Myths Surround Manitoba's Ability To Support NHL Hockey
Summary:
The past Winnipeg Arena, built in the 1950's, was controlled by a city-owned landlord, Winnipeg Enterprises Corp. WEC retained all non-hockey related revenues, charged the Jets rent and even kept in-game revenues related to concessions, liquor, most in-game advertizing and even parking. The rink was expanded in 1979 in order to join the NHL as a temporary measure to buy time for a new rink to be built. Fans came to events in spite of the arena, where even 800 seats had obstructed views.
In spite of all of those roadblocks, NHL attendances for Jet seasons were modest but certainly not a concern as some now might try to revise history. An overall NHL attendance for the Jets was around 13,200, which is now considered to be small. However, the league average attendances from the same years 1979 to 1995 was 10,710 to 14,797.
It should be noted that these same Jet attendances would outdraw several teams right now in the NHL who have also inflated their attendances with freebies just to reach these numbers. Realistically, it is anticipated that the more inviting and comfortable MTS Centre will bring out crowds better than those in the past.
Beyond the Jet years, the minor league Manitoba Moose in their entire history have consistently been near the top of AHL and IHL yearly attendances. While it can't be compared to filling a rink for NHL hockey, it demonstrates support as good as anywhere where the NHL is not at present. The Moose have the luxury of running its' own internet PPV game broadcasts and hockey shows, which also demonstrates that the fans are not only in sufficient numbers but are also willing to part with cash, even to support a farm team of a past heated Western Canadian rival.
Manitoba fans have come to expect first class hockey. The Moose to their credit and survival ensure they make their games feel just like NHL productions, much moreso in comparison to past Jet experiences.
For those who flippantly say that fans in Winnipeg could not afford to double or triple the 1996 NHL prices to support NHL hockey currently, can they honestly also say they believed in 1996 that fans in Manitoba would be a top draw in the AHL paying nearly double the 1996 NHL prices just to watch minor league hockey? Manitoba Moose prices have been some of the highest in every year in both leagues they played in.
The Jets ownership went on record that the only reason the team left town was due to the lack of a new arena or firm commitment to build one. Barry Shenkarow clearly stated this is not an issue related to the fan support, both individual and corporate.
In short, the fanbase is one of the best and most secure in the world, certainly capable of supporting the NHL now that the new rink is in place with all revenues streams able to go to the team via a singular ownership group.
Market Analysis:
Based on an in-depth review of the NHL, there are three elements necessary for a team to survive and thrive. Much like for a three legged stool to remain standing, all three are necessary.
A fanbase as we have defined includes both individual and corporate fans. The individual fans when in sufficient numbers generate in-event excitement which further encourages and sustains the corporate participation to schmooze clientele who are also happy to come to games being fans themselves. This relationship between fan types necessarily underscores this broad definition of a fanbase in order for it to be self-sustaining.
Further, these three elements do not carry equal weight and as such our review then potentially differs with past NHL expansions. While new ownerships and new arenas can be put into place, fanbases aren't as easily coaxed in new cities. Based on the evidence, we believe that a fanbase can be grown by an NHL team. However the seed for growth is grassroots hockey involvement which must already be in place or quickly take root for a team to have a long term and sustainable future.
A fanbase as so defined then carries at least 70% of a market's anticipated future in that location, an ownership group (15%) and a suitable arena (15%) split less than half of that fanbase value. Each element receives a score out of five. So the best average possible is 5.0 in either the balanced or weighted scoring systems.
In the case of Manitoba, for the first time ever, since the MTS Centre's opening in 2004, Winnipeg has all three necessary elements in place for a successful NHL team.
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Fanbase |
Arena |
Ownership |
(4) |
(4) |
(4) |
Manitoba Balanced Average Score: 4.0
Manitoba Weighted Average Score: 4.0
This website also devotes time in examining other cities potentially vying for an NHL team. (Click here for them.) Those reviews also follow the same three legged stool and weighted average approaches.
Myth Conceptions:
Myth #1: Arena Too Small
Fact: The MTS Centre capacity is 15,003. While this is smaller than other NHL arenas, most NHL games do not even come close to selling out.
14 American teams gave away over 1,000 tickets on average each game to boost attendance figures. And 6 of those teams gave away more than 2100 tickets per game.
In reality, the attendance at many games is regularly under 10,000. Actual paid attendance is even lower. A team in Winnipeg could easily draw more than most U.S. cities on a regular basis - with no giveaways. In short - the MTS Centre is more than big enough.
Myth #2: Ticket Prices Too High
Fact: There are many rumors floating around that tickets would average over $150. This is absolutely false.
The average NHL ticket price in the first season after the lockout was $52.13. Based on last yearâ??s figures, we could sell out each game at that low price and still pull in more money than half the teams in the league. This is because most U.S. teams give away thousands of tickets to each game or run 2-for-1 deals.
At these average ticket prices, Manitobans can affordably watch the NHL and have a successful team too.
Myth #3: No Ownership Group
Fact: True North Sports & Entertainment, specifically Mark Chipman, have repeatedly stated that an ownership group is in place. David Asper has also pledged his support. More recently, David Thomson has been identified by the media as the financial backing for this endeavour. As head of Thomson-Reuters, David Thomson is listed by Forbes magazine as the wealthiest Canadian. His real estate company, Osmington Inc., bought the land that the old Eaton's building stood upon, to become one of the original partners in True North Sports & Entertainment. TNSE is the company that owns the MTS centre, the land it occupies, the AHL Manitoba Moose and a thriving concert promotion business. Clearly, the ownership group is no longer an issue.
Myth #4: Population Too Small
Fact: Phoenix has approximately six times our population, and they have to resort to giving tickets away to fill the stands.
Fact: Edmontonâ??s population is comparable to ours - they barely give any tickets away and sell out games all the time.
Lesson Learned? A bad hockey market is a bad hockey market, regardless of itâ??s size.
Winnipeg is and always has been a good hockey market. And our population can easily support an NHL franchise with the new MTS Centre.
Myth #5: No One Believes It Can Happen
Fact: Many including the media, politicians, business people and hockey fans from around the US and Canada have put their support behind Winnipeg's return.
Some do for a sense of righting a wrong. Others see the future growth of the NHL in Canadian markets.
But most of all, most people knew that fan support wasn't the issue when the NHL left and feel for those who have lost their team.
Myth #6: Salary Cap Is Too High
Fact: The cap grows as league revenue grows.
It's very doubtful that Winnipegâ??s revenue won't keep pace with the NHL average. And its' also very doubtful that Winnipeg will average less than 14,000 sold seats per game. These are the 2 conditions for revenue sharing, assuming Winnipeg will need it. If it does, revenue sharing will be there to offset a growing salary cap.
The same can't be said for some of the teams already financially troubled.
Myth #7: Not Enough Corporate Support
Fact: The MTS Centre holds 50 suites. There is a waiting list of over 50. While prices are only 30 to 50% of NHL averages, the ownership group, through their private studies, has gone on record that they anticipate the corporate support will be there for the NHL's return. Since opening in 2004 the MTS Centre has been consistently near the top of North American and even World-Wide arena attendances.
Having a rink with large audiences for both hockey and non-hockey events helps sell in-event advertizing much easier. This also holds demand high for luxury suites and creates the highly valued non-hockey related revenues that can flow back to the hockey team as the ownership of the team and rink will be one and the same. NHL hockey was for many years the top priority for entertainment dollars in Manitoba and it will be again once it returns.
Manitoba remains poised to demonstrate to the NHL that it is ready with wallets open to jump back into the NHL. Respectful of the process, Manitoba waits until that NHL signal is given, and until then no one can truly say that this myth is busted.
Myth #8: No Teams Looking To Relocate
A perfect storm of lethal conditions approaches many NHL franchises. The non-traditional markets are held in less priority position by people in those markets that do not have that close connection to the game, having never skated, much less actually played the game. 10 plus years has shown that baseball, basketball, football and even NASCAR are still firmly entrenched in the minds and wallets of these markets, with the NHL making barely a dent in media coverage. Inflated attendances count both complementary and sold tickets where no one actually is at the rink. Ticket deals have reached the absurd for both hockey fans and economists alike, while the few season ticket holders are peeved by the slight to their loyalty. The new CBA in its 3 years has balanced the financial playing surface, in reaching cost certainty, but market revenue uncertainty for some teams is the real issue. The housing market collapse has hit the southern US very hard. And now the economy may be going into the deepest recession this generation of hockey players have never seen. While the NHL has reached new records of total revenues, many teams' revenues have stayed flat or dropped in the last 5 years. Suffice to say, whether the NHL wants to admit it and suffer a loss of perceived inflated franchise values or not, there are several teams looking to relocate, before bankruptcy becomes their only option.
Myth #9: Not Enough Premium Revenue Streams
Fact: The past Winnipeg Arena had a total of 14 "luxury" boxes that held a small TV, bar fridge, table and set of chairs. The arena was controlled by a city-owned landlord, Winnipeg Enterprises Corp., that retained all revenues related to concessions, liquor, most in-game advertizing and even parking. All arena events outside of NHL home games (aka. non-hockey related revenues) created revenues that the hockey team did not receive. The team received ticket sale revenues where at least 800 seats were obstructed views on an arena that was expanded in the late 1970's to gain entry into the NHL as a temporary basis to buy time to build a new rink.
The team left in 1996, with the rink never replaced until it was spearheaded by a private sector group called True North.
Winnipeg need not hear any lessons about premium revenue streams such as executive lounges, club seating and personal seat licences. All of these issues and more were debated ad nauseum from 1978 until 2004. Most of those lessons, although falling on deaf ears while the Jets were in town, were taken to heart by True North, owners of the MTS Centre and the land it occupies. True North are the leaders that would also own an NHL team, allowing for the team to effectively own its' own rink, which is the case for every successful NHL team. Being a rabid hockey market, the AHL Moose are currently bringing in new revenues streams like internet game broadcasts and hockey shows among others that some NHL teams can only dream about.
In short, the arrival of the MTS Centre has brought almost every conceivable premium revenue stream to life.
Myth #10: Reasons The Jets Left
Fact: The past Winnipeg Arena, built in the 1950's, was controlled by a city-owned landlord, Winnipeg Enterprises Corp. WEC retained all non-hockey related revenues, charged the Jets rent and even kept in-game revenues related to concessions, liquor, most in-game advertizing and even parking. The rink was expanded in 1979 in order to join the NHL as a temporary measure to buy time for a new rink to be built. The Jets left in 1996 with the rink having never been replaced until it was spearheaded by a private sector group called True North. As locals can atest, the past rink's decor was cinder block based and the restrooms were inadequate to say the least. Fans came to events in spite of the arena, where even 800 seats had obstructed views.
In spite of all of those roadblocks, NHL attendances for Jet seasons were modest but certainly not a concern as some now might try to revise history. An overall NHL attendance for the Jets was around 13,200, which is now considered to be small. However, the league average attendances from the same years 1979 to 1995 was 10,710 to 14,797.
It should be noted that these same Jet attendances would outdraw several teams right now in the NHL who have also inflated their attendances with freebies just to reach these numbers. Realistically, it is anticipated that the more inviting and comfortable MTS Centre will bring out crowds better than those in the past.
Beyond the Jet years, the minor league Manitoba Moose in their entire history have consistently been near the top of AHL and IHL yearly attendances. While it can't be compared to filling a rink for NHL hockey, it demonstrates support as good as anywhere where the NHL is not at present. The Moose have the luxury of running its' own internet PPV game broadcasts and hockey shows, which also demonstrates that the fans are not only in sufficient numbers but are also willing to part with cash, even to support a farm team of a past heated Western Canadian rival.
Manitoba fans have come to expect first class hockey. The Moose to their credit and survival ensure they make their games feel just like NHL productions, much moreso in comparison to past Jet experiences.
For those who flippantly say that fans in Winnipeg could not afford to double or triple the 1996 NHL prices to support NHL hockey currently, can they honestly also say they believed in 1996 that fans in Manitoba would be a top draw in the AHL paying nearly double the 1996 NHL prices just to watch minor league hockey? Manitoba Moose prices have been some of the highest league-wide each season in both the IHL and now the AHL.
The Jets ownership went on record that the only reason the team left town was due to the lack of a new arena or firm committment to build one. Barry Shenkarow clearly stated this is not an issue related to the fan support, both individual and corporate.
In short, the fanbase is one of the best and most secure in the world, certainly capable of supporting the NHL now that the new rink is in place with all revenues streams able to go to the team via a singular ownership group.
Myth #11: NHL Doesn't Want Winnipeg
Fact: Those outside of NHL circles may be supportive of Winnipeg's return, but what really matters are those inside this loop. This inner circle of players, agents, coaches, general managers, owners and board of governors have been very vocal for Winnipeg's return. Even the leader of the players association has been quoted several times as looking towards Manitoba's capital. Both top brass of the NHL itself, Gary Bettman and Bill Daly, have been quoted in throwing their support behind Winnipeg, almost like no other city in the past few years.
Myth #12: Canadian Dollar Too Low
Fact: While the Canadian dollar will always rise and fall against the US currency, a team in Manitoba will have to be able to outlast a dollar anywhere between 60 and 110 cents. The dollar has a large effect on the fortunes of the team, but it is not the largest. Because some revenues are in US currency while most expenses outside of team payroll are in Canadian dollars, a swing of 20 cents is worth about $8 million per season to team finances. Team management and ownership can mitigate this effect to a large degree through a number of ways including hedging currencies by laddering investments and loans and offsetting or deferring team payroll to higher dollar years.
A huge difference from 1996 is the NHL CBA containing a much more generous revenue sharing system than what the Canadian currency assistance plan ever was. It allows Canadian teams whose revenues are reduced because of currency effects to receive this much larger top up. Conversely, while the dollar is high, US teams will receive equalization the opposite way. Annual revenue sharing in excess of $12 to $15 million (US$) have been paid out to individual teams in the two past seasons which demonstrates that currency effects can be managed a number of ways.
