NHL Relocation: Give The Panthers and Coyotes a Chance
Whenever this is talk of NHL Relocation the conversation quickly turns into a debate of which city has better fans and “deserves” a team. NHL relocation is interesting as it has the opposite situation that the comparatively new league MLS has. For MLS the expansion game has been, let’s find a market where there is either a lot of youth soccer or a successful USL Pro team, build a stadium and boom we have a new team. For the NHL expansion has been a bit more complicated.
Yes there are quite a few arena’s around North America that either have been built or are being built that could house an NHL team (Las Vegas, Quebec City, Kansas City) but the NHL runs into a major problem; there are large swaths of America where hockey is not a traditionally popular sport.
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If you are in the slimy shoes of Gary Bettman, had to take that pot shot, ask yourself this question: “How many new eyes and new wallets are you opening to hockey if you put another team in Canada or in the New England area?”
The response maybe, “Well at least the seats would be full.” And you would be right. Quebec City, or Hartford would sell more tickets right now than the teams in Florida and Arizona but I don’t think that is the NHL’s long term goal. Since its inception the NHL’s life blood has been ticket revenue, but ticket revenue plateaus with things such as arena space and local conditions that dictate ticket prices.
Another factor is an established fan base. Locations such as Arizona and Florida had virtually no hockey exposure when teams were introduced to the market. This requires a different mindset when it comes to what to expect. If you are introducing an entertainment product to a market that has never had it before and it requires a significant financial investment, like a season ticket, you have to grow fans of that team.
Considering that the average buyer of a season ticket is in their mid 40’s and that for entry-level season ticket packages (flex plans, partial season) the average only drops to someone in their early to mid 30’s. So introducing a team to a market, trying to grow the game at a youth level with both participation and fandom and then waiting for those youth to advance in life to the point where they are purchasing season ticket holders would put the real-time frame of taking an area from little to no hockey influence and ending at sustainable successful NHL franchise at roughly 25-30 years.
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The Rat Trick
In the last thirty years the NHL has either relocated or expanded thirteen times. Nine of those would be into areas that would not be classically thought of as “hockey markets”: Florida, Tampa Bay, Anaheim, San Jose, Nashville, Dallas, Arizona, Carolina, and Columbus. Four of those teams have won Stanley Cups which would normally advance their fan growth.
But let’s take a moment to focus on the two teams that get beat up in the relocation game the most, Florida and Arizona. These two teams are in markets that have all four major sports teams so the competition is tough. On top of that they have had limited success. This is the big one, think of the kids that were five and younger when these teams came to town. That kid in Miami is now 28 while the kid in Arizona is 25. Both are outside of the range of being season ticket holders yet. They are still working out their career while most of the Arizona crowd of home-grown fans are either in
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or just getting out of college. Let’s give these kids a chance before we completely discount the fan bases in these two areas.
The other reason that the NHL is holding off on relocating these teams maybe because they are playing the long game when it comes to growing the sport. The most recent estimates I can find speculate that the NHL’s total revenue in 2013-14 was roughly $2.63 billion dollars. That is set to go up this year with the new deal the NHL has with Canadian broadcaster Rogers which will bring the NHL’s national TV income with both Rogers and NBC to roughly $548 million a year. That is by far the highest amount the NHL has ever gotten in television revenue, but imagine the dollar signs that appeared in owners eyes when they saw the potential demonstrated by other leagues.
The next closest team in TV revenue on a national level to the NHL is MLB, and it isn’t all that close. MLB’s deal with Turner, ESPN, and Fox brings in $1.03 billion a year. Well baseball plays more games you say, that’s a fair argument. Then let’s look at the NBA, the other 82 game winter sport, which brings in $2.66 billion a year off of it’s television agreements bringing it close to the $3 billion the NFL makes each year.
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Oil On Whyte
The NHL leadership is focused on the future of NHL revenues being tied less and less to ticket sales. Yes it maybe hurting them right now but as revenues grow through distribution of games through media the NHL is looking at growing in as large of markets as possible and very few of the relocation options from are larger than Phoenix or Miami.
Growing a fan base for a franchise takes time. It takes a lot of down years and lot of nights of looking at an empty building. In my opinion if these teams should move is based on the strategy that is being employed. If the NHL is content with just selling as many seats as possible then by all means move the teams. But if the league is really interested in growing the league into as many large markets as possible to capitalize on revenue streams through television and other media then allowing a few franchises to be loss leaders in populated affluent areas of the country is a strong forward thinking strategy.