HFBoards

Go Back   HFBoards > General Hockey Discussion > The Business of Hockey
The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

Manitoba Moose / MTS Centre group talking to NHL - Part II

Closed Thread
 
Thread Tools
Old
02-25-2010, 06:58 PM
  #26
Jeffrey93
Registered User
 
Jeffrey93's Avatar
 
Join Date: Nov 2007
Country: Canada
Posts: 3,188
vCash: 500
Quote:
Originally Posted by Wolvesfan View Post
Just picking yours to quote...

The one thing about the owners that is for certain, is they are greedy and will go wherever the money is and that Bettman will help them do that.

I know Colorado had a long sell out streak but, just going by this years numbers, they stink. I think that unless you have an owner that is committed (stubborn?) to their particular city, anything is possible. Look at the North Stars. They moved. Teams move to make more (lose less) money.

Until we see the books for each team, we do not know which ones are profitable and which ones are not. Also, books can be cooked to reflect whatever the owners want, within reason. For example, if the team's ownership group also owns the arena, they may show the Arena making money and the team losing money in order for them to get revenue sharing, tax breaks, etc. They may have the team not getting any concession money and/or pay a high rent. WHo knows what these guys and their accounts have cooked up. I know what a lot of Fortune 50 companies do and GAAP is somewhat open to interpretation.


So, bottom line so to speak, I think the only teams that you can for sure rule out relocating are Vancouver, Montreal, Toronto, Ottawa, Boston, NY Rangers, Chicago Blackhawks, San Jose Sharks, Detroit Red Wings, Pittsburgh Penguins, Washington Capitals, NJ Devils, and Philadelphia Flyers.

I think everything else is money talks.
It doesn't change the point of your post at all, but I was just curious how many NHL franchises in the US actually own their arena. Since they basically get them built for free...I didn't think many, if any, owned the building themselves.

Jeffrey93 is offline  
Old
02-25-2010, 07:23 PM
  #27
kdb209
Global Moderator
 
kdb209's Avatar
 
Join Date: Jan 2005
Posts: 12,428
vCash: 500
Quote:
Originally Posted by Jeffrey93 View Post
It doesn't change the point of your post at all, but I was just curious how many NHL franchises in the US actually own their arena. Since they basically get them built for free...I didn't think many, if any, owned the building themselves.
Owning the building is not as important as controlling arena opeartions (ie the Master Lease) and receiving all arena revenues.

Few teams own their own building, but many (San Jose, Atlanta, etc) own their Master Leases and operate their arenas.

The only fundamental difference then is payments to the entity that actually own the arena (City of San Jose, Atlanta Fulton County Recreation Association) - be it fixed rents, percentages of revenues, or defined revenue streams - and how that compares to direct debt servicing if they owned the arenas outright. In many cases, the payments to the city are designed to meet the city's bond obligations, but any shortfall is the responsibility of the city, not the team.

Owning the arena outright then may only be a distinct advantage if they have no building debt, but even then, there is the issue of property taxes - a privately owned arena would owe taxes, a publicly owned one typically would not.

kdb209 is online now  
Old
02-25-2010, 08:58 PM
  #28
Pegger5
Registered User
 
Join Date: Jan 2007
Posts: 260
vCash: 500
Quote:
Originally Posted by kdb209 View Post
Owning the building is not as important as controlling arena opeartions (ie the Master Lease) and receiving all arena revenues.

Few teams own their own building, but many (San Jose, Atlanta, etc) own their Master Leases and operate their arenas.

The only fundamental difference then is payments to the entity that actually own the arena (City of San Jose, Atlanta Fulton County Recreation Association) - be it fixed rents, percentages of revenues, or defined revenue streams - and how that compares to direct debt servicing if they owned the arenas outright. In many cases, the payments to the city are designed to meet the city's bond obligations, but any shortfall is the responsibility of the city, not the team.

Owning the arena outright then may only be a distinct advantage if they have no building debt, but even then, there is the issue of property taxes - a privately owned arena would owe taxes, a publicly owned one typically would not.
Or best case scenario would to be like the True North Entertainment that owns the MTS Centre 100% and zero debt on the arena. They control it 100% and all revenues. Not only that they have a non-compete clause that no other venue indoors can host any event over 4000 people in Winnipeg...Also they pay NO city taxes. Most likely it would be the Sweetest deal in the NHL if Winnipeg got a team..


Last edited by Pegger5: 02-25-2010 at 09:03 PM.
Pegger5 is offline  
Old
02-26-2010, 10:16 AM
  #29
Tinalera
Registered User
 
Tinalera's Avatar
 
Join Date: Feb 2007
Location: The Known Universe
Posts: 6,013
vCash: 500
Quote:
Originally Posted by Thomas Steen View Post
Or best case scenario would to be like the True North Entertainment that owns the MTS Centre 100% and zero debt on the arena. They control it 100% and all revenues. Not only that they have a non-compete clause that no other venue indoors can host any event over 4000 people in Winnipeg...Also they pay NO city taxes. Most likely it would be the Sweetest deal in the NHL if Winnipeg got a team..
I apologise if this question has been covered a long time ago, but why was the MTS built with "only" 14000 seats, and not with 18-19000? When planning the building, was the belief at the time that there was no reason to plan for the possible return of an NHL franchise? 14000 just seems like an unusual number. Was the arena custom built for the AHL franchise, with the idea that 18 or 19000 would be too much-it just appears short sighted planning wise(and that's not meant as a slight in any way).

I'm just surprised, with the passion there is for a return of the Jets, that it wasn't decided to err on the side of optimism and add 4000 more seats. Also, more seats I would think would help with other events at the center(concerts, ect).

Tinalera is offline  
Old
02-26-2010, 10:20 AM
  #30
hexrae
Registered User
 
hexrae's Avatar
 
Join Date: Jun 2006
Location: Peg City
Country: Canada
Posts: 1,515
vCash: 500
Quote:
Originally Posted by Tinalera View Post
I apologise if this question has been covered a long time ago, but why was the MTS built with "only" 14000 seats, and not with 18-19000? When planning the building, was the belief at the time that there was no reason to plan for the possible return of an NHL franchise? 14000 just seems like an unusual number. Was the arena custom built for the AHL franchise, with the idea that 18 or 19000 would be too much-it just appears short sighted planning wise(and that's not meant as a slight in any way).

I'm just surprised, with the passion there is for a return of the Jets, that it wasn't decided to err on the side of optimism and add 4000 more seats. Also, more seats I would think would help with other events at the center(concerts, ect).
It's 15000, not 14. Still undersized, but in reality, it's a good size for this city. I've heard rumblings that expansion plans would revolve around adding additional skyboxes, thereby increasing the capacity a couple thousand (again, still relatively small).

hexrae is offline  
Old
02-26-2010, 10:30 AM
  #31
damaaster
Registered User
 
Join Date: Dec 2009
Location: WINNIPEG
Posts: 17
vCash: 500
Quote:
Originally Posted by Tinalera View Post
I apologise if this question has been covered a long time ago, but why was the MTS built with "only" 14000 seats, and not with 18-19000? When planning the building, was the belief at the time that there was no reason to plan for the possible return of an NHL franchise? 14000 just seems like an unusual number. Was the arena custom built for the AHL franchise, with the idea that 18 or 19000 would be too much-it just appears short sighted planning wise(and that's not meant as a slight in any way).

I'm just surprised, with the passion there is for a return of the Jets, that it wasn't decided to err on the side of optimism and add 4000 more seats. Also, more seats I would think would help with other events at the center(concerts, ect).

First things first - The MTS center doesn't hold 14000, it holds just over 15,000 for hockey and over 16,000 for concerts. When (not if) the NHL returns to Winnipeg we will have the smallest arena - BUT we will be sold out every night. All these markets with no hockey demand have arenas with 18-19000 seats, but only get 9,10 or 11 000 people showing up to games.

According to ESPN.com there are 8 teams under 15000 average attendance this year. Keep in mind that is not fans at the game, that includes ticket giveaways, freebies, etc. Cities like Tampa, Phoenix have games that you can get into for free if you bring a phone book to recycle or ride your bike to the game...lol

Being a Penguins fan, I watch a lot of NHL games on FSN and I get to see all the ridiculous offers for these markets (2 tickets, 2 hot dogs, 2 beers and free parking for 40 bucks) - LOWER BOWL SEATING.

Winnipeg probably could sell out a 19 000 seat arena, but even with 15000 at every game - they will be fine. Keep in mind a team in Winnipeg doesn't have to earn more revenue then Toronto, Montreal, or Calgary - they just need to be better then Tampa, Atlanta, Phoenix, Columbus, Florida, NYI, Nashville, Carolina, NJD, Anaheim, and I see no reason why Winnipeg wouldn't be in the top 20 in league attendance.

damaaster is offline  
Old
02-26-2010, 10:38 AM
  #32
WJG
Running and Rioting
 
WJG's Avatar
 
Join Date: Aug 2008
Country: Ireland
Posts: 12,743
vCash: 500
The one thing I've found interesting is that after all the speculation that the Predators were going to relocate to Kansas City in 2007, Kansas City eventually held an NHL exhibition game in 2008.

Conversely, the NHL has held exhibition games in Winnipeg every year during the past four seasons (Oilers vs. Coyotes in 2006, Leafs vs. Coyotes in 2007, Flames vs. Coyotes in 2008 and Oilers vs. Lightning in 2009).

This has been one of the main reasons I believe Winnipeg has been on the NHL's radar for a while. Obviously it's not uncommon to host NHL games in Canadian cities (ex. Saskatoon, Halifax, etc), but four games in four years? I think that's too much of a coincidence.

WJG is offline  
Old
02-26-2010, 11:16 AM
  #33
bromine
Registered User
 
bromine's Avatar
 
Join Date: Sep 2009
Location: WPG
Posts: 288
vCash: 50
Quote:
Originally Posted by Running Riot View Post
The one thing I've found interesting is that after all the speculation that the Predators were going to relocate to Kansas City in 2007, Kansas City eventually held an NHL exhibition game in 2008.

Conversely, the NHL has held exhibition games in Winnipeg every year during the past four seasons (Oilers vs. Coyotes in 2006, Leafs vs. Coyotes in 2007, Flames vs. Coyotes in 2008 and Oilers vs. Lightning in 2009).

This has been one of the main reasons I believe Winnipeg has been on the NHL's radar for a while. Obviously it's not uncommon to host NHL games in Canadian cities (ex. Saskatoon, Halifax, etc), but four games in four years? I think that's too much of a coincidence.

While I believe that Wpg is on the NHL's radar, I also think the NHL would be playing exhibition games in Winnipeg even if they weren't in the NHL's relocation plans. The preseason games played here are a cash cow for the "home team." Note that in the above 4 examples, the home team was the Coyotes/Lightning, not the visiting Canadian team. Also note that the home team gets to take away a very large portion of revenue from the event. The MTSC comes close to a full house every year, while charging nearly full NHL prices. The Coyotes' preseason games here were without a doubt their highest revenue preseason games, and pulled in higher revenue than a large proportion of their regular season games too.

For True North, they boost AHL ticket revenue by hosting the NHL game. Most years, the only way to get a ticket to the NHL game prior to the last week before the game was to purchase a Moose mini-pack.

So, even without the Peg being on the NHL's relocation radar, we should expect the exhibition games to continue. Every year, a southern team gets to offset its losses with a meaningless game in Winnipeg, True North gets to sell more Moose tickets, and the fans are "treated" to watching 2 teams not from Winnipeg charge NHL prices to ice largely AHL rosters in a meaningless game. It's Win-Win....Win?

With that said, I think Winnipeg's appetite for the exhibition games is waning. This past year, the 2 local newspapers published commentaries on gameday essentially advising fans to stay home from the NHL's cash grab. Some Winnipeggers are starting to feel that they are being taken advantage of. Simply put, give us a franchise or leave us alone.

bromine is offline  
Old
02-26-2010, 11:54 AM
  #34
Stej
Good Canadian Kid!
 
Stej's Avatar
 
Join Date: Jul 2006
Location: The Kirk
Country: Canada
Posts: 1,798
vCash: 500
There are some other considerations which would suggest that having a 19,000 seat arena is not optimal, especially in a city like Winnipeg.

1) When you talk about adding a few extra thousand seats, you have to recognize that you are not adding premium seats. Every additional seat you add is worse than the 15,000 that already exist. An arguement could be made that the additional revenue from these "bad" seats is not worth the additional expenses associated with a larger arena.

2) The atmosphere is better in a smaller, packed arena than it is in a larger arena with thousands of empty seats.

3) The classic supply/demand debate. Some would argue (and I would agree) that adding additional seating will diminish the revenue generating capability of the original 15,000 seats. People will be less willing to dish out top dollar for the premium seats (or to buy season tickets) if they are guaranteed to be able to get tickets on a game by game basis. The extra supply is not necessarily always a good thing. Gary Bettman has alluded to this in the past in stating that bigger is not always better when it comes to arenas.

Consideration #3 is especially relevant for me. Because the MTSC only holds 15,000, I would be buying season tickets to guarantee that I can get into the games. If the arena held 19,000, I would probably be more inclined to buy tickets on a game by game basis.

These points have all been debated at length in part 1 of this thread.

Stej is online now  
Old
02-26-2010, 11:59 AM
  #35
bromine
Registered User
 
bromine's Avatar
 
Join Date: Sep 2009
Location: WPG
Posts: 288
vCash: 50
Quote:
Originally Posted by MJ--A--N View Post
There are some other considerations which would suggest that having a 19,000 seat arena is not optimal, especially in a city like Winnipeg.

1) When you talk about adding a few extra thousand seats, you have to recognize that you are not adding premium seats. Every additional seat you add is worse than the 15,000 that already exist. An arguement could be made that the additional revenue from these "bad" seats is not worth the additional expenses associated with a larger arena.

2) The atmosphere is better in a smaller, packed arena than it is in a larger arena with thousands of empty seats.

3) The classic supply/demand debate. Some would argue (and I would agree) that adding additional seating will diminish the revenue generating capability of the original 15,000 seats. People will be less willing to dish out top dollar for the premium seats (or to buy season tickets) if they are guaranteed to be able to get tickets on a game by game basis. The extra supply is not necessarily always a good thing. Gary Bettman has alluded to this in the past in stating that bigger is not always better when it comes to arenas.

Consideration #3 is especially relevant for me. Because the MTSC only holds 15,000, I would be buying season tickets to guarantee that I can get into the games. If the arena held 19,000, I would probably be more inclined to buy tickets on a game by game basis.

These points have all been debated at length in part 1 of this thread.

Very true. I can't remember where I heard it, but it goes like this: The last 2000 seats in arena cost the most to put in, are the hardest to fill, and generate the least amount of revenue.

That said, the MTSC could use another 800-1000 in capacity through a combination of sky suites and squeezing in another row or two where possible. 16,000-ish would be a perfect size for a Winnipeg NHL team.

bromine is offline  
Old
02-26-2010, 12:28 PM
  #36
Pegger5
Registered User
 
Join Date: Jan 2007
Posts: 260
vCash: 500
Quote:
Originally Posted by MJ--A--N View Post
There are some other considerations which would suggest that having a 19,000 seat arena is not optimal, especially in a city like Winnipeg.

1) When you talk about adding a few extra thousand seats, you have to recognize that you are not adding premium seats. Every additional seat you add is worse than the 15,000 that already exist. An arguement could be made that the additional revenue from these "bad" seats is not worth the additional expenses associated with a larger arena.

2) The atmosphere is better in a smaller, packed arena than it is in a larger arena with thousands of empty seats.

3) The classic supply/demand debate. Some would argue (and I would agree) that adding additional seating will diminish the revenue generating capability of the original 15,000 seats. People will be less willing to dish out top dollar for the premium seats (or to buy season tickets) if they are guaranteed to be able to get tickets on a game by game basis. The extra supply is not necessarily always a good thing. Gary Bettman has alluded to this in the past in stating that bigger is not always better when it comes to arenas.

Consideration #3 is especially relevant for me. Because the MTSC only holds 15,000, I would be buying season tickets to guarantee that I can get into the games. If the arena held 19,000, I would probably be more inclined to buy tickets on a game by game basis.

These points have all been debated at length in part 1 of this thread.

Could not have said it better... This is why many cities are downsizing their arenas not making them bigger. See NJ...

Pegger5 is offline  
Old
02-26-2010, 01:33 PM
  #37
Buck Aki Berg
My pockets hurt
 
Buck Aki Berg's Avatar
 
Join Date: Sep 2008
Location: Ottawa, ON
Country: Canada
Posts: 13,853
vCash: 500
Quote:
Originally Posted by bromine View Post
Very true. I can't remember where I heard it, but it goes like this: The last 2000 seats in arena cost the most to put in, are the hardest to fill, and generate the least amount of revenue.
I'm not so sure about this .. from personal experience, it seems like the seats right in front of the last 2000 seats are the hardest to fill. And since they're harder to fill, they would generate less revenue than the seats behind them if you aren't able to.

I remember back in the late 90s when I was going to a lot of Sens games, if you looked in the upper bowl you'd see the last few rows (the cheap seats) would be packed, then eight or nine rows of sparsely populated seating (especially in the corners and on the ends), then the rows in front of that (the first half-dozen rows of the upper bowl) would be nearly full.

This could be a matter of how tickets are priced (and the Sens are known to have numerous price points and complex/silly pricing), and obviously my sample size is low (one)

Buck Aki Berg is offline  
Old
02-26-2010, 04:04 PM
  #38
Jeffrey93
Registered User
 
Jeffrey93's Avatar
 
Join Date: Nov 2007
Country: Canada
Posts: 3,188
vCash: 500
Quote:
Originally Posted by Haymaker View Post
I'm not so sure about this .. from personal experience, it seems like the seats right in front of the last 2000 seats are the hardest to fill. And since they're harder to fill, they would generate less revenue than the seats behind them if you aren't able to.

I remember back in the late 90s when I was going to a lot of Sens games, if you looked in the upper bowl you'd see the last few rows (the cheap seats) would be packed, then eight or nine rows of sparsely populated seating (especially in the corners and on the ends), then the rows in front of that (the first half-dozen rows of the upper bowl) would be nearly full.

This could be a matter of how tickets are priced (and the Sens are known to have numerous price points and complex/silly pricing), and obviously my sample size is low (one)
Exactly. By adding more seats you are (should be) tapping more of the demand in the market. By having proper price structures for those seats you can properly use supply and demand of specific seats to maximize the revenue.

Jeffrey93 is offline  
Old
02-26-2010, 05:58 PM
  #39
Stej
Good Canadian Kid!
 
Stej's Avatar
 
Join Date: Jul 2006
Location: The Kirk
Country: Canada
Posts: 1,798
vCash: 500
Quote:
Originally Posted by Haymaker View Post
I'm not so sure about this .. from personal experience, it seems like the seats right in front of the last 2000 seats are the hardest to fill. And since they're harder to fill, they would generate less revenue than the seats behind them if you aren't able to.

I remember back in the late 90s when I was going to a lot of Sens games, if you looked in the upper bowl you'd see the last few rows (the cheap seats) would be packed, then eight or nine rows of sparsely populated seating (especially in the corners and on the ends), then the rows in front of that (the first half-dozen rows of the upper bowl) would be nearly full.

This could be a matter of how tickets are priced (and the Sens are known to have numerous price points and complex/silly pricing), and obviously my sample size is low (one)
This is a pricing issue. In fact, it's probably proving my point. By offering those extra 2000 seats at a lower price (the "cheap seats" as you call them), you are adversely impacting the revenue generating capabilities of the other seats. You end up with the same size crowd, but you make less money because the consumers are substituting the cheap seats for the better quality seats. And that doesn't even take into consideration the extra expenses associated with the extra seats. From a profitability standpoint, you are actually worse off.

@Jeffrey - The goal shouldn't be to maximize revenue, it should be to maximize profitability. I've seen you argue this before and I'm confident that I will be unsuccessful in convincing you of the phenomenon of decreasing marginal profitability. Let's just leave it at that.

Stej is online now  
Old
02-26-2010, 06:35 PM
  #40
Pegger5
Registered User
 
Join Date: Jan 2007
Posts: 260
vCash: 500
Quote:
Originally Posted by Jeffrey93 View Post
Exactly. By adding more seats you are (should be) tapping more of the demand in the market. By having proper price structures for those seats you can properly use supply and demand of specific seats to maximize the revenue.
Jeffrey93, your statement is 100% a contradiction to basic economics of supply and demand... Geesh.. More of a demand, the higher the prices, the more the profit...
Take a look at Ottawa's situation right now.. Their rink has more supply than demand so they had to drop ticket prices... thus less profit. People start to think they can buy tickets last minute so they won't buy season tickets the following year... This is what is killing so many teams in the States. They have to keep average ticket price low to keep demand high but that cuts into profit..

simple example for you again!

Pegger5 is offline  
Old
02-27-2010, 09:04 AM
  #41
TrentSteele
Registered User
 
Join Date: Jun 2007
Posts: 259
vCash: 500
Quote:
Originally Posted by Thomas Steen View Post
Jeffrey93, your statement is 100% a contradiction to basic economics of supply and demand... Geesh.. More of a demand, the higher the prices, the more the profit...
Take a look at Ottawa's situation right now.. Their rink has more supply than demand so they had to drop ticket prices... thus less profit. People start to think they can buy tickets last minute so they won't buy season tickets the following year... This is what is killing so many teams in the States. They have to keep average ticket price low to keep demand high but that cuts into profit..

simple example for you again!
You guys are wasting your time, I've already had this debate with him and he just doesn't get it.

TrentSteele is offline  
Old
02-28-2010, 07:40 AM
  #42
Jeffrey93
Registered User
 
Jeffrey93's Avatar
 
Join Date: Nov 2007
Country: Canada
Posts: 3,188
vCash: 500
Quote:
Originally Posted by Thomas Steen View Post
Jeffrey93, your statement is 100% a contradiction to basic economics of supply and demand... Geesh.. More of a demand, the higher the prices, the more the profit...
Take a look at Ottawa's situation right now.. Their rink has more supply than demand so they had to drop ticket prices... thus less profit. People start to think they can buy tickets last minute so they won't buy season tickets the following year... This is what is killing so many teams in the States. They have to keep average ticket price low to keep demand high but that cuts into profit..

simple example for you again!
Well...if you think the MAXIMUM Winnipeg could get to games while still keeping demand at a fairly high level is 15,000.....we might as well stop talking about this right now because if that's the case any team there is royally screwed.

I assume there is more demand than 15,000 and that there are people that will refuse to buy tickets if priced too high. It isn't as simple as saying "If you add 3,000 more seats every ticket has to be cheaper.", some might become tougher sells but you are also selling more.

I didn't think demand would falter to a significant rate in Winnipeg if there were 17,500 - 18,000 seats....but, maybe it would.

You said: "More of a demand, the higher the prices, the more the profit... " which is generally true, but not completely. If you reduce MTS to 10,000 seats...demand goes up right? Yup. Prices go up right? Yup. Profits go up right? Absolutely not.

Until you reach that point in supply where you start to reduce demand you will not have a huge impact on prices and will still increase your profits. The key is finding that perfect point where you have the most supply but not enough reduction in demand to lower prices so much that the additional ticket sales aren't beneficial.

Like I said ages ago in this thread...if your simple example of supply & demand economics had no limits it would be most profitable to build a 2 seat arena. There is a point where you can increase supply to before your demand is lowered enough to cause a reduction in prices/profits. Working with both total capacity and availability of tickets in specific price ranges can maximize the supply while holding the demand to a point that maximizes profits.
I don't know the fancy pants word for it....the limit that supply can be increased before it stops being financially beneficial due to the lower demand. I didn't think that would be 15,000 in a "hockey hotbed" like Winnipeg, but...maybe it is.

Jeffrey93 is offline  
Old
02-28-2010, 08:55 AM
  #43
TrentSteele
Registered User
 
Join Date: Jun 2007
Posts: 259
vCash: 500
Quote:
Originally Posted by Jeffrey93 View Post
Well...if you think the MAXIMUM Winnipeg could get to games while still keeping demand at a fairly high level is 15,000.....we might as well stop talking about this right now because if that's the case any team there is royally screwed.

I assume there is more demand than 15,000 and that there are people that will refuse to buy tickets if priced too high. It isn't as simple as saying "If you add 3,000 more seats every ticket has to be cheaper.", some might become tougher sells but you are also selling more.

I didn't think demand would falter to a significant rate in Winnipeg if there were 17,500 - 18,000 seats....but, maybe it would.

You said: "More of a demand, the higher the prices, the more the profit... " which is generally true, but not completely. If you reduce MTS to 10,000 seats...demand goes up right? Yup. Prices go up right? Yup. Profits go up right? Absolutely not.

Until you reach that point in supply where you start to reduce demand you will not have a huge impact on prices and will still increase your profits. The key is finding that perfect point where you have the most supply but not enough reduction in demand to lower prices so much that the additional ticket sales aren't beneficial.

Like I said ages ago in this thread...if your simple example of supply & demand economics had no limits it would be most profitable to build a 2 seat arena. There is a point where you can increase supply to before your demand is lowered enough to cause a reduction in prices/profits. Working with both total capacity and availability of tickets in specific price ranges can maximize the supply while holding the demand to a point that maximizes profits.
I don't know the fancy pants word for it....the limit that supply can be increased before it stops being financially beneficial due to the lower demand. I didn't think that would be 15,000 in a "hockey hotbed" like Winnipeg, but...maybe it is.
So as a business man, would you spend god knows how much to renovate the MTS Centre without having tangible evidence of how much demand there actually is? It's all well and good for residents of Winnipeg to claim it as a hockey hotbed, but without actual data to prove to any potential owners of exactly how much demand there is, there isn't much point of doing expensive renovations for an unknown amount of potential profit.

TrentSteele is offline  
Old
02-28-2010, 09:15 AM
  #44
Jeffrey93
Registered User
 
Jeffrey93's Avatar
 
Join Date: Nov 2007
Country: Canada
Posts: 3,188
vCash: 500
Quote:
Originally Posted by TrentSteele View Post
So as a business man, would you spend god knows how much to renovate the MTS Centre without having tangible evidence of how much demand there actually is? It's all well and good for residents of Winnipeg to claim it as a hockey hotbed, but without actual data to prove to any potential owners of exactly how much demand there is, there isn't much point of doing expensive renovations for an unknown amount of potential profit.
I'd agree...but it seems most who think a team will thrive in Winnipeg would tell you that no data is needed to prove the demand.

I'm simply saying that a larger arena isn't bad, if it were every rink in the NHL would be 15,000 seats. Smaller venues have their perks but there is a reason why basically every NHL arena is 17,500 to 20,000.

I'd think that if the demand isn't there to justify additional seats then the demand may not be there to meet the higher prices that come with less supply.

If you don't have the demand to justify 17,500 seats (cost might be an issue since this building wasn't designed for expansion, if expansion like that is even physically possible - which I doubt it is) then I wouldn't be all that confident that you have the demand to have ticket prices high enough to make this a success. The reduced supply will increase the demand to a point, then the market will not continue to pay the high prices.

I hope I'm wrong, but I think if Winnipeg does get a team that it will be realized shortly after the initial season that they are in desperate need of those additional seats.

It's all fine and dandy to say limited supply increases demand and therefore ticket prices/profits rise.....but you have to have the people willing to actually shell out the dough. People can't just want to go to a game....they have to want to trade a lot of money for a ticket many times a year. I'd like to think demand would still be high with more seats....but I'm begining to wonder if it's even high enough to meet the prices they will need to make it work in the much smaller arena.

Jeffrey93 is offline  
Old
02-28-2010, 09:59 AM
  #45
TrentSteele
Registered User
 
Join Date: Jun 2007
Posts: 259
vCash: 500
Quote:
Originally Posted by Jeffrey93 View Post
I'd agree...but it seems most who think a team will thrive in Winnipeg would tell you that no data is needed to prove the demand.

I'm simply saying that a larger arena isn't bad, if it were every rink in the NHL would be 15,000 seats. Smaller venues have their perks but there is a reason why basically every NHL arena is 17,500 to 20,000.

I'd think that if the demand isn't there to justify additional seats then the demand may not be there to meet the higher prices that come with less supply.

If you don't have the demand to justify 17,500 seats (cost might be an issue since this building wasn't designed for expansion, if expansion like that is even physically possible - which I doubt it is) then I wouldn't be all that confident that you have the demand to have ticket prices high enough to make this a success. The reduced supply will increase the demand to a point, then the market will not continue to pay the high prices.

I hope I'm wrong, but I think if Winnipeg does get a team that it will be realized shortly after the initial season that they are in desperate need of those additional seats.

It's all fine and dandy to say limited supply increases demand and therefore ticket prices/profits rise.....but you have to have the people willing to actually shell out the dough. People can't just want to go to a game....they have to want to trade a lot of money for a ticket many times a year. I'd like to think demand would still be high with more seats....but I'm begining to wonder if it's even high enough to meet the prices they will need to make it work in the much smaller arena.
And what has led you to believe this...the ramblings of a few internet posters...The truth of the matter is that neither you, or I, or anyone else on this board have any true idea of what the actual demand is in Winnipeg. I only know what I can afford, and that will be some sort of 8-10 game package deal for 2 people at one of the lower price points. I also know that my company buys 6 season ticket packages and shares 1/4 of a private suite. That's what I know. Everything else is pure speculation.

That's the last I will say on this today as there is a certain big game today that will occupy my complete attention.

GO CANADA GO!!!

TrentSteele is offline  
Old
02-28-2010, 11:17 AM
  #46
WJG
Running and Rioting
 
WJG's Avatar
 
Join Date: Aug 2008
Country: Ireland
Posts: 12,743
vCash: 500
IMO, debating the arena size is trivial.

If Thomson, Chipman, Bettman and the BOG believe 15,000 is large enough to accommodate an NHL team, I have no reason to doubt them.

WJG is offline  
Old
03-01-2010, 01:14 AM
  #47
MAROONSRoad
f/k/a Ghost
 
MAROONSRoad's Avatar
 
Join Date: Feb 2007
Location: Maroons Rd.
Country: Canada
Posts: 4,069
vCash: 500
Quote:
Originally Posted by Running Riot View Post
IMO, debating the arena size is trivial.

If Thomson, Chipman, Bettman and the BOG believe 15,000 is large enough to accommodate an NHL team, I have no reason to doubt them.
I agree. At the end of the day, however, I believe the MTS Centre can add some capacity, spaces and suites above the upper bowl and elsewhere, which at minimum will result in a 16,000 to 16,500 capacity arena. That's more than enough to support an NHL team. Beyond that, they will have to raise the roof, which is a long-term possibility.

GHOST

MAROONSRoad is offline  
Old
03-01-2010, 01:21 AM
  #48
scott0606
 
Join Date: Jan 2010
Posts: 6
vCash: 500
Supposedly this deal was completed last week and will be announced on March 4th.

Thats the word on the street in the Peg as of Sunday Feb 28th

scott0606 is offline  
Old
03-01-2010, 01:40 AM
  #49
MAROONSRoad
f/k/a Ghost
 
MAROONSRoad's Avatar
 
Join Date: Feb 2007
Location: Maroons Rd.
Country: Canada
Posts: 4,069
vCash: 500
Quote:
Originally Posted by scott0606 View Post
Supposedly this deal was completed last week and will be announced on March 4th.

Thats the word on the street in the Peg as of Sunday Feb 28th
I've seen/heard no evidence of that. Do you have any?

GHOST

MAROONSRoad is offline  
Old
03-01-2010, 08:16 AM
  #50
scott0606
 
Join Date: Jan 2010
Posts: 6
vCash: 500
Its all word of mouth now...so exactly the same situation Winnipeggers have been in for the past 16 years or so lol

The mouths they are coming from are pretty in the know people such as Hildahl from the Bombers (apparently told a few employees that architects were in the MTS centre near the end of 2009 to determine if a 3rd bowl could be added) and a lawyer who has been hired by True North (who told his son the deal was completed last week)

What I have heard is that it will be announced on March 4th for the Thrashers to move for the 2012 season.

Obviously it is all 3rd party information and like everyone, I am definitely not holding my breath on this. I have been saying for the past 5 years (when I learned how the right thtings have to be in place such as strong corp. sponsorship) that the NHL wont be coming back to the Peg...however, I would be lying if I said I am not excited for March 4th

scott0606 is offline  
Closed Thread

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 06:21 PM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2014 All Rights Reserved.