The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
National Post: Jets are back with a vengeance thanks to fans
Nothing would change, since salaries are tied to revenue. If everyone charged $100 a ticket, there would be a $100m salary floor and we'd still have teams in bankruptcy.
Huh? Attendance would be even worse in some markets if they were charging what they are in Winnipeg.
Anyway I forgot to ask. Why do you say Winnipeg would have to be more successfull than Carolina?
Because Carolina:
--Has around 80% capacity.
--Needs revenue sharing/deep playoff run to break even/slight profit.
--Does not have a stellar on ice record (ie, mediocre product especially when you have National Champions of College Basketball to compete with)
--Has the lowest ticket prices in the League.
Carolina is above treading water level (mainly thanks to the Cup run), but if Winnipeg achieves the above with the market they are in (3 times smaller than Raleigh and considerably less corporate sponsorship), then I don't think they will last that long.
Its not as great a feat as you all think. This success is currently riding the back of the long term marketing and ticket contracts combined with the initial hype. As people have said, in 5 years lets revisit and see how many advertisers etc are willing to renew long term again.
And I am one of the "haters" against Winnipeg. But it was never tied to the city's passion ir fanbase, its tied to the fact that the Canadian-US exchange rate being so close is providing a revenue "bubble" to the Canadian teams. And just like the internet and housing "bubbles", they eventually burst. And that's basically it, things WILL NOT stay this way. Either our US economy rebounds and increases the exchange rate or the economy continues to tank and hockey becomes least of our problems.
There's almost no imaginable scenario where the current financial state of the league remains status quo long term. And just ask Ottawa about having a better team in a bigger market and arena and still having to file for bankruptcy due to high debt that needed paid in USD, not CD, like all NHL contracts are.
Nothing stays the same forever, you're right. However, based on America's record- low interest rates, huge deficits and national debt, combined with high oil prices which Canada just happens to be one of the leading producers of, the exchange rate will not revisit the levels of the 90s - early 2000s for long time, probably never. If anything, the canadian dollar will remain at par or higher than the US dollar for the forseeable future.
There is also the matter fo revenue-sharing in case the unthinkable happens. Something that did not exist in Jets version 1.0.
I was pulling for Winnipeg to get a team back, and am very happy to see their success so far, but..... was anyone expecting anything less? Don't think anyone, even the most cynical anti-Canadian prairie person, would've thought that they wouldn't sell out for at least a few years.
The real test is down the road, 10+ years from now. If there's still widespread support and they're selling out if, perhaps, they're continually missing the playoffs and it turns out that Winnipeg ends up being a market that free agents avoid like the plague. Or even if the Canadian dollar takes another nose dive.
I think Winnipeg's back in for the long haul, but that's the real test. I think that even Saskatoon could thrive as a hockey market for a few years before the economic realities of supporting an NHL team catches up to them and the team starts hemorrhaging money, and that's the test for Winnipeg. Is it large enough to permanently support an NHL team?
Again, I think so. The point I'm just making is that the story of whether or not Winnipeg's a success isn't going to be determined by the first couple years, but a decade or two from now. Flash in the pan or long-term fiscal stability?
The thing is, contrary to some other markets we wont mention, when the team will be bad for a while people there will still go watch the games, might not be sellouts, but there will never be 12000 people or less. Having loss their team for 15 years, people in Winnipeg will cherish their team no matter what, like in Québec City.
yup, after many of years of sub-mediocre on-ice performance in the 80's, the fans of Toronto began giving on the team. I remember kids growing up in the 80's laughed at the leafs and were not fans of the team. It's happening again by the way.
This thread is freaking funny. Talking about how Winnipeg might be in need of help in the future.
Today we have, what 4 or 5 teams bleeding the NHL dry?
Imagine if all teams were charging what Jets fans are now paying, damn, we'd have 9 or 10 teams in trouble. Imagine if the revenue sharing scheme (which gets a good chunk of good old Canadian dollars) ceased to exist. On a level playing field the Jets and all Canadian teams help keep the league in cities where 2 tickets, 2 hotdogs , 2 cokes and free parking costs y'll $50.00.
So basically you're saying the NHL would implode if all the teams started to ignore supply/demand principles?
I can't say I disagree with that one
Like it isn't now? Some teams have priced their tickets so low, they have absolutely no hope of actually making money. Which probably means they already are ignoring the principle of supply and demand....
Like it isn't now? Some teams have priced their tickets so low, they have absolutely no hope of actually making money. Which probably means they already are ignoring the principle of supply and demand....
Well you just said that raising prices drives down attendance, so it's not clear to me why the teams in question would raise prices. It sounds like they're doing the rational thing by keeping prices low in order to generate ancillary revenue.
Perhaps they should give the $11 million in subsidies they received from provincial and city government back?
The Thrashers set an expansion record for attendance their first season...
It doesn't matter how many butts are in the seats it is the revenues that those butts generate.
Were the Thrasher's average ticket prices amongst the top in the league during the 1st season?
If they were it was sure a quick fall from the top.
I for one can't wait to get out of my TPA for my 4 lower bowl Jets season tickets. the coach is boring, the part owner billionaire is never at home games and Big Dipper chews tobacco.
I could care less if we were 0-82, I would never give up my seats and will gladly pay a 3% increase each and every season.
Last edited by blues10: 03-09-2012 at 04:27 PM.
Reason: grammar
Well you just said that raising prices drives down attendance, so it's not clear to me why the teams in question would raise prices. It sounds like they're doing the rational thing by keeping prices low in order to generate ancillary revenue.
That wasn't me, that was some numbers guy, though I don't doubt for a second that it's true, but keeping prices low doesn't generate ancillary revenue if leaves teams in the red no matter what. Teams should worry less about attendance and worry more about revenue. Raise tickets prices to the point where you could at least theoretically make money, then market, market, market.
Or alternatively do away with the whole salery cap/salery floor system altogether. Money losing teams can then cut costs to the point where they can actually make money. Sure they will probably be perpetually in last place, but at least there wouldn't be any danger of the team moving or folding...
I find it funny how peope like Melrose Munch can drool and go gaga over a team in Quebec and think it will be such a longterm success, yet continue to question the longterm viability of Winnipeg.
Twenty years from now, even if the Jets have the worst record in hockey, they still won't be playing in half empty arenas like they were in Atlanta. Due in part to being a hockey market and proper ownership.
That being said, it can work in non-traditional markets too. How stoked is Bettman right now about Nashville?
Twenty years from now, even if the Jets have the worst record in hockey, they still won't be playing in half empty arenas like they were in Atlanta. Due in part to being a hockey market and proper ownership.
That being said, it can work in non-traditional markets too. How stoked is Bettman right now about Nashville?
The thing is, contrary to some other markets we wont mention, when the team will be bad for a while people there will still go watch the games, might not be sellouts, but there will never be 12000 people or less. Having loss their team for 15 years, people in Winnipeg will cherish their team no matter what, like in Québec City.
That's certainly what I think is going to happen as well, but that was basically the entire point I was making.... the real test isn't their first couple of seasons, but a ways down the road. I think they'll stay in Winnipeg for good, but.... there are a lot of outside factors that could come into play and, because of Winnipeg's size, that makes it have less room for error then larger markets, even ones that aren't as hockey mad as Winnipeg proportionally.
But, again, I think that they're in Winnipeg for good now, so hopefully the whole thing is a moot point anyway.
Quote:
Originally Posted by Melrose Munch
You always make great posts. Nothing to add to this.
