• Star Posts 2010-11 NHL Ticket Revenue Numbers

    by Tyler Dellow • January 2, 2012 • NHL • 14 Comments

    The occasional leaking of NHL financial data to the Toronto Star is always a fun reminder of the extent to which the NHL exists to rip off Canadians and hockey fans.

    The confidential document shows that the six Canadian NHL clubs last season accounted for about 33 per cent of the $1.2 billion (U.S.) in league ticket revenue. In 2007-08, Canada’s six teams represented 31 per cent.

    The report, which was obtained by the Star from several league sources, suggests operating a club north of the border is much more lucrative for the NHL. Five of the top six-revenue generating clubs are based in Canada, with the New York Rangers being the lone team from the U.S. in that group.

    I’ve copied the full table from the newspaper, which isn’t online, and posted it here. Twitter’s Mike Moffat ran the applicable exchange rates and came up with a dollar worth

    Wraps self in flag. Lots of things jump out at me. You could quite reasonably say that it’s more lucrative to be the worst team in the NHL for two years running in Edmonton than it is to win the Stanley Cup in the United States. But, of course, the market is tiny: give us a rink or we’re moving the team. The story doesn’t get into information about sponsorship and broadcast revenues, unfortunately; I’ve never understood why whoever leaks this information doesn’t also leak that. George Malik over at Kukla’s Korner has some pretty hilarious spin on the whole thing:

    it should be noted that this is only a partial picture. Without knowing what teams take in from broadcast agreements, TV, radio, print and online sales, sponsorships and signage, suite sales, merchandise sales, concessions and even parking fees, one cannot determine the entirety of a team’s gross revenues per home game…And it’s hard to tell kids who play hockey in California, Texas and Florida that the NHL’s “grand experiment” of expanding to the sunbelt was a failure away from the rink.

    At the risk of being heartless…I don’t care about kids who play hockey in California, Texas and Florida. I grew up playing hockey without the benefit of an NHL team in the same city. Kids in the Maritimes do. Kids in Canada are watching the Premier League and playing soccer now. Who cares.

    I would suspect that a lot of the in-arena stuff is driven by the amount of butts in the seats, with the teams that charge more possibly being able to charge more for that stuff as well, although I’d suspect the spread to be smaller than ticket prices. I sometimes notice US teams doing promotions with cheap in-arena food and drink; you don’t get those here. I don’t think the Predators or Coyotes are crushing the Oilers in hot dog revenues per patron though. It doesn’t make sense.

    As for sponsorship, I’ve got to think that those dollars are going to be driven by the prestige of the brand – there’s more prestige in being associated with the Edmonton Oilers than the Tampa Bay Lightning, for example. TV’s going to be driven by the value that the market places on the eyeballs watching and listening to the games. It’s well known how abysmal the NHL’s TV ratings are throughout the United States – the same teams that dominate in ticket sale revenues dominate the list of teams that are most watched. Canada is a wealthy country and hockey draws like no other sport. It’s a silly comment from Malik.

    But, of course, Edmonton is tiny: give us a rink or we’re moving the team. To somewhere more profitable, where nobody cares about hockey, fewer people will watch and we’ll rake in $700K a night in ticket sales or something. If you’re Mark Spector, or one of the many other Edmonton media guys who implicitly made this argument…I don’t know how you live with the embarrassment of having made it. It was obviously dumb at the time, but having yet another set of numbers that confirms just how dumb it is – man. If the Canadian dollar fell to about 73.8 cents, the Oilers would have league average ticket revenue, all other things being equal. Of course, the league average ticket revenue would also fall substantially, given how much of it comes from Canada. So the real number is lower. But yeah, Edmonton’s a hiccup in the dollar away from being Winnipeg.

    I’ve written before about the astonishing amount of money that flows out of Canada and to the United States to fund NHL hockey there. National TV deals are shared and Canada – with only seven teams – generates far more revenue per team or per capita than does the US. I would suspect that Canadians buy a grossly disproportionate amount of NHL memorabilia – all of this money is shared equally amongst the thirty teams. It’s likely that at least five of the Canadian teams are paying revenue sharing. Going by memory, James Mirtle estimated that the Winnipeg Jets would hit $50MM in annual ticket revenue, which would probably put them into revenue sharing payment territory or very close to it – it would have put them seventh on last year’s revenue list. I think you can probably conservatively say that there’s at least $200MM flowing out of Canada annually to fund hockey in places that don’t care about it the way that we do.

    This is enraging stuff and exposes just how rotten the NA system of sporting monopolies is. How much better off would be with a European type system here, one where the central authority was much weaker and the number of teams in a city was determined not by the financial interests of the league and players but by the interest of the community in supporting teams? Looking at these numbers, you wonder if Toronto couldn’t support three teams and Montreal and Vancouver two. A promotion/relegation system would let the market sort out how many teams could be justified in those places, rather than owners who are interested in preserving their local monopolies.

    The present system lets the players in Nashville and St. Louis get rich off the interest that Edmonton and Calgary have in the game and provides the Canadian owners with a way to veto competition in their own markets. It lets what’s gone in on Edmonton for the past six years happen without consequence to ownership. It’s awful. While I’m not usually big on government interfering in private enterprise, I’d be heavily in favour of some sort of punitive taxation on centrally generated NHL revenues in Canada – I’d rather the money was spent on healthcare here than on the salaries of guys playing in American cities that don’t care about hockey. Throw a 300% tax on the sale of NHL merchandise in Canada and a 90% tax on the sale of national TV rights.

    We may not be able to force them to respond to the interest that this country has in NHL hockey by putting, like, five or six more teams here, but we don’t need to let them fund the NHL in America on Canada’s dime.

    (See also: Mike Moffat’s fine post on the topic.)

    About Tyler Dellow

    14 Responses to Star Posts 2010-11 NHL Ticket Revenue Numbers

    1. Triumph
      January 2, 2012 at

      Sports represent a strange middle ground between capitalistic impulses and unbending faith. What I mean is that the mere planting of a second team in a market to ‘better serve it’ doesn’t always result in better service, nor does that franchise fill a necessarily existing void. Brand loyalty is ridiculously high in the sporting world.

      What I’m saying is that if you put a second team into a market, how many people are going to be fans of that team? I suppose had the NHL grown organically in the way that you’re suggesting, many of these cities could have multiple NHL teams (although I’m skeptical that Vancouver could support 2 teams). There’s a market demand for tickets to professional hockey, will that necessarily lead to support for a 2nd franchise? What if the second team is forced to put its arena well outside the center of the city, or in a region that will necessarily exclude certain ‘nearby’ regions from being attending fans?

      We can see this manifest in the absurd claim of the Star that the New York Islanders are located in the biggest media market. No they’re not. Uniondale, New York is not the biggest media market in the US. Even if you took Long Island as an entity unto itself, which it most decidedly isn’t, it would not rank in the top 10 of US media markets, and possibly not even in the top 20.

      I’m not going to get into promotion and relegation – it has its adherents and detractors and pros and cons.

    2. Josh
      January 2, 2012 at

      I like how Mike Moffat apparently works for Twitter now.

    3. garik16
      January 2, 2012 at

      Triumph:

      “We can see this manifest in the absurd claim of the Star that the New York Islanders are located in the biggest media market. No they’re not. Uniondale, New York is not the biggest media market in the US. Even if you took Long Island as an entity unto itself, which it most decidedly isn’t, it would not rank in the top 10 of US media markets, and possibly not even in the top 20.”

      Two things:
      1. While I agree with this sentiment as an Isles fan, the Isles are getting paid for their TV rights as if they’re a major market team (20M per year apparently), due to an overreaction by the Dolan Family (owners of the Rangers, Knicks, Cablevision, and MSG Networks) in 1999 in signing the team to a 30 year TV Deal. As a result, yeah….they’re not really a major market team…but in being paid like one for their TV rights, its not a terrible stretch to call them as such.

      2. Far less relevantly, the Isles are on TV media that encompasses the entire NY Metro Area, which is where that statement comes from.

    4. RICK
      January 2, 2012 at

      Most of the articles written about this Leak are very poorly written. The NY Islanders are NOT in a large media market at all. if you were to drive from NYC (manhattan) to uniondale for a 7pm game, you would need to leave NYC by 4:30 to be in your seat on time. If you would like to take public transportation to that same game, plan on leaving at around 3:45 to get there on time. The articles also do not take into account other ways teams make money. The Islanders have one of the lowest ticket sales per game, with one of the lowest attendance rateS. Heres what is left out and im sure its left out of many teams numbers. The NY Islanders run at around an $8m (us dollars) loss not including their TV deal which is currently worth over $22m /year(and lasts till year 2030), this puts the NY Islanders in the top 6-10 teams in the league. I think only the top 5 or 6 teams bring in more than $10m profit per year.

    5. Triumph
      January 2, 2012 at

      garik:

      The article was about ticket revenues ONLY – to that end, the Islanders are simply not in the largest media market in the US, or even close. What I surmise the sentiment comes from, rather than the tv deal (seriously, what does the TV deal have to do with this claim?), is the Canadian media’s general ignorance of geography, where on TSN the Devils still play in the ‘swamp’ despite moving 4+ years ago. Long Island isn’t New York City. Given the Islanders’ lack of success over the last 20 years, their lack of ticket revenues is not surprising.

      I think this also speaks to mc79hockey’s larger point about 2nd franchises in Canadian cities – I do wonder how one of them would be treated in their market if it happened.

    6. garik16
      January 2, 2012 at

      Rick:

      Most of the articles written about this Leak are very poorly written. The NY Islanders are NOT in a large media market at all. if you were to drive from NYC (manhattan) to uniondale for a 7pm game, you would need to leave NYC by 4:30 to be in your seat on time.

      Ummm, no? It’s an hour away at best from Manhattan to Uniondale (not 2:30 wow!) by car.

      Now this doesn’t make the travel situation good by any means – most people in Manhattan DO NOT HAVE CARS and thus can’t really get to Islanders games conveniently…..including the many young Islander Fans who move to Manhattan after HS/College (I’m one of these kids myself). But there’s no need to exaggerate the travel time…that’s just obnoxious.

      —-

      Triumph:

      The article was about ticket revenues ONLY – to that end, the Islanders are simply not in the largest media market in the US, or even close. What I surmise the sentiment comes from, rather than the tv deal (seriously, what does the TV deal have to do with this claim?), is the Canadian media’s general ignorance of geography, where on TSN the Devils still play in the ‘swamp’ despite moving 4+ years ago. Long Island isn’t New York City. Given the Islanders’ lack of success over the last 20 years, their lack of ticket revenues is not surprising.

      “Media Market” does not imply simply where tickets are sold, it implies the reach of a team by “media.” Certainly the article was about tickets, but the concept encompasses all of it. And the team is not that from from “New York City” – the Queens border is basically 20 minutes away. The classic example I’d point out is that the Isles are closer to New York City than the New York Giants or Jets, which are often talked about as being NYC Teams. The situations are not comparable – and the Islanders’ actual reach for tickets does not extend far into NYC – just basically into parts of Queens at best. But the term isn’t necessarily wrong, just misleading.

      (We’re arguing semantics here).

      • rick
        January 3, 2012 at

        Garik16… Have you ever driven from the middle of manhattan to Long Island with the intent on arriving in uniondale at 7PM on a weekday??? You sit through 2 hours of rush hour traffic on the LIE or grand central/northern st pkwy. I lived in Westbury (5-10 minutes from Nassau coliseum) for 32 years and work in the city. I do that drive daily. From walking out of work till i would get in the door at the coliseum is around 2 and a half hours. Im also sure you know what public transportation in Nassau county is like. Subway to Train to Mineola/westbury/or Hicksville, then cab ride or 2-3 bus transfers to hoftra or NCC, then walk to the coliseum.

        If the game were on a weekend, you are correct, the drive would take approximately 1 hour, maybe hour and 15 mins.

        Comparing the Islanders who play 42 home games a year to the jets or giants who each play 8 (and have very easily accessible public transport from NYC , is comparing apples to oranges.
        The only area of NYC that is closer to the islanders than the Meadowlands is eastern queens. from midtown to the meadowlands is 9.3 miles. midtown to uniondale is 25 miles. The split is basically Jamaica queens. So 85% of NYC is closer to the Jets and Giants.

    7. Triumph
      January 2, 2012 at

      garik:

      I’ll leave it at this, but that’s precisely my point re: media. The Islanders and Devils are almost never on the backpages of the New York tabloids and they both get cursory coverage by the mass media in New York. Ditto the Nets – I’ll be curious to see if this changes when the team moves to New York (I don’t think it will).

      Anyway, this is off of Tyler’s larger point, which I by and large agree with, though I don’t support it emotionally.

    8. RiversQ
      January 2, 2012 at

      Gee, where is David Staples when you need him?

      I really need somebody to explain this in terms I can understand. You know, frame it so I can pretend Edmontonians aren’t fucking morons.

    9. January 3, 2012 at

      But, of course, Edmonton is tiny: give us a rink or we’re moving the team. To somewhere more profitable, where nobody cares about hockey, fewer people will watch and we’ll rake in $700K a night in ticket sales or something. If you’re Mark Spector, or one of the many other Edmonton media guys who implicitly made this argument…I don’t know how you live with the embarrassment of having made it. It was obviously dumb at the time, but having yet another set of numbers that confirms just how dumb it is – man. If the Canadian dollar fell to about 73.8 cents, the Oilers would have league average ticket revenue, all other things being equal. Of course, the league average ticket revenue would also fall substantially, given how much of it comes from Canada. So the real number is lower. But yeah, Edmonton’s a hiccup in the dollar away from being Winnipeg.

      I feel like there’s something obvious that I’m missinghere, and as I’ve always been somewhat skeptical of expanding/relocating to smaller areas of Canada because of the dollar issues having a higher impact when you get into smaller markets, I’m curious to know what it is, so… if EDM is doing so great now, and would still be quite viable even if the CDN$ tanked vs the USD$, why was EDM in so much trouble 15 years ago? Obviously the CDN dollar was lower than the hypothetical 0.73 USD given here (as I recall, it reached down to about 0.60), but what else is different between the mid 90′s and now?

      I eagerly await someone pointing out the astoundingly obvious point that went over my head here.

      • January 3, 2012 at

        Ah, Moffat’s piece helped considerably – if CDN $ isn’t worth much, generally speaking, this means people have less disposable income to spend on a hockey team, which hits harder in a smaller market like EDM.

        Which, to me, makes Tyler’s contention that hockey in EDM would be totally fine if the CDN dollar tanked to be somewhat disingenuous. Not that I believe a new arena would help the Oilers much if such a thing should come to pass, but it does pretty dramatically alter the situation a bit, does it not?

      • dawgbone
        January 4, 2012 at

        They were in trouble because fans stopped going to the games. The Oilers were down to under 13,000 fans per game in 1996. So not only do you have a $0.60 dollar, you have a ~25% drop in attendance as well.

    10. Tom Benjamin
      January 3, 2012 at

      if EDM is doing so great now, and would still be quite viable even if the CDN$ tanked vs the USD$, why was EDM in so much trouble 15 years ago? Obviously the CDN dollar was lower than the hypothetical 0.73 USD given here (as I recall, it reached down to about 0.60), but what else is different between the mid 90′s and now?

      Very little. There were plenty of reasons to be skeptical of the dire claims being made 15 years ago. The Canadian teams were crying poor and trying to get the Feds to give them a big subsidy. It very nearly worked until the public outrage killed a plan to give millions to the Canadian franchises every year. Note that none of the dire claims made then came to pass even though no government money was invested.

      They did not give us any better information 15 years ago. They have many good reasons to deceive us about the financial state of the game or the team. Whenever it suits them, they do deceive us. Even with a 60 cent dollar, Winnipeg and Quebec City would have stayed put if someone had built either team a new rink.

      The Edmonton Oilers have been an excellent business to own ever since they came into the league. I don’t think anyone who looks at their history can deny that. Yet its always been a hairbreadth away from collapsing or moving. After 30 plus years of it, I am surprised that the “poor us” claims remain credible.

      If the Canadian dollar collapses again – very, very unlikely in even the medium term in my opinion – Edmonton would be hurt, but I’d still rather own them in those (probably temporary) circumstances than own any of about 15 American franchises.

      In Rexall.

    11. Paul
      January 4, 2012 at

      I sorry I can’t cry that big of river for Canada.

      Now on balance I agree the fact is Hockey is and remains a regional sport in North America – Canada and certain Northern US states. I think the recent attempt to expand the NHL in the US has been a failure – but be honest its clear the the biggest road block to a second team in Toronto is not the NHL but the Leafs organization.

      The Canadian dollar can change in value and the US won’t always be mired in a recession or slow recovery compared to Canada. For most of the history of the NHL Canada has it share of advantages and teams some of which failed (certainly there was no evil Bettman who moved the cougars to Detroit). And if we could please step away from are Canadian sense of superiority ( I mean really what does say that the Leafs make so much money putting a loosing team on the ice year after year…):

      “I don’t think the Predators or Coyotes are crushing the Oilers in hot dog revenues per patron though”

      But I suspect Detroit and Boston do since they hay have more revenue in a poorer economy.

      Overall I think it would be good for the NHL to step away from any grand ideals of being a Big sport rival to the NBA or NFL and focus first and foremost on being a healthy regional sport first. I like to see the simple ideal of market size be tossed, warping up the failure in Phoenix would also be a good step.

      “Even with a 60 cent dollar, Winnipeg and Quebec City would have stayed put if someone had built either team a new rink. ”

      But that’s the rub nobody did or was willing to buy them and loose money in the short run.

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