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Phoenix LXXII: Send in the Clowns

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Old
02-19-2013, 11:17 AM
  #251
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Originally Posted by azaloum90 View Post
If that is the case I see both Hartford and Quebec city being expansion cities in the next 5 years, capping the league off at 32 teams. It only makes sense at this point.

Seattle is a brand new market... Hartford and Quebec are not only proven, but in 5 years they could be good options (new arenas, major renovations, etc)
Uh, I'm not sure I follow you. Those markets are not proven, they couldn't support their teams enough for them to stay.

I still don't see why Seattle is a better market. I actually don't see why any of these places are good markets since nobody is equipped to take an NHL team and wont' be for quite a while.

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02-19-2013, 11:17 AM
  #252
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17206 at the game last night. I was there. It was a full house. I would also say it appeared like maybe 2.5k to 3k had on Flame's gear (give or take). I know a lot of folks who winter down here from Calgary who go to Coyote games regularly and support the Coyotes except for when the Flames play. Not as many Flames jerseys as I expected. Not nearly as much as Wings, Blackhawk or Nucks jerseys when those teams come in to play.

I scratch my head why a sell out on a Monday, and next week on a Thrusday for the Wild game it appears less than 12k tickets have been sold? Attendance is a mystery for me as I do believe there are enough NHL fans in the Valley to support the team, but the proof is in the pudding and to date, that belief of mine is groundless. It would have been interesting to see, had the NHL given an ultimatium of say 12k STH's or an average attendance of over 16k, if the market would have responded. Instead, we just limped along (well the market that is - the team did its job by winning).

I will say this, I do enjoy seeing an NHL game with a full house rather than 10k fans. I will enjoy the last season of NHL hockey in Arizona. I hope the team makes the playoffs again.

And please god, send the team to QC and not Seattle. Unless expansion is a sure thing, the NHL is being stupid by not relocating the team to QC, which under the new NHL economic system, is a far more secure location than untested Seattle.

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02-19-2013, 11:28 AM
  #253
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Originally Posted by goyotes View Post
17206 at the game last night. I was there. It was a full house. I would also say it appeared like maybe 2.5k to 3k had on Flame's gear (give or take). I know a lot of folks who winter down here from Calgary who go to Coyote games regularly and support the Coyotes except for when the Flames play. Not as many Flames jerseys as I expected. Not nearly as much as Wings, Blackhawk or Nucks jerseys when those teams come in to play.

I scratch my head why a sell out on a Monday, and next week on a Thrusday for the Wild game it appears less than 12k tickets have been sold? Attendance is a mystery for me as I do believe there are enough NHL fans in the Valley to support the team, but the proof is in the pudding and to date, that belief of mine is groundless. It would have been interesting to see, had the NHL given an ultimatium of say 12k STH's or an average attendance of over 16k, if the market would have responded. Instead, we just limped along (well the market that is - the team did its job by winning).

I will say this, I do enjoy seeing an NHL game with a full house rather than 10k fans. I will enjoy the last season of NHL hockey in Arizona. I hope the team makes the playoffs again.

And please god, send the team to QC and not Seattle. Unless expansion is a sure thing, the NHL is being stupid by not relocating the team to QC, which under the new NHL economic system, is a far more secure location than untested Seattle.
President day + Canadian team?

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02-19-2013, 11:47 AM
  #254
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And please god, send the team to QC and not Seattle. Unless expansion is a sure thing, the NHL is being stupid by not relocating the team to QC, which under the new NHL economic system, is a far more secure location than untested Seattle.
We don't really know the NHL's preference for putting a team in one place over another, but if the NHL's preference is Seattle, I wonder how much of a factor that having Vancouver close by is swaying that choice. Keep the team in the U.S. , but have a lot of Canadians close by to help support or at least go to games.

Just my belief, but I think the NHL looks at expansion maybe being a more sure thing in Canada, at least in getting an owner to buy into expansion.

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02-19-2013, 11:54 AM
  #255
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Uh, I'm not sure I follow you. Those markets are not proven, they couldn't support their teams enough for them to stay at the time of their relocation... on top of that, the fans in the areas reacted like little girls finally realizing that their "boyfriend" finally dumped them for serious at that time... and now they are upset. Bottom line, the economy and attendance of both of those markets were limited at the time of the move... with Connecticut continuing to be one of the richest states, and Quebec now desperate to get an NHL team, I think there are the perfect pieces to the puzzle here

I still don't see why Seattle is a better market. I actually don't see why any of these places are good markets since nobody is equipped to take an NHL team and wont' be for quite a while.
No no, see you have this wrong. They "were" bad markets... but clearly bettman and co have pissed off fans in these areas so much that they are going through leaps and bounds just to be seen (why else would QC be building an arena WITHOUT promise of an NHL team?). Both places have temporary homes for teams to use at this moment, both places have both the money and the fan base to support a major league team.. AND....
BOTH teams have had teams ripped out from under them. One has to wonder whether bettman and co did all these relocations just to land a TV contract, followed by "gracing" fans with the return of their teams...

Dunno. Just been something that's been in my head lately.

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02-19-2013, 12:16 PM
  #256
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Originally Posted by goyotes View Post
Attendance is a mystery for me as I do believe there are enough NHL fans in the Valley to support the team, but the proof is in the pudding and to date, that belief of mine is groundless. It would have been interesting to see, had the NHL given an ultimatium of say 12k STH's or an average attendance of over 16k, if the market would have responded. Instead, we just limped along (well the market that is - the team did its job by winning).
I was also intrigued by what could have been done. Quite a while ago, someone had posted a question similar to "what would it take for the Coyotes to be successful in Glendale?" And while ultimately I arrived at the same conclusion the rest of the investing world seems to have found, the closest I could come was:

- Reduce the venue capacity for Coyotes games to approx 10,000
- Tarp off the upper level with the exception of 3,000 seats at center ice
- Increase the retail price of upper level tickets from $40 to $55*
- Persist the retail price of lower level at $75/$115/$215*
- Seat split: 3000 @ $55; 4000 @ $75; 1500 @ $115; 1500 @ $215
- Avg Ticket Price would be approx $96
- Eliminate all admission price reductions, give aways, and discounts

The Coyotes brand has been significantly harmed, I think the shortest path to reviving the brand would have been creating demand. Instead of devoting time and effort to trying to fill 17,000, why not concede that the draw is 10,000 and focus on premium customers. I understand that displacing the "blue collar fan" would have poor optics but, at this point, what have the NHL/Coyotes done that has good optics? You might even be able to market the fans you are displacing under the guise of "this is in the best interest of saving the team". Perhaps cross promote it as "Fox and Coyote" or something to drive viewership on the regional sports network for those who no longer could afford the ticket prices.

Once the higher price point is established, the opportunity to sponsor premium seating areas would likely be more lucrative, allowing for additional revenue opportunities. Eliminating all admission discounts would protect the integrity of the premium price. The thought behind this is that without a core of premium customers, this business isn't going to fly anyway. So why not just put it in the lap of the market. If it were demonstrated that the market would consume the product at that price point, then the probability of investor interest would likely increase dramatically.

But the idea derails pretty quickly (if it wasn't already an absurd idea to begin with). The inventory for premium sports entertainment products is insane in the market. It's not just the competing interest of the NBA/NFL either. It's the Phoenix Open devouring sponsors and premium products, auto racing, etc. I was also quite surprised to see that majority of the Spring Training venues are essentially brand new -and- they all include premium/sponsor seating products; several even have suite offerings.

In the end, I ended up right where I was before: the market is over saturated and not viable for the NHL business model. There is no magic bullet to fix it. A potential owner could slog along, perhaps even coming close to a profit on occasion; provided Glendale was providing a large scale subsidy. But who would be willing to put up $100MM or so for that opportunity? So far, the answer is no one.

* all seat numbers and dollar figures approximate. There is no accounting for Club Seats, which I believe are SRP $85.

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02-19-2013, 12:27 PM
  #257
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Originally Posted by azaloum90 View Post
No no, see you have this wrong. They "were" bad markets... but clearly bettman and co have pissed off fans in these areas so much that they are going through leaps and bounds just to be seen (why else would QC be building an arena WITHOUT promise of an NHL team?). Both places have temporary homes for teams to use at this moment, both places have both the money and the fan base to support a major league team.. AND....
BOTH teams have had teams ripped out from under them. One has to wonder whether bettman and co did all these relocations just to land a TV contract, followed by "gracing" fans with the return of their teams...

Dunno. Just been something that's been in my head lately.
there is only one market that has actually proven it has enough fans with enough money to support an NHL franchise and that is hamilton, when 12,000 fans put down ST deposits of $500 in 2007. the viability of all other cities is little more than speculation, including especially seattle.

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02-19-2013, 12:31 PM
  #258
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Originally Posted by GuelphStormer View Post
sorry, i know seattle is becoming the favourite, but count me among those who consider seattle long on potential and short on practicality. the unproven market and ownership unknowns easily place seattle 3rd on a list of immediate relocation sites, behind qc, hamilton and possibly even behind gta2 playing out of the acc until the motoroladome gets built.

if this team moves to seattle it will only be because PKP has refused to take them this year and someone at the BoG table still resents hamilton. it would be a risky decision to put this team in seattle this year ... but hey, you know what they say about jumping out of the frying pan into the fire.

I think QC had the inside track but once the Seattle billionaires started having meetings about a new arena, which everyone has openly stated would be better served (almost a requirement) with an NBA and NHL team, I think the NHL's chances there turned to very serious. Having an arena and a pool of possible owners with very deep pockets make Seattle an obvious choice. It also has a net influx of transplants from traditional hockey markets. It certainly is more vibrant as a business and high tech market than anything outside of California (which has three NHL teams).

The arena initiative puts Seattle at the top of my list as a potential new market.

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02-19-2013, 12:47 PM
  #259
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The arena initiative puts Seattle at the top of my list as a potential new market.
for October 2013?

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02-19-2013, 12:58 PM
  #260
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17206 at the game last night. I was there. It was a full house. I would also say it appeared like maybe 2.5k to 3k had on Flame's gear (give or take). I know a lot of folks who winter down here from Calgary who go to Coyote games regularly and support the Coyotes except for when the Flames play. Not as many Flames jerseys as I expected. Not nearly as much as Wings, Blackhawk or Nucks jerseys when those teams come in to play.

I scratch my head why a sell out on a Monday, and next week on a Thrusday for the Wild game it appears less than 12k tickets have been sold? Attendance is a mystery for me as I do believe there are enough NHL fans in the Valley to support the team, but the proof is in the pudding and to date, that belief of mine is groundless. It would have been interesting to see, had the NHL given an ultimatium of say 12k STH's or an average attendance of over 16k, if the market would have responded. Instead, we just limped along (well the market that is - the team did its job by winning).

I will say this, I do enjoy seeing an NHL game with a full house rather than 10k fans. I will enjoy the last season of NHL hockey in Arizona. I hope the team makes the playoffs again.

And please god, send the team to QC and not Seattle. Unless expansion is a sure thing, the NHL is being stupid by not relocating the team to QC, which under the new NHL economic system, is a far more secure location than untested Seattle.
I think it's great that they are selling out now. Great for the team, fans, and media to see a full house.

HOWEVER should those prices be lifted $35-$75 would the sellouts continue?

Should the purchase incentives stop would the sellouts continue?

Not to be the bearer of bad news but both would likely be answered with a firm NO. The problem isn't the lack of fans, it's the discounts and rebates and sales the fans receive. Most NHL teams could survive on 10,000 fans every night almost no problem. In Glendale however the market won't support higher prices for the luxury of being able to watch NHL live, for the simple reason that they have become too accustomed to the current pricing for 15 years.

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02-19-2013, 12:59 PM
  #261
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I think QC had the inside track but once the Seattle billionaires started having meetings about a new arena, which everyone has openly stated would be better served (almost a requirement) with an NBA and NHL team, I think the NHL's chances there turned to very serious. Having an arena and a pool of possible owners with very deep pockets make Seattle an obvious choice. It also has a net influx of transplants from traditional hockey markets. It certainly is more vibrant as a business and high tech market than anything outside of California (which has three NHL teams).

The arena initiative puts Seattle at the top of my list as a potential new market.
They dont even have a confirmation for the new arena just yet, and the NHl told many insiders that they will never play a game at Key arena. Once thos two issues are settle thne Seattle will have a chance.

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02-19-2013, 12:59 PM
  #262
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CF -

I'm not sure what the business model looks like, but the Coyotes clearly need something in the range of another $20M in revenue. How they get that from the gate and related sales is beyond me. But, an average ticket price of $40 isn't going to do it, even with a string of sellouts. Prices need to average around $75 (like the Suns' tickets do), and I don't think that will happen any time soon.

That's one of the problems with the NHL business model which puts too much emphasis on the gate. MLB, NFL and NBA could never survive under that model, and teams would be relocating left and right if they were also gate driven leagues. Places like Phoenix could survive if the NHL had significant sources of revenue outside the gate. But given that isn't how the NHL operates, every team needs to be healthy and contribute to revenue or there will be pressure to relocate teams.

One doesn't need to look far to understand why increased revenue sharing was a non-starter for the NHL owners under the current CBA round of negotiations. Slight modifications yes...but nothing like how more healthy leagues address revenue sharing when they have 10X's the amount of TV revenue to start with.

You have to ask yourself, long-term, and even in healthy markets, will the NHL business model last and what future changes may make even currently stable organizations run into trouble.

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02-19-2013, 01:16 PM
  #263
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Originally Posted by ajmidd12 View Post
I think it's great that they are selling out now. Great for the team, fans, and media to see a full house.

HOWEVER should those prices be lifted $35-$75 would the sellouts continue?

Should the purchase incentives stop would the sellouts continue?

Not to be the bearer of bad news but both would likely be answered with a firm NO. The problem isn't the lack of fans, it's the discounts and rebates and sales the fans receive. Most NHL teams could survive on 10,000 fans every night almost no problem. In Glendale however the market won't support higher prices for the luxury of being able to watch NHL live, for the simple reason that they have become too accustomed to the current pricing for 15 years.
This to me has always been the number one concern any new owner would have to address. How do you wean people off of paying at a certain rate for a certain product, when you have to significantly raise prices to break even?

I have the deepest respects for any STH of the Coyotes ( or any team for that matter ) , but I know for a fact that if I lived in Phoenix I would never buy STs when I know I can get into any game I want at a reduced price. Not to be a slight on the market, but that's just how it is. A new owner coming in and doubling prices and getting rid of any discounts, would be a very bold move.

And it's not just Phoenix. How would most markets respond if the owner increases priced by 25-40% one year over the previous.

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02-19-2013, 01:27 PM
  #264
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This to me has always been the number one concern any new owner would have to address. How do you wean people off of paying at a certain rate for a certain product, when you have to significantly raise prices to break even?

I have the deepest respects for any STH of the Coyotes ( or any team for that matter ) , but I know for a fact that if I lived in Phoenix I would never buy STs when I know I can get into any game I want at a reduced price. Not to be a slight on the market, but that's just how it is. A new owner coming in and doubling prices and getting rid of any discounts, would be a very bold move.

And it's not just Phoenix. How would most markets respond if the owner increases priced by 25-40% one year over the previous.
Exactly my point.

Any market would succumb to losses if this occurred, which is quite ironic as the point to raising prices is to make money, unless it's a hockey fanatic market like Winnipeg the fans would stay away.

However the other edge of the sword is if the new owner raised the prices 5-7% per annum, unfortunately he would have to incur some very hefty losses until such time where the market balances out financially and the end justifies the means. Either scenario means losses for the team in turn paints a bleak picture for the markets viability.


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02-19-2013, 01:31 PM
  #265
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for October 2013?
I think the decision will come down to when the NHL decides it can/should move the Coyotes. There are several things in play, moving parts if you will, that will lead them to make their priorities in a manner that may not be readily apparent to us casual observers.

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02-19-2013, 01:36 PM
  #266
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I think it's great that they are selling out now. Great for the team, fans, and media to see a full house.

HOWEVER should those prices be lifted $35-$75 would the sellouts continue?

Should the purchase incentives stop would the sellouts continue?

Not to be the bearer of bad news but both would likely be answered with a firm NO. The problem isn't the lack of fans, it's the discounts and rebates and sales the fans receive. Most NHL teams could survive on 10,000 fans every night almost no problem. In Glendale however the market won't support higher prices for the luxury of being able to watch NHL live, for the simple reason that they have become too accustomed to the current pricing for 15 years.
Quote:
Originally Posted by goyotes View Post
CF -

I'm not sure what the business model looks like, but the Coyotes clearly need something in the range of another $20M in revenue. How they get that from the gate and related sales is beyond me. But, an average ticket price of $40 isn't going to do it, even with a string of sellouts. Prices need to average around $75 (like the Suns' tickets do), and I don't think that will happen any time soon.

That's one of the problems with the NHL business model which puts too much emphasis on the gate. MLB, NFL and NBA could never survive under that model, and teams would be relocating left and right if they were also gate driven leagues. Places like Phoenix could survive if the NHL had significant sources of revenue outside the gate. But given that isn't how the NHL operates, every team needs to be healthy and contribute to revenue or there will be pressure to relocate teams.

One doesn't need to look far to understand why increased revenue sharing was a non-starter for the NHL owners under the current CBA round of negotiations. Slight modifications yes...but nothing like how more healthy leagues address revenue sharing when they have 10X's the amount of TV revenue to start with.

You have to ask yourself, long-term, and even in healthy markets, will the NHL business model last and what future changes may make even currently stable organizations run into trouble.

Goyotes makes the point I was going to make. A major professional team in the US cannot survive on gate alone, even with average to the top end ticket pricing.

If the Leafs garner ~$2 MM per game -- and this is the best in the league -- that equates to mid $80s MM in gate. The reality is that the stronger markets are yielding $1-1.5 MM per game in gate receipts. Of course, the stronger markets then have stronger media contracts, sponsorships, and more STHs. Revenue transfer is meant normalize the revenue distribution curve--- not to make markets that lack all of the above somehow viable.

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02-19-2013, 01:42 PM
  #267
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Goyotes makes the point I was going to make. A major professional team in the US cannot survive on gate alone, even with average to the top end ticket pricing.

If the Leafs garner ~$2 MM per game -- and this is the best in the league -- that equates to mid $80s MM in gate. The reality is that the stronger markets are yielding $1-1.5 MM per game in gate receipts. Of course, the stronger markets then have stronger media contracts, sponsorships, and more STHs. Revenue transfer is meant normalize the revenue distribution curve--- not to make markets that lack all of the above somehow viable.
Then where are they supposed to make their revenue besides gate? The Coyotes currently pick up part of the TV deal, naming rights, merchandise, food & drink at the game, and gate. Yet this still isn't enough to be close to breaking even.

In order for this to work pricing will have to be raised substantially and not just at the gate.

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02-19-2013, 01:50 PM
  #268
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The arena initiative puts Seattle at the top of my list as a potential new market.
I agree with this. Under the assumption that Seattle closes on the NBA relo, I consider Seattle being the next market (relo or expansion) to be about as close to a lock as you can get without Bettman making an actual announcement.

 
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02-19-2013, 01:55 PM
  #269
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CF -

I'm not sure what the business model looks like, but the Coyotes clearly need something in the range of another $20M in revenue. How they get that from the gate and related sales is beyond me. But, an average ticket price of $40 isn't going to do it, even with a string of sellouts. Prices need to average around $75 (like the Suns' tickets do), and I don't think that will happen any time soon.
I couldn't figure out how to do it. A lot of people who are smarter and better informed than me took a look and, to date, they couldn't figure out how to do it either. I do recall that there was once a member of this forum who claimed that he was smarter and better informed than everyone. Ironically, he contended that the market was perfectly viable. I guess time has a way of separating the wheat from the chaff.

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02-19-2013, 02:01 PM
  #270
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who says they actually think that?
Judging from the fact that this whole thing has dragged out for years now it seems like they think that.

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02-19-2013, 02:03 PM
  #271
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I agree with this. Under the assumption that Seattle closes on the NBA relo, I consider Seattle being the next market (relo or expansion) to be about as close to a lock as you can get without Bettman making an actual announcement.
this is true.. but Bettman also likes to reward people who play by his rules.. which means keep your mouth shut and do what I say. Winnipeg did that and now Quebec City is doing the same...

...one of the issues for seattle is ownership... assuming the Seattle NBA deal closes that wont happen for at least another month...and then you have until May to find an owner that is willing to pay 170 mill or more on a team that will have to pay rent on the arena and doesnt collect the arena revenues... and will have only a few short months to sell 12k plus season tickets in a new market... not to mention renovations at the key arena where the new owner will likely take a big binancial hit for a few years. Now compare that to Quebec. So even though the NHL might prefer Seattle the reality is its not practical for Seattle to land both an NBA and NHL team at the same time with seperate owners and have both playing next year.. I just dont see it happening

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02-19-2013, 02:03 PM
  #272
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Then where are they supposed to make their revenue besides gate? The Coyotes currently pick up part of the TV deal, naming rights, merchandise, food & drink at the game, and gate. Yet this still isn't enough to be close to breaking even.

In order for this to work pricing will have to be raised substantially and not just at the gate.
The US three big brothers all have substantially greater TV revenue. I think part of the NHL's plan was to expand the footprint to non-traditional markets to chase the TV revenue $$$. It has worked, but with only very limited success. The problem is that outside of Canada, even in strong US NHL markets, hockey is pretty much a fringe sport that is facing competition that will relegate it to #5, 6 or 7 in strong US markets over the next 20 years as soccer and extreme sports grow more popular with kids.

The NHL needs to figure out a way to make hockey better on TV, or to at least command 2 or 3 Xs the TV revenue it currently produces. When NBC is talking about being happy with a 1.5 share for the weekly NHL game, you have to be concerned. I suspect golf does better than that most weeks.

Face it, the NHL has problems as a league that go well beyond the Coyotes experiment.

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02-19-2013, 02:16 PM
  #273
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Originally Posted by ajmidd12 View Post
Then where are they supposed to make their revenue besides gate? The Coyotes currently pick up part of the TV deal, naming rights, merchandise, food & drink at the game, and gate. Yet this still isn't enough to be close to breaking even.

In order for this to work pricing will have to be raised substantially and not just at the gate.

I'm not making an argument that they 'can' do it, or that the other pieces aren't there, big/small, etc.

The focus was on attendance and ticket prices. First order of business--- by itself, it's only about HALF of what's needed. Revenue transfer can breach some of the gap, but it cannot make up for a lack of significant revenue for all the other local streams.

Furthermore, attendance and ticket prices are good indicators of market interest and what the market will bear in terms of pricing. The other items all follow on from there, with perhaps the corporate support of season tickets having some other dynamics to it aside from pure interest in the team/sport.

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02-19-2013, 02:18 PM
  #274
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Judging from the fact that this whole thing has dragged out for years now it seems like they think that.
ah, but arenas are not built in a day ... especially ones in provinces full of corruption, poutine and stylish fans ...

im simply suggesting that the NHL has not, for at least two years now, had any real intention of actually selling the team to a buyer in phoenix and has priced it accordingly.

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02-19-2013, 02:20 PM
  #275
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In the "No ****, Sherlock" category... the optics for relocation pertaining to Seattle (NHL) will be more clear once the March 1 deadline with the Sac Kings comes and goes.

Again, I understand the urge and eagerness of the folks in QC, GTA (including Hamilton) that this franchise is ripe for plucking and relocating but also, find the understanding enough to realize that the Seattle situation has symmetries that do seemingly place it at the top of the list.

* Hansen stands to lose $80M from Seattle towards the Arena if there's no NHL team.

* The League will want to keep it's "US TV/Broadcast Footprint" integrity

* Understanding that we all agree that Key Arena is not "suitable" for long term temporary housing, but it is short term anyway. So as "ugly" as Key Arena may appear to you, me, QC, Hamilton, Markham, etc. it is still an exceptable temp home per Bill Daly. Suitable to the new owner? Short term pain, long term gain?

* League will prefer to extract expansion monies from GTA/QC rather than a relo...

So again, for about the fifth time... IMO if the NBA nixes the Kings sale to Hansen or gives no promise of expansion to Seattle in the next 2 years then yes, definately QC should take receivership of the franchise if they are being relocated.

It is my understanding that per the Hansen/Seattle Arena Agreement, they only need the guarantee that a franchise is coming, thru either scenario, for it to proceed. And if my understanding of the verbiage in the Agreement is accurate, it states NBA or NHL pertaining to Key Arena usage. Based on that interpretation, if the NBA awards expansion and gives it a timeframe on when, then it is plausible that an NHL team (in this case the Coyotes if being immediately relocated) can play in the Key while the main one is being built.

Certainly open to correction and/or ridicule if my interpretation is incorrect.


Last edited by Major4Boarding: 02-19-2013 at 02:28 PM.
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