Economics lesson by reader Ed N.

Big time email from reader Ed N. He sent us this email in regards to our post about how much money the city Pittsburgh will lose.

A major clarification that needs to be stated is the following.

The City of Pittsburgh losing 82 million is incorrect. It is the local business that will be losing the money.

Ed's email after the jump.

 

" I follow the blog pretty regularly and just want to say its always entertaining and one of the first places I go for Pens news/coverage.

That being said, your post on the lockout's economic impact needs a little clarification.  This topic totally deserves attention, but I just think the post needs to be clarified a bit.  First, the City of Pittsburgh isn't losing $82 million, City businesses are. 

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The City itself can only lose tax revenue, so it will lose out on Hotel Occupancy Taxes, Amusement Taxes, Parking Fees/Taxes, and lower income taxes that result from anyone who lives in the City and works at (or around) Consol during Pens games, which is in that $750K – $1 Mil range your post stated. (Another loser in the tax revenue game is the County, they lose out on the drink tax and the 1% sales tax.)

But the spending figure that Rossi quoted of $2.1 a game and $82 over the season isn't being lost by the City, but by City businesses. Also, if the $2.1 does in fact include ticket sales than the majority of that $2.178 million figure IS ticket sales.  Assuming a sellout crowd 17,087 and an average ticket price of let's say $100, you're talking about $1.7 million/game in ticket sales alone. If the average ticket price was over $63 than at least half of that figure comes from ticket sales on sell-out nights. So while that $82 million figure sounds high, over half of it is being lost by the Organization that voted to create the work stoppage.

(No idea on what average ticket price is or how the ones available online are calculated so I took a guess based on personal experience. This article has it at $147, which I thought sounded high, but I buy cheap seats so who knows.)

I'm all for showing the impact the lockout will have on small businesses, hotels, and the service sector workers who make a living because the Pens exist, but I don't think that the Penguins organizational losses should be lumped in with the losses of the dude who makes/sells/serves pizza and beer to hungry and thirsty fans who now don't exist. 

long time reader, first time emailer"

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Bank city on this email. So maybe the $82-million figure is split between several different entities?

Either way, a fuck-ton of cash is about to go byeeeeeeeeeeee.

 

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