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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

Forbes: America's Most Vulnerable Sports Cities

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Old
03-12-2017, 12:05 PM
  #1
Hoek
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Forbes: America's Most Vulnerable Sports Cities

Gonna try to bring this back on topic by linking a Forbes article of America's Most Vulnerable Sports Cities, which tries to quantify overextended markets.

https://www.forbes.com/sites/chrissm.../#1789632c2ca0

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Leading the list is Raleigh, NC. Though the home of the Carolina Hurricanes ranks around the middle of the pack in market size and wealth, Raleigh also sits dead last in local fan spending. That may have something to do with it being one of the country's most expensive sports markets. The 'Canes are the only game in town, and hockey isn't cheap - a family of four has to spend $340 to attend a single home game.

Following Raleigh are New Orleans, Cleveland, Tampa and Buffalo. All four of the markets are relatively cheap compared to the other cities, but they're also among the smallest and poorest of the bunch. In fact, NOLA sits last in wealth (median household income: $47,390) while Buffalo is the nation's smallest market (568,000 people for each of the city's two teams).

To determine the nation's most vulnerable pro sports cities, we looked at four different categories for each of America's 40 Big Four sports markets: Expense (how expensive it is to go to games in the market), Loyalty (how much fans have been willing to spend on their local teams), Size (how many people there are for each team in the market) and Wealth (how wealthy local residents are). The cheaper the games, the more fans are willing to spend, the more people there are and the richer they are all make a market more secure against an economic downturn.

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03-12-2017, 12:09 PM
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I moved this to it's own thread since it deals with far more than MLS expansion in the Twin Cities.

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03-12-2017, 12:33 PM
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It's an interesting idea but cities are so distinct that you can't lump them all into the same basic categories. Every city has its own unique challenges. And I wouldn't base loyalty solely on amount spent by fans. I don't know how much Sabres fans spent 2013-2015 but the fact that they kept showing up is all you need to know about their loyalty. The question for these markets should be "Will the fans keep spending money if the teams are bad ?" If the answer isn't a definitive yes then current success and subsequent fan spending shouldn't automatically make them a stable market.

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03-12-2017, 12:40 PM
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True that. Tampa seems to be ranked low on loyalty just because the Bucs and Rays really haven't been deserving of any lately, for instance. Our income is definitely a bit worrisome though I think it's been improving, and stuff is still cheap so that mitigates it some.

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03-12-2017, 01:01 PM
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Quote:
Originally Posted by Hoek View Post
True that. Tampa seems to be ranked low on loyalty just because the Bucs and Rays really haven't been deserving of any lately, for instance. Our income is definitely a bit worrisome though I think it's been improving, and stuff is still cheap so that mitigates it some.
Tampa is one of the poorer metro areas in the top 50... it's just that it doesn't have any disaster pics like some midwest cities so people don't talk about that.

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03-12-2017, 08:02 PM
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By what measure does Buffalo only have 538,000 people?
Erie County has almost 1,000,000.
Also wouldn't worry about Tampa, Demographics is on their side there, Buffalo and Cleveland, maybe not.
edit: They Divided the metro by 2, but they still neglected the fact that significant support comes from Southern Ontario and Rochester.

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03-12-2017, 09:12 PM
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Quote:
Originally Posted by Bruins1233 View Post
By what measure does Buffalo only have 538,000 people?
Erie County has almost 1,000,000.
Also wouldn't worry about Tampa, Demographics is on their side there, Buffalo and Cleveland, maybe not.
edit: They Divided the metro by 2, but they still neglected the fact that significant support comes from Southern Ontario and Rochester.
They take the population of the metro area and divide it by the number of teams. Not a very good way to judge but Forbes isn't very good at this stuff so I'm not surprised.

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03-12-2017, 09:17 PM
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iWhat is the point of this? Cleveland and Pittsburgh in the top 10. I don't see any of the teams from those cities ever moving.

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03-12-2017, 10:39 PM
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So they don't factor in surrounding counties?

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03-13-2017, 08:13 AM
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Seattle is ranked as the nations most economically secure sports city per the article. The city that lost it's basketball team in 2008.

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03-13-2017, 08:16 AM
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Originally Posted by Hockeygod66 View Post
Seattle is ranked as the nations most economically secure sports city per the article. The city that lost it's basketball team in 2008.
So they have more money to spend then.

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03-13-2017, 09:09 AM
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This needs to be considered in the Hurricanes thread too.

While Raleigh is not a "poor" area, it's not "rich" either. There just aren't that many jobs that pay $150k plus in the area, but lots that pay in the $100-$120k range.

It even goes farther up the chain to the leading "corporations". Raleigh and Triangle CEOs, while extremely wealthy, make nothing compared to the average across the country. This plays into the whole "local buyer" question with the Hurricanes.

There was a story the other day in local media stating that the Raleigh housing market is booming with homes less than $350k. Larger homes are sitting vacant because developers can't find buyers because there isn't enough "wealth" to afford the more expensive places.

It's the picture postcard of the professional white collar lower upper middle class, with just enough disposable income to make the area look like a goldmine, but reality is, cost of entertainment relative to value is a huge part of the equation there.

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03-13-2017, 09:24 AM
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Quote:
Originally Posted by Hockeygod66 View Post
Seattle is ranked as the nations most economically secure sports city per the article. The city that lost it's basketball team in 2008.
St. Louis smack dab in the middle right after losing their NFL team.


I always get a chuckle when Pittsburgh ranks fairly highly on these 'vulnerable' lists given that none of the three teams there are remotely vulnerable...the city couldn't support an NBA team on top of the three it does support, but that's not what vulnerable means. Then again I don't think spreadsheets understand what 'loyalty' means either...seems to be just another data point in favor of market size (LA 6th most loyal...c'mon...that only makes sense when looking at raw attendance figures).

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03-13-2017, 09:33 AM
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Quote:
Originally Posted by NCRanger View Post
It's the picture postcard of the professional white collar lower upper middle class, with just enough disposable income to make the area look like a goldmine, but reality is, cost of entertainment relative to value is a huge part of the equation there.
If pro sports can't appeal to people making $100-$120K because they're too poor, then that's a pro sports problem and not a market problem.

One of the premises of the article is that the entire industry is on a bubble. The entire argument you're making here is evidence that the industry, not the market, is due for a painful correction.

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03-13-2017, 09:57 AM
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Quote:
Originally Posted by tarheelhockey View Post
If pro sports can't appeal to people making $100-$120K because they're too poor, then that's a pro sports problem and not a market problem.

One of the premises of the article is that the entire industry is on a bubble. The entire argument you're making here is evidence that the industry, not the market, is due for a painful correction.
Yes and no. While in general I agree with you, the biggest problem with the Raleigh market SPECIFICALLY, is getting people who have three and four generation loyalty to Original 6 and other long time teams to spend lots of money on a mediocre to poor team, which directly competes against their teams.

When the Hurricanes are winning, as has been seen, people will spend that money. When they aren't, the money is spent elsewhere.

My actual point is, that in Raleigh, the market just doesn't have the huge corporate presence that buys up the lower 6 rows at center ice for $300 a pop. Those seats are being bought by fans who are making nice incomes, but not nice enough to really afford those seats without cutting back in other areas. The market is relying on lower upper middle class people to buy 41 games a year. That's just not a workable model long term, when the average cost for attending a game is not all that cheap, even compared with the rest of the league.

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03-13-2017, 10:31 AM
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Originally Posted by Big McLargehuge View Post
I always get a chuckle when Pittsburgh ranks fairly highly on these 'vulnerable' lists given that none of the three teams there are remotely vulnerable...the city couldn't support an NBA team on top of the three it does support, but that's not what vulnerable means.

Yet the Penguins have almost moved on multiple occasions. The early 90s Pirates weren't exactly stable either from what I recall although that's admittedly going back a while.

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03-13-2017, 11:09 AM
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Yet the Penguins have almost moved on multiple occasions. The early 90s Pirates weren't exactly stable either from what I recall although that's admittedly going back a while.
That had to do with Civic Arena not being designed to be an NHL arena and being able to generate the revenue necessary. The Pens didn't even have their offices in that building because there was no room.

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03-13-2017, 11:14 AM
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That had to do with Civic Arena not being designed to be an NHL arena and being able to generate the revenue necessary. The Pens didn't even have their offices in that building because there was no room.
Yeah the Civic Arena was one of those few cases where "we need a new arena or we'll move" was entirely warranted. They were bleeding money playing in that place.

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03-13-2017, 11:43 AM
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Originally Posted by AdmiralsFan24 View Post
They take the population of the metro area and divide it by the number of teams. Not a very good way to judge but Forbes isn't very good at this stuff so I'm not surprised.
Not saying Buffalo isn't a weak market, I would be surprised if the Bills are still in Buffalo in 15 years, but they are overstating it a bit.

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03-13-2017, 01:05 PM
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Originally Posted by Hockeygod66 View Post
Seattle is ranked as the nations most economically secure sports city per the article. The city that lost it's basketball team in 2008.
The team was bought and moved because the city wasn't interested in building them a new arena. The team never lacked support.

The previous owner was upset by that outcome, for the record.

In terms of economics, the area is booming, among the top in the country.

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03-13-2017, 03:53 PM
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Yet the Penguins have almost moved on multiple occasions. The early 90s Pirates weren't exactly stable either from what I recall although that's admittedly going back a while.
Arena problems for the Penguins and ownership problems for the Pirates, both issues firmly in the rear-view mirror now (well, Nutting is a terrible owner, but he is an actual owner, which was the problem after Galbreath got old). Hell, I'll throw ownership issues on the Pens' side too, given the team would have gotten an arena in 2001 (alongside the Steelers & Pirates) without issue had Howard Baldwin not taken cash instead and skipped town. The city is also significantly stronger economically than it was even 12 years ago, thanks to being able to reinvent itself in a way that other Rust Belt markets have struggled to do (industrial -> education/healthcare/robotics).

Regardless both instances are well in the past and irrelevant to discussing the market's health today. The Penguins have an arena that doesn't bleed them dry and the Bucs have an owner with actual money who isn't on his death bed. All 3 Pittsburgh teams are supremely secure as of March 2017. That may change 15 years down the road, as it has before, but for now it'd be inconceivable for any of the three to leave in the near future.

Generally speaking it is stuff like that, arenas/stadiums and ownership problems, that cause teams to leave more than markets outright failing anyway. I cited St. Louis losing the Rams before and that falls far more on the wishes and desires of Stan Kroenke than it does on the fans of St. Louis. Seattle losing the Sonics is another example (city/state wouldn't pay for a new arena and the new ownership group just up and moved a popular team).


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03-14-2017, 05:11 PM
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Yeah, I figured Pittsburgh would be a safe market. The penguins and Steelers are among the class of their leagues. The Pirates in baseball are starting to take a step back but are relatively safe.

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03-19-2017, 03:43 PM
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Quote:
Originally Posted by Hockeygod66 View Post
Seattle is ranked as the nations most economically secure sports city per the article. The city that lost it's basketball team in 2008.
The city that chose to build new stadiums for its other two major league teams and not the third.

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03-19-2017, 05:32 PM
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Yeah, I figured Pittsburgh would be a safe market. The penguins and Steelers are among the class of their leagues. The Pirates in baseball are starting to take a step back but are relatively safe.
The MLB Pirates set an all time franchise attendance record just a couple of years ago, relocation won't ever happen. Even if the current ownership decided to sell, there would be interested parties like the Pens owners eager to step in. The relocation issue was real when it looked like PNC Park wasn't going to be approved.

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03-20-2017, 11:41 AM
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Seattle is ranked as the nations most economically secure sports city per the article. The city that lost it's basketball team in 2008.
So today Seattle has 2/3rd of the Major teams it had in 2008, and like 15% more people, so there is 1.73x more people/sports team in Seattle than there was in 2008.
So its quite obvious why it is way down the list.

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