Explaining Southern California's economy

NBA game cancellations could show strength of LA's diversified entertainment economy

Staples Center

Eric Richardson/Blogdowntown

Vehicles pass by a darkened Staples Center on October 10, 2011.

As my new KPCC colleague Eric Richardson reported this morning, NBA commissioner David Stern has decided to cancel the first two weeks of the season, in the face of an ongoing labor impasse. This is going to cost money, in terms of lost ticket sales and the spending that people engage in when they attend games. If more games are cancelled, the costs are going to be significant.

Here's the math, for the sacrificed Lakers and Clippers games at the Staples Center, assuming the cancellation extends throughout the rest of 2011:

  • $30 million in ticket sales
  • $40 million for everything else
  • Grand total: $70 million

As Richardson points out, the $30 million is less relevant than the $40, because the latter is money that won't go to Downtown businesses (the $30 million represents "sunk" costs — money already expended that can't be recovered). The $40 million will get spent elsewhere in the city.

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