Stadiums and Arenas of Canada part 2

[Berklon]

I never understood why fans get excited about players facilities in a new arena/stadium... things like the gym, players lounge, meeting room, theatre room, etc. They're great for the players, and yes - it may help the team perform better - but I personally couldn't care less about something that's not available to me.

[JHikka]

Originally Posted by MonctonRad

Indeed. We mustn't forget that the NHL is now essentially an American league, catering to American tastes and expectations.

The US is ten times the size with ten times the market. Of course it's going to be the focus.

Originally Posted by MonctonRad

Bettman doesn't want Canadian expansion (beyond perhaps Quebec City).

Bettman has no say in expansion. He only does what the Board of Govenors directs him to do. I really wish Canadians who bemoan Bettman understood this. Bettman doesn't sit around plotting the future of the league - he's directed by the teams owners and they have final say.

Originally Posted by MonctonRad

American owners don't want Canadian expansion. American media companies don't want Canadian expansion. They all know that American sports fans want to see American teams playing American teams.

Any sourcing on any of this or is this just speculation on your behalf?

If you can prove to the owners that a team in Quebec, or Hamilton, or Saskatchewan can grow the league and the league's revenues they'll be all ears. Otherwise there are other, better areas for potential growth. That's the entire point of expansion.

Originally Posted by MonctonRad

An LA Kings - New York Rangers game on TV will always generate more viewership (and more ad revenue) than an LA Kings - Winnipeg Jets game.

This is obvious.

Originally Posted by MonctonRad

The only thing that matters to the NHL BoG is money.

That's how professional, franchise-based businesses run.

Originally Posted by isaidso

There's always the CHL. Isn't it the development league for the NHL in the same way that the NCAA is the development league for the NBA?

Only 7 Canadian cities have a NHL team. There are 52 Canadian cities with a CHL team. If Canadians want more hockey they should support and watch the teams we already have instead of devoting so much attention on the NHL. The 'national' media lavishes time and money on the former at the expense of the latter. It should be the other way around but try getting media based in an NHL city to do that.

This is exactly what I say whenever possible. If Canadians are tired of bitching and moaning about the NHL the CHL is literally around the corner in every market in Canada. If you like hockey it's nearby to be supported. Always.

Originally Posted by Dr Awesomesauce

If memory serves, there were serious issues with Thrashers ownership, like, nobody actually wanted to own them or buy a ticket to watch them. At that time, I'm not sure the NHL was willing to operate failing teams as they are now. Throw in David Thomson and a relatively new arena, and there you go. And relocation is a really negative thing, to be honest. The NHL wants no part of such high profile examples of failure.

The Thrashers certainly caught the NHL and the BoG offguard. Suddenly, overnight, they lost an ownership group and guaranteed rights to a playing arena (Philips). It became very obvious over the course of a few weeks and months that Atlanta was untenable as a host and Winnipeg were more than willing to pick up the slack on that.

Originally Posted by Dr Awesomesauce

The real money is in expansion franchises. Massive amounts of dough involved that's spread around the league. Everyone feels good. Everyone's richer for it.

Along those lines, there are existing fan bases in both Quebec and Hamilton and they'd both be successful in their own right. But these are not exactly growth areas for the League. I'm really not sure having teams in those cities would change the fortunes of the NHL at all. To wit - there is no interest in expanding to those markets.

Outside of expansion fees the NHL more or less gains nothing by expanding to Quebec and Hamilton. Quebec is more obvious as there's a ready-made arena (which is fantastic, by the way) but Hamilton's rink is outdated and in need of replacing, and effectively overlaps with two currently existing markets. Quebec is likely, Hamilton is highly unlikely.

Relocations hurt market values of franchises in any sports league because it shows weakness in franchise stability. If i'm a billionaire interested in buying and operating a sports franchise i'm going to be wary of entering a league which has had five expansions in the past ten years (or whatever number you want to conjure up). If you're buying in you want to buy in to stability, guaranteed returns, with a guaranteed future. That's why the NHL is so keen on keeping the Coyotes in Arizona. Their relocation would devalue every other franchise.

Again, Canadians moan, but the NHL is much more valuable than it was 10/15/25 years ago with much more market value and a better product on ice than every before. I really don't see what the issue is other than thinking you're more important on some moral grounds.

Originally Posted by Dr Awesomesauce

Seattle? A big yes! Kansas City? Houston? Hartford? Cleveland/ Cincinnati? Serious maybes. Hamilton and/ or Quebec? Only as an absolute last resort, unfortunately.

Quebec is only a possibility if they're willing to pay the $500M for expansion if Seattle/Houston are exhausted. Houston's a more tenable market for growth, IMO. Kansas City has shown no desire, Seattle wants basketball more, and Cleveland/Cincinnati overlap with Columbus in markets that really aren't all that big to begin with.

Originally Posted by someone123

In the long run it seems to me like there is going to be a big drop in the level of interest in professional sports. Young people today are much less interested in them than middle aged and older people are now or were at the same age in the past. Sports like baseball and golf are doing particularly badly but hockey isn't doing great either.

Anecdotally I just spent two nights in bars in Ottawa watching Ottawa/Montreal and the majority of people in the bars were under 40.

[GlassCity]

Originally Posted by Berklon

I never understood why fans get excited about players facilities in a new arena/stadium... thinks like the gym, players lounge, meeting room, theatre room, etc. They're great for the players, and yes - it may help the team perform better - but I personally couldn't care less about something that's not available to me.

Vicarious, for me at least.

[Berklon]

Originally Posted by Dr Awesomesauce

It's hard to imagine another scenario like the Thrashers moving Winnipeg ever taking place again. Never say never, but I think Bettman/ the League is better prepared to deal with those sorts of issues today than he was a few years back.

Being better prepared doesn't mean they'll be able to thwart a relocation. There's only so much they can do.

If memory serves, there were serious issues with Thrashers ownership, like, nobody actually wanted to own them or buy a ticket to watch them. At that time, I'm not sure the NHL was willing to operate failing teams as they are now.

The owners of the Thrashers were losing money and no longer wanted to own the team and no one wanted to buy the team to keep them in Atlanta - so they basically forced a relocation in order to get a sale by no longer allowing the team to play in their arena.

And relocation is a really negative thing, to be honest. The NHL wants no part of such high profile examples of failure.

They may not want to be a part of it - but that doesn't mean they can stop it.

The only reason the Coyotes weren't relocated 10 years ago was that Glendale was subsidising their losses. Glendale found a loop-hole in the ridiculous lease agreement they offered the Coyotes and backed out of it. Now the NHL and the Coyotes are looking for someone else to build them an arena in order to get someone else to cover their losses. No one is biting and it looks as if the state of Arizona won't pass a bill to allow for a new arena to be built using public money.

The Coyotes have hit the end of the road and will be relocating... it's only a matter of when and where.

The Hurricanes owner can't find anyone who's willing to buy the team and keep them in Carolina. So eventually he'll get tired of waiting and the NHL will have no choice but to allow relocation.

Eventually Seattle (if they ever get approval to build an arena) and Quebec City will get teams. Don't be surprised if Portland winds up being a landing spot also.

And relocation isn't THAT negative. The NFL has had 6 relocations in the last 22 years, yet the league has grown more popular during that time frame. There's still talk of possibly another relocation or two happening in the next few years.

[Nathan]

Originally Posted by Berklon

And relocation isn't THAT negative. The NFL has had 6 relocations in the last 22 years, yet the league has grown more popular during that time frame. There's still talk of possibly another relocation or two happening in the next few years.

The main difference between the two being that NHL relocations tend to be about moving a failing team that's losing money, while NFL relocations are more about moving from one successful market to another that's a more willing extortion victim...

[Acajack]

Originally Posted by Dr Awesomesauce

It's hard to imagine another scenario like the Thrashers moving Winnipeg ever taking place again. Never say never, but I think Bettman/ the League is better prepared to deal with those sorts of issues today than he was a few years back.

If memory serves, there were serious issues with Thrashers ownership, like, nobody actually wanted to own them or buy a ticket to watch them. At that time, I'm not sure the NHL was willing to operate failing teams as they are now. Throw in David Thomson and a relatively new arena, and there you go. And relocation is a really negative thing, to be honest. The NHL wants no part of such high profile examples of failure.
.

This is all quite true, but the loss in prestige that comes from relocating money-losing franchises is counter-balanced by the cheques all the owners have to write to keep them afloat if you leave them in place.

I'd say the BoG is willing to tolerate the latter for a period, but not that long. They'll take the theoretical "prestige hit" over bleeding cash as a longer-term proposition, trust me.

The "prestige" thing is likely more a Bettman thing (not admitting failure in the Sunbelt) than it is a BoG thing. And as we all know the owners call the shots, not Bettman.

Also, it's not as if it's a secret that certain teams are losing money and lame ducks. Everyone in the sports business knows who those teams are. The NHL has more lame duck clubs than any of the big 4 American (sic) sports leagues. That's clear to everyone whether you relocate them or not. The league's prestige is already affected by some clubs' early season games played before a handful of wives and girlfriends...

[Acajack]

Originally Posted by Dr Awesomesauce

.

Along those lines, there are existing fan bases in both Quebec and Hamilton and they'd both be successful in their own right. But these are not exactly growth areas for the League. I'm really not sure having teams in those cities would change the fortunes of the NHL at all. To wit - there is no interest in expanding to those markets.

.

Wouldn't it reduce the amount of "equalization" the owners have to pay to prop up the sad sack teams?

[Acajack]

Originally Posted by Corndogger

Didn't Winnipeg and Edmonton originally get NHL teams because the NHL absorbed the old WHA? The size of the metros back then had nothing to do with it. If it did I doubt either one would have ever been considered.

Yes. Ottawa was bigger than Winnipeg, Edmonton and Quebec City but did not get into the league because it was a migration of WHA clubs but Ottawa was not in the WHA.

For many years people in Ottawa bitched that the city screwed up its chance to get into the NHL by fumbling several opportunities it had to get an WHA club (which in theory might have been admitted into the NHL with the Oilers, Jets and Nordiques).

[Acajack]

Originally Posted by SaskScraper

I'm curious to know what extra corporate support Quebec city has more than province of Saskatchewan?
..

You need to keep in mind that a team in Quebec City won't be just the team of that metro area. It will be the second team of the province of Quebec which has over 8 million people.

They will never eclipse the Habs of course but back in the old days of the Nordiques close to one third of the hockey fans in the entire province of Quebec supported the Nordiques, not the Canadiens.

That's a lot more people than simply being the preferred team of 99% of fans in a core market of 800k-1m people, with little support or interest outside of that.

One third of Quebec is 2.75 million people. Admittedly these people are not all within reach of the Centre Vidétron for a weeknight game, but they are eyeballs that sponsors can reach, consumers who buy merchandise, and they may make trips to see games a few times a season.

Bus tours from various regions of Quebec (and even NW NB) to see the Nordiques were a big thing in the 80s and 90s.

Still with this angle, the Nordiques 2.0 also won't be limited to Quebec City's corporate base. They'll dip into Montreal's as well. As in the old days when the Habs were Molson and the Nordiques were O'Keeffe, even if the latter was based in Montreal.

Vidéotron and TVA are Montreal-based media giants, but they will likely own the Nordiques if they return.

Maybe one dépanneur or grocery chain will sponsor the Habs, and another will sponsor the Nordiques. It doesn't matter where these companies have their Quebec base of operations. There will be lots of interest in the Nordiques province-wide, and especially lots of interest in the rekindled Habs-Nords rivalry. If you're a corporate sponsor and want to be there (and are shut out of the Habs sphere), you'll give your money to the Nords and your brand will be visible too.

[osmo]

Winnipeg and Quebec City are anomalies. Minus prior history in the NHL they would never be considered for teams if the history was no already there. I think we as Canadian forget how small are cities are versus American cities. Not just metros but GDP and corporate wealth as well.

Seattle, for example, has a GDP that is comparable in size to all of the Canadian metropolitan areas outside of the big 6 (Vancouver, Edmonton, Calgary, Ottawa, Toronto, Montreal).

People think the corporate money does not matter. The arena "fills up" with corporate money. The corporate dollars that buy bulk seats, suites, boxes, and by advertisements make up a large chunk of teams revenues locally. After that is the higher priced tickets which carry the team, nose bleed who buy a hot dog are just a drop in the bucket. Some cities have more nosebleed fans versus others which become problematic for teams.

Some cities where one team is the only show in town the city can rally behind it but these cities need to have a vast middle and upper class that will be the bulk of the teams support. Winnipeg has that, Quebec City likely as well, anything else though is pushing it. Saskatoon, not a chance.

[wave46]

Originally Posted by osmo

Winnipeg and Quebec City are anomalies. Minus prior history in the NHL they would never be considered for teams if the history was no already there. I think we as Canadian forget how small are cities are versus American cities. Not just metros but GDP and corporate wealth as well.

Seattle, for example, has a GDP that is comparable in size to all of the Canadian metropolitan areas outside of the big 6 (Vancouver, Edmonton, Calgary, Ottawa, Toronto, Montreal).

People think the corporate money does not matter. The arena "fills up" with corporate money. The corporate dollars that buy bulk seats, suites, boxes, and by advertisements make up a large chunk of teams revenues locally. After that is the higher priced tickets which carry the team, nose bleed who buy a hot dog are just a drop in the bucket. Some cities have more nosebleed fans versus others which become problematic for teams.

Some cities where one team is the only show in town the city can rally behind it but these cities need to have a vast middle and upper class that will be the bulk of the teams support. Winnipeg has that, Quebec City likely as well, anything else though is pushing it. Saskatoon, not a chance.

True, but corporate money is diluted in the US among the major sports leagues - the NHL, NFL, MLB and NBA all 'compete' for the same corporate sponsors. Outside of the Toronto market, the NHL is the only game in town in Canada and by far the most popular sport here (token acknowledgement of the CFL). That is what helps with making a case for our smaller cities.

[Acajack]

Originally Posted by osmo

Winnipeg and Quebec City are anomalies. Minus prior history in the NHL they would never be considered for teams if the history was no already there. I think we as Canadian forget how small are cities are versus American cities. Not just metros but GDP and corporate wealth as well.

Seattle, for example, has a GDP that is comparable in size to all of the Canadian metropolitan areas outside of the big 6 (Vancouver, Edmonton, Calgary, Ottawa, Toronto, Montreal).

People think the corporate money does not matter. The arena "fills up" with corporate money. The corporate dollars that buy bulk seats, suites, boxes, and by advertisements make up a large chunk of teams revenues locally. After that is the higher priced tickets which carry the team, nose bleed who buy a hot dog are just a drop in the bucket. Some cities have more nosebleed fans versus others which become problematic for teams.

Some cities where one team is the only show in town the city can rally behind it but these cities need to have a vast middle and upper class that will be the bulk of the teams support. Winnipeg has that, Quebec City likely as well, anything else though is pushing it. Saskatoon, not a chance.

This is true but only to a point. Following up on what wave just noted, the least valuable Canadian team in the NHL is Winnipeg. There are 10 U.S. teams less valuable than the Jets, all of them in larger markets than Winnipeg. In many cases, the markets are exponentially larger than Winnipeg.

[craner]

Originally Posted by blueandgoldguy

For those who claim Hamilton would do nothing more cannibalize the Leafs current market (and I'm sure this is largely based on self-interest for one's own market for an NHL team no matter how remote that chance is rather than any painstaking research) people who have carefully researched this (ie. sports economists) believe the team would be a top-5 revenue generator for the league. Leafs would obviously remain a top-3 generator in that scenario with the Rangers and the Habs. No cannibalization necessary.

What about the Sabres though - aren't about 70% of their season ticket holders from southern Ontario (or am I confusing this stat with the Bills) ?

[Acajack]

Originally Posted by craner

[/B]
What about the Sabres though - aren't about 70% of their season ticket holders from southern Ontario (or am I confusing this stat with the Bills) ?

Not even close for either of those teams.

It's more in the 15% range I'd say.

[Corndogger]

Originally Posted by wave46

True, but corporate money is diluted in the US among the major sports leagues - the NHL, NFL, MLB and NBA all 'compete' for the same corporate sponsors. Outside of the Toronto market, the NHL is the only game in town in Canada and by far the most popular sport here (token acknowledgement of the CFL). That is what helps with making a case for our smaller cities.

Cities that have three or four or more major league teams also have a lot of corporate money to go after for sponsorship funding. A place like Seattle could easily support NBA and NHL franchises just like they do their MLB and NFL teams. Once they get a modern arena they'll probably get both.

What the NHL needs most is a huge TV contract. What they have now is a lot better than the old days (something Bettman deserves credit for) but is peanuts compared to what the NFL gets.

[Nathan]

Originally Posted by Acajack

This is true but only to a point. Following up on what wave just noted, the least valuable Canadian team in the NHL is Winnipeg. There are 10 U.S. teams less valuable than the Jets, all of them in larger markets than Winnipeg. In many cases, the markets are exponentially larger than Winnipeg.

It's not really because of the dilution of corporate money though... It's because most of those markets don't really care about hockey (Buffalo being the exception... and possibly New Jersey). The NHL is a VERY distant 4th in terms of the Big 4.

The Canadian teams also generally went down in value this year. It was mostly thanks to the Canadian $, but that's the risk you face when your revenues are in $CDN, but your biggest expenses are in $US.

There's also the fact that generally, American Sports dollars outpunch Canadian.

Take Cleveland (CSA: 3.5 mill, GDP: ~125B) vs Toronto (CMA: 6 mill, GDP: ~325B). According to the latest Forbes valuations of the big 4...

NFL: Cleve - $1.85B

MLB: Cleve - $800M, Tor - $900M
NBA: Cleve - $1.2B, Tor - $1.125B

NHL: Tor - $1.1B

In leagues where they both have a team, it's about neck and neck, but Cleveland's NFL value far outperforms Toronto's NHL value (which are the comparative top dogs in each market). The NFL does have huge league centred deals, but it still seems that the size requirements of a city are lower in the US than they are in Canada.

For more perspective... The most valuable teams in the big 3 leagues are each worth more than all of Toronto's teams combined. Knicks: 3.3B, Cowboys: 4.2B, and Yankees: 3.4B. It's a different "ball game" () down there.

And for reference, I'm not picking on Toronto, I'm using it as the example because it has the most teams and is Canada's largest/richest city.

[Acajack]

Originally Posted by Nathan

It's not really because of the dilution of corporate money though... It's because most of those markets don't really care about hockey (Buffalo being the exception... and possibly New Jersey). The NHL is a VERY distant 4th in terms of the Big 4.

The Canadian teams also generally went down in value this year. It was mostly thanks to the Canadian $, but that's the risk you face when your revenues are in $CDN, but your biggest expenses are in $US.

There's also the fact that generally, American Sports dollars outpunch Canadian.
.

Sorry I wasn't clearer. I wasn't really talking about the dilution of corporate money either, and had local interest in hockey in mind, just like you.

Spectator sports in general (especially the ones that Americans are truly into) are just a much bigger deal in the U.S. than in Canada, as you say.

[Jaws]

Originally Posted by Nathan

In leagues where they both have a team, it's about neck and neck, but Cleveland's NFL value far outperforms Toronto's NHL value (which are the comparative top dogs in each market). The NFL does have huge league centred deals, but it still seems that the size requirements of a city are lower in the US than they are in Canada.

Each NFL team receives roughly $225 mil in tv revenues/year. This revenue plays no small role in the valuations of the teams. Essentially, they don't have sell a single seat to turn a profit.

[Acajack]

Originally Posted by Corndogger

Cities that have three or four or more major league teams also have a lot of corporate money to go after for sponsorship funding. A place like Seattle could easily support NBA and NHL franchises just like they do their MLB and NFL teams. Once they get a modern arena they'll probably get both.

What the NHL needs most is a huge TV contract. What they have now is a lot better than the old days (something Bettman deserves credit for) but is peanuts compared to what the NFL gets.

The reality though is that the NHL isn't going to see anything more than an incremental value increase for its U.S. TV contract if it adds teams in the Southern U.S. like Las Vegas or Houston, etc. Seattle might help a bit as interest might be more widespread there, but the bottom line is that TV networks and advertisers aren't stupid - they know that just because the NHL has teams in Phoenix and Florida doesn't mean the league is giving them millions of eyeballs in those places.

The contract value and advertising rates are discounted accordingly.

[Nathan]

Originally Posted by Jaws

Each NFL team receives roughly $225 mil in tv revenues/year. This revenue plays no small role in the valuations of the teams. Essentially, they don't have sell a single seat to turn a profit.

Yup, that's why I mentioned the league centred deals. That gives a basic minimum value to the teams' worth, which we know is something less than $1.5 B, which is how much the least valuable team (the Bills) is worth. Many teams, based in smaller cities than Toronto are worth well in excess of $2B and $3B. It's a completely different situation down there.

Another good example of the differences in the markets is the reaction Katz got when he mulled moving the Oilers to Seattle if the new arena didn't get built (a common and pretty much accepted/expected tactic in the States). Katz had to backtrack very quickly, apologize for the comments, and reiterate the connection of the Oilers to the city of Edmonton.