Fall is my favorite season. I delight in the changing leaf colors and temperate weather patterns. But what I love most is that it’s the time when the world of spectator sports seems to come into full bloom, cramming in college and NFL football as well as NHL hockey. Furthermore, the baseball world series run is also in full trajectory. And my favorites – the NCAA and NBA basketball seasons – are just around the bend.
Bars and restaurants that have been on a slow cooker during the summer months suddenly become alive with sports enthusiasts from all walks of life, as the dawn of fall sports season arrives. The sound of fans hooting and howling for their favorite team reflects the important role that spectator sport plays in fostering community spirit and economic development.
In this vein, local bars function as ‘third-places’, a concept coined by urban sociologist Ray Oldenburg. These are places where people congregate, other than at work or at home. In his book ‘The Good Great Place’, Oldenburg suggests that locales like community bars are vital to local civic connection and economic vitality.
Hot Wings and a Cold Brew
Back during my undergraduate days at The Ohio State University, a watering hole hangout called Buffalo Wild Wings & Weck (known as BW3) was an off-campus favorite of mine. It was famous for its 3.2% beer selection and blistering hot chicken wings; the hottest batch on the menu was affectionately called Three Alarm Fire.
Fast forward to almost twenty years later when BW3 morphed into what is now known as Buffalo Wild Wings, a franchised series of restaurants and bars that have become an epicenter of activity for rabid sports fans nationwide. In November of 2003, their initial public offering stock price was $8.50 per share. This price skyrocketed 35% in its first day of trading. If you had purchased shares then, you would be sitting pretty on an investment that has today realized an almost 1,600% gain on your initial investment. Just as a comparison, the S&P returned a respectable 135% over that same period.
By the way, I have a friend – a highly successful professional investor – who asked me one day back in 2010 whether I had any recommendations for stock picks. Out of my ass, I mentioned Buffalo Wild Wings. Now whenever I cross paths with her at a local Denver coffeehouse, she frequently offers to buy me a latte… which I request with a couple of espresso shots to jolt me out of the regret that I did not take my own advice and buy that darned stock.
Lest I digress, the point I am trying to make here is that bars and sports are ideal team mates for fueling a free market economy. Let’s take pro basketball as an example. It is said that during his playing days in Chicago, Michael Jordan was worth in excess of $100 million to the Windy City. I conjecture that a sizable chunk of that amount was accrued at local bars and restaurants where foot traffic swelled, both before and after games. The same effect occurred with the Chicago Cubs and the White Sox of baseball lore. “
In Cleveland, a city that has long struggled to recover from its industrial legacy, many bars celebrated the 2013 return of star basketball player LeBron James to the Cavaliers. In aggregate, this had an estimated $215 million economic impact for the city, while simultaneously employing 2,200 people. Again, places like Flannery’s – an Irish-American watering hole located only a stone’s throw from Quicken Loans Arena, home of the Cavs – are once more seeing a spike in their business, particularly in light of the team’s recent success.
Fortunes Abound at Pubs
If I had all the money in the world to purchase one business, it would be the Little Pub Company. They operate 25 neighborhood bars and restaurants in the Denver area that flow with sports fan business like a well-poured draft beer.
Many of these locales are themed towards a particular niche. My personal favorite is Wyman’s, a Chicago-themed bar that attracts loud and boisterous patrons, many of whom are from the Windy City. They feature a wide selection of beers as well as a deep dish pizza that is as good as back home. It’s quite the sardine can for a Sunday Bears game, or when the Blackhawks are in pursuit of pro hockey’s highest honor, the Stanley Cup.
For soccer aficionados (whether of the MSL or World Cup variety), Little Pub’s British Bulldog Bar is a favorite haunt. It often opens in the wee hours of the morning to accommodate the differing time zones of international soccer matches.
One of the unique strategies that sports bars employ, particularly during football season, is to cater their venue towards a particular team. On the college football front, many will reach out to alumni clubs of schools that have a massive fan base. You can count on perennial powerhouse programs like Ohio State, Notre Dame, Michigan and Texas to have a presence in most major cities. These niche audiences are a great source of grub-eating and imbibing fans who boost profits and create team pride.
But it’s not just the bars that benefit from this economic activity. Taxi cab as well as rideshare services like Uber and Lyft profit mightily from fans who may need a ride home after having a few too many drinks, whether celebrating their team’s success or drowning their sorrows. Certainly beverage companies that stock the bars with beer and liquor aren’t moaning and groaning.
I read recently that many sports economists believe this madness is a zero-sum proposition, arguing that what sports bars make in added revenue, other venues like museums lose. Sounds like they have forgotten that all of this is just a game.
Michael Scott is an independent journalist and contrarian disrupter focusing on the intersection between free markets and economic freedom. He can be reached on Twitter @biz_michael