of millions of dollars in lost revenues throughout all of the NHL cities.”

The Boston Business Journal estimated that $850,000 to $1-million (U.S.) is generated per game outside TD Garden when the Bruins play home games.

“It’s not just the direct impact of not having hockey games that affect people,” said Richard Horrow, a sports business analyst based in southern Florida. “The indirect impact to other businesses is also quite significant.”

Arenas and teams are likewise bracing employees for the consequences of a lockout. The Vancouver Canucks have imposed a four-day work week on 600 full and part-time employees, starting next week.

“Everybody is chipping in until we get a new agreement,” said Victor de Bonis, chief operating officer for Canucks Sports & Entertainment, which owns the Vancouver Canucks.

Geoff Molson, principal owner of the Montreal Canadiens, advised the team’s administrative employees two weeks ago that they would be put on a reduced work schedule in the event of a labour disruption. A 20-per-cent pay cut, the reasoning goes, obviated the need for staff cuts.

“There are no layoffs in the plan,” Canadiens vice-president Donald Beauchamp said. “Everyone is going to be working a four-day week.”

The measure affects office employees, arena workers, security guards and support staff at the Bell Centre.

The Canadiens are like most other NHL clubs in that the employees who work in the hockey department – scouts, coaches and operations staff – will be paid according to the work-stoppage clauses in their contracts. In some cases that could mean they’ll be working for 50-per-cent pay, which was the case for most coaches in the last lockout.

Tha Habs are going ahead with their annual charity golf tournament next week. The team’s alumni will fill in for the roster players at the event, which typically raises $500,000 for the Canadiens’ children’s foundation, and season-ticket holders have already been informed that their ducats will be honoured in the event of a truncated season.

Bob Hunter, vice-president and general manager of the Air Canada Centre in Toronto, said the first casualties of a lockout would be the 2,000 or so part-time workers employed as ticket-takers, ushers and food and beverage workers.

Most of the hamburgers, hot dogs and sandwiches consumed within the ACC during events is provided by Sysco Canada.

“Our contract with them over a year would certainly be in the millions of dollars, and a good portion of that would be for the Leafs,” Hunter said.

Jay Rowan, the Sysco representative who handles the ACC account, was circumspect. “It’s going to affect all the restaurants and bars – and livelihood – of pretty much everybody across Ontario that broadcasts Leaf games,” he said.

Kevin Davis, president and chief executive officer of Bauer Performance Sports Ltd., which manufactures hockey equipment, said his company will not really feel the effects of a lockout.

“There’s 600 to 650 guys in the NHL, but there’s six million kids worldwide playing hockey,” Davis said. “From an overall business perspective … if there’s no NHL season, that’s a small impact to our revenue.”

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