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.
PKP offer for Coyotes may be 230 million (mod: to QC w/relo $$)
Methinks that the constant rumors about "interested buyers" and Seattle might just have paid off in spades for the NHL in jacking up the price of the Yotes....
The NHL has also in the past charged expansion fees, so call it relocation or expansion it doesn't matter.... you will pay something to join the club and all the existing owners will get a cut.
Did the league charge relocation fees for the moves to Phoenix, Hartford or Denver? I honestly don't remember and could not find any info. It seems more like a Canadian tariff than a relo fee.
Did the league charge relocation fees for the moves to Phoenix, Hartford or Denver? I honestly don't remember and could not find any info. It seems more like a Canadian tariff than a relo fee.
The league claims that relocation fees were charged in those instances. There was no mention of it at the time, and a number of media outlets have called bovine excrement on it.
Did the league charge relocation fees for the moves to Phoenix, Hartford or Denver? I honestly don't remember and could not find any info. It seems more like a Canadian tariff than a relo fee.
Hartford did not "relocate", they were subsumed when WHA merged with NHL. (But there may have been a relocation fee when they moved to the Carolinas.)
Denver - I assume you mean the QC->Denver move, not the Colorado Rockies (pre-NJD)?
Relocating will probably cost more to Quebecor than Winnipeg because the league won't be shy to higher the price so that future relocating teams are ready to be bought at a higher price, besides the league knows how badly they want a team and are ready to pay the full price i.e example the new 400m$ colisee making it the newest leader in money value of NHL arenas. They're going to milk PKP right to the core and I think it could even be higher than 220$m.
Did the league charge relocation fees for the moves to Phoenix, Hartford or Denver? I honestly don't remember and could not find any info. It seems more like a Canadian tariff than a relo fee.
You mean Hartford to Carolina? The owner simply moved the team rather than selling it.
You mean Hartford to Carolina? The owner simply moved the team rather than selling it.
True, he simply moved the team. However, the league's justification for a relo fee is that the NHL owns the rights to all markets which have not been bought (I guess that's how franchises work in the business world), so the relo fee is actually the fee to purchase the market.
In that way, it shouldn't matter if it's a sale, or a straight move, there should be a fee.
Hartford did not "relocate", they were subsumed when WHA merged with NHL. (But there may have been a relocation fee when they moved to the Carolinas.)
Denver - I assume you mean the QC->Denver move, not the Colorado Rockies (pre-NJD)?
Correct -- I was talking about QC to Denver, and Hartford to Carolina. The league seems to make the rules as it sees fit at the time. Which is fine, its their league, but they are being disingenuous in their public pronouncements about the sacred nature of relocation and the need to charge a fee.
Edit: Just realized I said "Hartford" in my original post. Meant to write Denver, Phoenix and Carolina.
I can see the price being that high.....since the NHL has lost millions down there above the 25 mil COG gives them they want to get all that back....plus still make the profit of a relocation fee. So I think Quebec will be on the hook to subsidize the Coyotes losses over the last few years that have gone over and above the COG 25 mil......
In Winnipeg we had to pay an extra 60 mil to join the NHL club......Quebec will have to pay the same 60 mil plus the losses the NHL has suffered the last few years in Glendale.
I wasn't suggesting that the price for bad seats in Calgary or anywhere else is a benchmark for the average seat price in QC.
What I meant was that when you go from a 15,000 to an 18,000 seat arena, those additional 3,000 seats are furthest from the playing surface, and therefore at the lowest end of the price spectrum. So, when people say that they can sell those extra 3,000 seats for the "average" price, they are misrepresenting the ticket pricing scheme used in every arena. If you look at any ticket pricing chart, the most expensive seats are in the lower bowl. The cheapest seats are at the upper levels. That is where the extra seats are when comparing a 15,000 and 18,000 seat arena.
One of the reasons that Winnipeg average ticket prices are so high, is that they can sell the cheapest seats for a good price, because they are still decent view seats.
I don't think you read the post you're responding to, as your concerns were explicitly addressed and rebuked in it.
Additional seats in an 18,000 seat arena will not automatically be in the lowest price section (in fact, many will likely be additional lower level seats). Furthermore, the presence of additional seats drives up the relative value of other seats. That is to say, if the front half of a section (of 24 rows) is charged $60 per seat and the back half of the section is charged $40 per seat, you currently have 12x$40 + 12x$60 for rows. Adding 6 rows to the back increases the relative value of rows 13, 14, and 15 because they are now in the front half of the section. That means you now have 15x$40 + 15x$60 for rows, which means the 6 additional rows average $50/seat rather than the lowest price of $40/seat. Obviously this can't be applied directly to the entire arena average (luxury boxes aren't going to change, and there's still only one row "on the glass") but the concept applies. The additional seats will not increase revenue by the lowest price per seat. It will be far closer to the average for the entire arena than the lowest price in the arena.
This price ******** is a complete nonsense in reality.
In a business like this, the league has stated many times their wish to keep the team in Arizona.
So, lets say I am an uber rich businessman and want a hockey team.
I have two possibilities and I can expect two price tags.
If Pierre-Karl Peladeau, I do expect the league to sell me the team for 170M + 60M relocation fee thus 230Mil, because the possibility (one of the two) I want is to move the team, which is also against the leagues wish (the seller in this case) which justifies a higher price.
But lets say I'm an Arizona guy and want to keep the team where it is...why would I be so stupid and overpay something like 100, 110, 120, 130, 140, 150, 160 or even 170M for a team that my seller (the league) is trying to sell for 3 years but yet doesn't want to sell it to someone who will move it.
I as a local buyer comply with my sellers wish to keep his business in the current city, thus I can expect a much lower price than my competitor (PKP-Quebec) who wants to move the team.
Yet, even if this is logical and current in business, the league keeps telling everyone it is not how it works.
They are basicly saying to Arizona buyers, pay us 230M or we will sell the team to PKP for 100M and let him move it. And they are telling PKP pay us 230M or we will sell the team to someone who wants to keep it here for 100M.
I don't think you read the post you're responding to, as your concerns were explicitly addressed and rebuked in it.
Additional seats in an 18,000 seat arena will not automatically be in the lowest price section (in fact, many will likely be additional lower level seats). Furthermore, the presence of additional seats drives up the relative value of other seats. That is to say, if the front half of a section (of 24 rows) is charged $60 per seat and the back half of the section is charged $40 per seat, you currently have 12x$40 + 12x$60 for rows. Adding 6 rows to the back increases the relative value of rows 13, 14, and 15 because they are now in the front half of the section. That means you now have 15x$40 + 15x$60 for rows, which means the 6 additional rows average $50/seat rather than the lowest price of $40/seat. Obviously this can't be applied directly to the entire arena average (luxury boxes aren't going to change, and there's still only one row "on the glass") but the concept applies. The additional seats will not increase revenue by the lowest price per seat. It will be far closer to the average for the entire arena than the lowest price in the arena.
I disagree to an extent. Having the extra seats makes it possible to get into the arena at a lower price. Would you pay $39 for the last row of the MTS Centre if you could pay $25 to be one row back?
I disagree to an extent. Having the extra seats makes it possible to get into the arena at a lower price. Would you pay $39 for the last row of the MTS Centre if you could pay $25 to be one row back?
I would definitely pay $39 for the last row. I had to pay almost $60 a game to sit in the last row in the corner of the upper deck this year!
I would definitely pay $39 for the last row. I had to pay almost $60 a game to sit in the last row in the corner of the upper deck this year!
ok let me clarify what I meant. You currently play $39 face value for what is currently the last row. But if there were more seats above that that were cheaper you may not pay $39 for that particular seat.
The article is misleading. The channel is still young and most people don't have it yet, that's why the ratings are so low, it has nothing to do with the Nordiques. Sure, the Nordiques would help catapult their ratings through the roof, but they don't NEED the Nordiques to be profitable, they just need to slowly build their audience and that is what they are doing.
I don't think you read the post you're responding to, as your concerns were explicitly addressed and rebuked in it.
Additional seats in an 18,000 seat arena will not automatically be in the lowest price section (in fact, many will likely be additional lower level seats). Furthermore, the presence of additional seats drives up the relative value of other seats. That is to say, if the front half of a section (of 24 rows) is charged $60 per seat and the back half of the section is charged $40 per seat, you currently have 12x$40 + 12x$60 for rows. Adding 6 rows to the back increases the relative value of rows 13, 14, and 15 because they are now in the front half of the section. That means you now have 15x$40 + 15x$60 for rows, which means the 6 additional rows average $50/seat rather than the lowest price of $40/seat. Obviously this can't be applied directly to the entire arena average (luxury boxes aren't going to change, and there's still only one row "on the glass") but the concept applies. The additional seats will not increase revenue by the lowest price per seat. It will be far closer to the average for the entire arena than the lowest price in the arena.
We'll have to agree to disagree. Every rink is the same size, and the size of the lower sections are roughly the same. An 18,000 seat arena has 3000 extra seats at the upper levels compared to a 15000 seat arena. My point is that in an 18,000 seat arena there are different prices depending on where the seats are. The most expensive 15,000 seats are the closest ones.
The pricing is based on supply and demand, but there will always be a gradient from the lower to upper levels. So, the overall pricing will be higher in some markets than others, and the average ticket price will be higher. But I think it is a flawed analysis to say that the average ticket price can be used to extrapolate the difference in revenue between a 15,000 seat arena and an 18,000 seat arena. A 15,000 seat arena can have as many lower bowl seats as an 18,000 seat arena. The seat deficit is all around the upper sections of the arena, and those prices will always be lower than the seats in the lower bowl.
Suggesting that presence of additional seats drives up the value of other seats goes against the law of supply and demand. By that logic, the bigger the arena the higher the prices in the same market. So, if you build a 50,000 seat arena it would increase the value of all of the seats. In reality, if you oversize your arena you devalue the ticket, because people don't have to pay a premium to attend the event at all.
Why buy the Coyotes when you can buy the Devils, the Islanders, the Blues probably for less.
Jamison will need to make a enormous profit when he'll want to sell the franchise in 15 years to cover the losses. Can't work.
No sense, and the NHL boys wants all the pennies back. Over, finito, end of transmissions.
Because no way that the NHL would let a team move out of a brand new arena in New Jersey so soon because of how absolutely horrendous of a message that would send to municipalities any time a team tries to ask for government assistance for a new arena, nor would they accept a relocation from St. Louis. On top of that, they'd probably fight tooth and nail against a team abandoning the New York market, and probably just say **** it and let them play in the woefully inadequate Barclays instead if push came to shove.
Because no way that the NHL would let a team move out of a brand new arena in New Jersey so soon because of how absolutely horrendous of a message that would send to municipalities any time a team tries to ask for government assistance for a new arena, nor would they accept a relocation from St. Louis. On top of that, they'd probably fight tooth and nail against a team abandoning the New York market, and probably just say **** it and let them play in the woefully inadequate Barclays instead if push came to shove.
I think what is meant is that if Jamison wants a team, he should buy the Blues and not the Coyotes.
We'll have to agree to disagree. Every rink is the same size, and the size of the lower sections are roughly the same. An 18,000 seat arena has 3000 extra seats at the upper levels compared to a 15000 seat arena. My point is that in an 18,000 seat arena there are different prices depending on where the seats are. The most expensive 15,000 seats are the closest ones.
The pricing is based on supply and demand, but there will always be a gradient from the lower to upper levels. So, the overall pricing will be higher in some markets than others, and the average ticket price will be higher. But I think it is a flawed analysis to say that the average ticket price can be used to extrapolate the difference in revenue between a 15,000 seat arena and an 18,000 seat arena. A 15,000 seat arena can have as many lower bowl seats as an 18,000 seat arena. The seat deficit is all around the upper sections of the arena, and those prices will always be lower than the seats in the lower bowl.
Suggesting that presence of additional seats drives up the value of other seats goes against the law of supply and demand. By that logic, the bigger the arena the higher the prices in the same market. So, if you build a 50,000 seat arena it would increase the value of all of the seats. In reality, if you oversize your arena you devalue the ticket, because people don't have to pay a premium to attend the event at all.
You've clearly failed to grasp anything of what I'm saying, and have been flailing about at ridiculous strawmen. It's difficult to even say how you might have possibly arrived at the arguments you're trying to make.
All arenas are not designed the same. MTS Centre and Bell Centre have very different seating arrangements. Additional seats are not simply added to the upper level. Xcel Energy Center has a noticably different layout from the Saddledome. The Saddledome has an absolutely bizarre pricing structure for their layout as well, which I would be extremely surprised to see used in more than 1-2 other arenas in the league. And even if we take all the things you've tried to claim at face value, your own diagram of the Saddledome disproves your claim. Additional seats in the upper level ends in the Saddledome would be split 50/50 between the Green and Orange sections as the Orange is the front half of the section. Adding more seats would move the halfway point, which would add seats to both sections. I'd appreciate if you didn't invoke the phrase "supply and demand" if you're going to use it that brutally inappropriately.
You've clearly failed to grasp anything of what I'm saying, and have been flailing about at ridiculous strawmen. It's difficult to even say how you might have possibly arrived at the arguments you're trying to make.
All arenas are not designed the same. MTS Centre and Bell Centre have very different seating arrangements. Additional seats are not simply added to the upper level. Xcel Energy Center has a noticably different layout from the Saddledome. The Saddledome has an absolutely bizarre pricing structure for their layout as well, which I would be extremely surprised to see used in more than 1-2 other arenas in the league. And even if we take all the things you've tried to claim at face value, your own diagram of the Saddledome disproves your claim. Additional seats in the upper level ends in the Saddledome would be split 50/50 between the Green and Orange sections as the Orange is the front half of the section. Adding more seats would move the halfway point, which would add seats to both sections. I'd appreciate if you didn't invoke the phrase "supply and demand" if you're going to use it that brutally inappropriately.
I understand what you are saying, but disagree with it. No need to get so worked up.
Let's turn the argument around, and use the Xcel Energy Center and the Wild as the example.
Here is the pricing chart.
Green $97
Beige $87
Orange $81
Brown $79
Yellow $48
Red $28
(I've omitted the Club Seats).
Not surprisingly, the prices in the upper levels are substantially lower than in the lower levels because the seats are not as good.
So, if you were to shrink the Xcel Energy Center, would you keep the same ticket pricing for the remaining seats in the more compact arena (which patrons have already shown a willingness to pay) and thereby increase the average cost per seat, or would you re-adjust the existing pricing footprint and apply it to the smaller seating arrangement, thereby reducing the overall average cost of those remaining seats?
Here is how I understand "supply and demand" in this context. If you reduce the supply without a reduction in demand, the result is a higher equilibrium price. Conversely, if you increase the supply without a concomitant increase in demand, the result will be a lower equilibrium price. With a fixed supply due to the number of seats and the number of games, teams cannot increase the overall supply of tickets. But if demand for tickets is high enough, teams can increase the supply of higher priced tickets. That increases the average ticket cost. So, if a 15,000 seat arena results in demand outstripping supply, then teams can increase prices. Conversely, if supply outstrips demand, ticket prices need to come down to increase demand.
Explain your definition of "supply and demand" in this context if you don't like mine.
By the way, below is the seating layout of the MTS Centre and Bell Centre, for comparison with Xcel Energy.
