Can Winnipeg Support an NHL Franchise?

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    davetherave
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    Can Winnipeg Support an NHL Franchise?

    Post by davetherave on Thu May 21, 2009 9:55 am

    Lyle Richardson offers his analysis and perspective. From his column at Fox Sports:

    Can Winnipeg Support an NHL Franchise?
    May 20, 2009 | Lyle Richardson, FoxSports.com

    During the contentious bankruptcy hearing between the National Hockey League and Phoenix Coyotes owner Jerry Moyes an interesting piece of news emerged suggesting League commissioner Gary Bettman
    would prefer the Coyotes move back to Winnipeg, Manitoba rather than moved to Hamilton Ontario, the latter being a possibility should Canadian billionaire Jim Balsillie gain control of the team.

    NHL deputy commissioner Bill Daly said moving the team to Winnipeg was considered only if there were no other options.

    "In the event there turned out to be no options in Phoenix - and only in that event - we thought it was worth exploring what might be available in Winnipeg," Daly said in an email in reaction to the latest documents.

    That’s likely to thrill hockey fans in Canada in general and Winnipeg in particular; after all, the Coyotes were originally the Winnipeg Jets and moved to Phoenix back in 1996.

    This isn’t the first time the league has mentioned the possibility of bringing an NHL franchise back to Winnipeg. Nearly two years ago Bettman
    suggested the possibility in a press conference:

    “When we had the chance to go back to Minnesota, we did. Because it made sense – the right ownership, the right building situation. The market was strong and vibrant. We haven’t studied Quebec City or Winnipeg or anywhere else in Canada, but the notion that if it could work to put a franchise back in a place where one was lost, feels good – provided we don’t wind up in a situation where we’ve created a prescription for another failing franchise.”

    Take note of the last seventeen words: “provide we don’t wind up in a situation where we’ve created a prescription for another failing franchise”.

    In other words, just because it might feel good to bring another franchise back to Winnipeg the league must ensure a franchise can survive there.

    Daly said it might be worth exploring what might be available in Winnipeg, so let’s have a look.

    First, the
    population of the city of Winnipeg is currently estimated for 2009 at less than 670,000, while its greater metropolitan area (the city plus its surrounding municipalities) is projected at less than 729,000. The entire population of the province of Manitoba (Winnipeg included) is estimated this year at just over 1.2 million.

    That would make Winnipeg the smallest market in the NHL, the same problem it had back in the 1990s. The metropolitan area only increased by roughly 50,000 since the Jets were moved in 1996.

    Compare that to Edmonton, presently the smallest Canadian city to hold an NHL franchise. Edmonton’s
    current population estimate is over 752, 000, but its metropolitan population is over 1.1 million, dwarfing Winnipeg’s by roughly 400,000 people.

    Compared to the rest of the
    Canadian cities which hold NHL franchises Winnipeg is at a distinct disadvantage.

    A significant factor in Winnipeg losing the Jets was there was no new facility built or planned to be built at the time to house the team.

    Today, Winnipeg has the MTS Centre, which opened in November 2004 and seats 15, 015 fans. That’s small by NHL standards as most NHL arenas can seat over 17,000 fans but it’s been suggested the MTS Centre could accommodate additional seating.

    Some who believe an NHL franchise can survive in Winnipeg today claim the size of the MTS Centre doesn’t matter, since sellouts of 15,000 would be better than the current situation for some struggling US-based teams where the arenas are larger but are only half-filled.

    The problem however is there’s no guarantee a franchise in Winnipeg would consistently see sellouts.

    Looking back over the
    Jets final seven seasons, their average attendance figures were well below the 15, 500 capacity of the old Winnipeg Arena. From 1989-90 to 1995-96 their average attendance hovered around 13,000.

    What likely affected those figures was uncertainty over the franchise’s future, particularly in the final two-three seasons, plus the club’s record during those particular years as well as the team’s inability to retain their best stars.

    Still, those figures are worth noting when considering the possibility of bringing a franchise back to Winnipeg.

    It can be argued that fans back then took the Jets for granted and if the NHL returned they’d turn out in droves to support a new franchise.

    That however remains to be seen given the cost of attending an NHL game today.

    The average price of a Jets ticket in
    1994-95 was $22.35 US. The average cost fan cost index (ticket prices for a family of four plus concessions and parking) was less than $135.00 US.

    Today, the
    average ticket cost for an NHL game is almost $50 US, and the average fan cost index $288.23 US.

    It can be argued those prices are inflated due to higher prices charged by larger markets, so let’s examine the cost of attending an Ottawa Senators game, as they charge the most affordable prices of all Canadian based teams.

    The average ticket price for a Senators game was $48.82 US, and the fan cost index was just over $276 US. Convert that latter number into Canadian dollars and that’s nearly $325.00

    A franchise in Winnipeg would have to charge as much as the Senators or close to it if it hoped to make money, which could make them a difficult sell in a small market like Winnipeg, particularly when those prices would keep rising to keep pace with the rest of the league.

    The problem of course is that they can only charge what the market can bear, and if it can’t bear significant increases to keep pace with the rest of the league that could put the long-term future of the franchise in jeopardy.

    I’ve heard it suggested that a Winnipeg franchise could count on considerable support from fans coming from towns like Brandon, Portage la Prairie and Selkirk.

    They would undoubtedly get some support from those towns, but factor in the aforementioned cost of attending games plus fuel costs, which are considerably higher today than they were in the mid-1990s, for round trips of 1-2 hours or more and suddenly that becomes an expensive entertainment option to do 41 times a year not counting pre-and-post season games.

    It’s uncertain how much corporate support an NHL franchise in Winnipeg could count on. Doubtless they could rely on decent corporate season ticket sales but compared to what the larger Canadian markets enjoy it might not be as lucrative.

    A Winnipeg franchise wouldn’t be able to count on the same kind of lucrative broadcasting revenue its larger Canadian peers enjoy because of its market size.

    It’s been suggested the salary cap would make it feasible to bring a franchise to Winnipeg, but with the cap currently at $56.7 million and the cap floor at $40.7 million such a small market team might be hard pressed to stay over the cap floor.

    While the cap does fluctuate and could decline in the near future it likely won’t drop back to the $39.5 million cap of 2005-06.

    Ultimately, it appears that Winnipeg remains too small to support an NHL franchise.

    The biggest hurdle remains the lack of a potential bidder to bring an NHL franchise to Winnipeg. In the thirteen years since the Jets left town there’s been no individual or group contacting the league with a serious bid for either an existing franchise or a potential expansion franchise.

    One would think if there was serious interest from the Winnipeg business community, the city of Winnipeg or the province of Manitoba to land an NHL franchise it would’ve materialized in the form of a bid for the Pittsburgh Penguins in 2006, the Nashville Predators in 2007 or the Phoenix Coyotes today.

    Until a serious bid is made the dream of an NHL franchise in Winnipeg remains just that: a dream.


    ---

    Richardson's reached his conclusions...what are yours?
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by wprager on Thu May 21, 2009 10:03 am

    Ultimately, just about any serious Canadian city will get more revenue than the bottom 2-3 US franchises. Winnipeg may not bring in the revenue of a Calgary, but they can surely outdraw Phoenix. When's the last time you heard of a Canadian city having to give away tickets with the purchase of a bottle of Vodka? Because that's what Phoenix did last year. Buy a bottle of Vodka, get a pair of tickets to see Phoenix. Buy two bottles and you only have to take *one* ticket.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by SeawaySensFan on Thu May 21, 2009 10:05 am

    I'm sure the Winnipeg business community would make a serious bid if there were indications that the NHL would be receptive to re-locating one of Pittsburgh, Nashville or Phoenix to a Canadian city.

    Thus far, it's been made prefectly clear that a bid would be a waste of time and money.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by Cap'n Clutch on Thu May 21, 2009 10:05 am

    I've never thought a franchise could survive in Winnipeg. I think it would be a feel good story since there are some rabid fans there but I don't think it's a financially viable option.

    It would take a Billionaire owner that loves Hockey and doesn't mind losing millions of dollars every year on it.


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    Re: Can Winnipeg Support an NHL Franchise?

    Post by SeawaySensFan on Thu May 21, 2009 10:07 am

    Cap'n Clutch wrote:I've never thought a franchise could survive in Winnipeg. I think it would be a feel good story since there are some rabid fans there but I don't think it's a financially viable option.

    It would take a Billionaire owner that loves Hockey and doesn't mind losing millions of dollars every year on it.

    It would also take an NHL commissioner that wants a team in Winnipeg.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by Cap'n Clutch on Thu May 21, 2009 11:22 am

    SeawaySensFan wrote:
    Cap'n Clutch wrote:I've never thought a franchise could survive in Winnipeg. I think it would be a feel good story since there are some rabid fans there but I don't think it's a financially viable option.

    It would take a Billionaire owner that loves Hockey and doesn't mind losing millions of dollars every year on it.

    It would also take an NHL commissioner that wants a team in Winnipeg.

    Well to be fair this thread wasn't about whether or not a team will end up in Winnipeg but whether one could survive there financially so your point really doesn't apply here Wink


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    Re: Can Winnipeg Support an NHL Franchise?

    Post by dennycrane on Thu May 21, 2009 11:54 am

    A team could survive in Winnipeg when the dollar was at, or close to, par. The arena is small, but it was designed so that the roof could be raised, adding another few thousand seats.

    There is no doubt that Winnipeg would support an NHL team better than some existing markets. Winnipeg could support a team up to a salary of 40-45 million. What they would need is a single owner like Melnyk or Balsille who will eat ten million per year in losses.

    PRO Winnipeg: Fan support, some corporate support, strong local TV money.
    CON Winnipeg: Canadian dollar, taxes compared to US cities, current arena size.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by PTFlea on Thu May 21, 2009 11:55 am

    dennycrane wrote:A team could survive in Winnipeg when the dollar was at, or close to, par. The arena is small, but it was designed so that the roof could be raised, adding another few thousand seats.

    There is no doubt that Winnipeg would support an NHL team better than some existing markets. Winnipeg could support a team up to a salary of 40-45 million. What they would need is a single owner like Melnyk or Balsille who will eat ten million per year in losses.

    PRO Winnipeg: Fan support, some corporate support, strong local TV money.
    CON Winnipeg: Canadian dollar, taxes compared to US cities, current arena size.

    Interesting, I didn't realize they constructed it so the roof could be raised if they could lure NHL hockey back. I probably should have looked into it more, because when they first constructed it, I was calling them dumb arses.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by SeawaySensFan on Thu May 21, 2009 12:19 pm

    Cap'n Clutch wrote:
    SeawaySensFan wrote:
    Cap'n Clutch wrote:I've never thought a franchise could survive in Winnipeg. I think it would be a feel good story since there are some rabid fans there but I don't think it's a financially viable option.

    It would take a Billionaire owner that loves Hockey and doesn't mind losing millions of dollars every year on it.

    It would also take an NHL commissioner that wants a team in Winnipeg.

    Well to be fair this thread wasn't about whether or not a team will end up in Winnipeg but whether one could survive there financially so your point really doesn't apply here Wink

    OK.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by shabbs on Thu May 21, 2009 12:24 pm

    The value of the Canadian dollar vs the US dollar plays a big role. I've always had my doubts about whether or not Winnipeg, Quebec and anywhere in the East Coast could properly support an NHL team.

    Perhaps now with profit-sharing and a cap it can be done... but I still have my doubts. With the density of population in southern Ontario, it seems like it should be a slam-dunk, but we'll only ever know if it does happen.

    NOTE: the population of the ENTIRE province of Manitoba is just over 1 million. You gotta have the population to support it.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by SeawaySensFan on Thu May 21, 2009 12:28 pm

    We don't know for sure how Winnipeg would work in the cap system. We do know who consistently fails though. Who knows how the US dollar continues to trade higher than the Canadian Dollar. Even with the unknowns, I say the NHL succeeds in Winnipeg.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by shabbs on Thu May 21, 2009 12:31 pm

    SeawaySensFan wrote:We don't know for sure how Winnipeg would work in the cap system. We do know who consistently fails though. Who knows how the US dollar continues to trade higher than the Canadian Dollar. Even with the unknowns, I say the NHL succeeds in Winnipeg.
    It certainly can't be any worse than the bottom 5-10 teams in the NHL as far as profitability is concerned...
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by SensGirl11 on Thu May 21, 2009 12:42 pm

    I can't see why they can't survive there. What else is there to do?
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by SeawaySensFan on Thu May 21, 2009 12:46 pm

    SensGirl11 wrote:I can't see why they can't survive there. What else is there to do?

    The City of Winnipeg has to apply for a zip code and take it from there.
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    Re: Can Winnipeg Support an NHL Franchise?

    Post by shabbs on Thu May 21, 2009 12:56 pm

    SensGirl11 wrote:I can't see why they can't survive there. What else is there to do?
    Awww... c'mon... Winnipeg isn't that dull of a city.

    Wink

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