'The Cage' is a chain link fenced, bagel-sized basketball court on Sixth Avenue at 3rd Street, across the street from Joe's Pizza and the old Waverley movie theater in the Village.
The action takes place on the court, beside the court, on the adjacent handball courts, on the sidewalk, and everywhere within the eyesight of the court. Better you should watch the next two video links than me try to explain the 'scene':
Players' website, Wikipedia, and, a game video.
A cool thing about the 'game video' is its soundtrack. Notice in the background a sound like a racquet hitting a tennis ball: whack, whack, whack. It is created by the players in the handball court next to the cage. Handball (great video link) is a city game of which tourists might be unaware, a citywide spectacle with major tournaments.
Two background information videos featuring players, coaches, and viewers, all with impressive flash and chip-on-shoulder confidence here: Episodes 1, 2.
So, you're in the Village --- go to Joe's, buy a slice, cross the street and watch some basketball, some handball, take some pictures, go over to Washington Square park to play some hustle chess, get your fortune told along the way and then apply for your I❤️NY card.
But you don't get the card until you've explored the Bronx and Harlem (Rucker Park, especially), Queens, and Brooklyn. That's where the soul players come from, says Spike Lee.
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