Sens put Fans First, more NHL v. NBA Attendance

Busy day for me today as I work the Hockey games up here starting at 3 PM, so this will be my only post today.

The Senators announced yesterday that they are starting a program called Sens Fans First; where 10,000 Value-Priced tickets will be available to children over the rest of this season and will continue into the '09-'10 season. On a smaller note, the final five Saturday home game practices will be open to the public under the Esso Gameday Experience.

There are 13 home regular-season games left for the Sens, which means 500-1,000 tickets will be available for the plan for each game for $20 Canadian, this includes a hot dog and drink in what is being called the Future Fans pack which is focused on the kids. Parents who will be bringing the kids to the game under this deal also get a cut as well, with their tickets being priced at $29 Canadian.

Finally, the Sens have more plans, this time for their season-ticket holders. The rest of the Sens Fans First campaign will be announced next week.

What to take of all this? Well, the Sens are the first Canadian team to really make a public showing of cutting ticket prices and providing deals in this economy. I like the idea, as the Senators have struggled all season and this will ensure that their attendance average and capacity don't suffer too hard. Plus, what I really like about this, is the focus on offering affordable tickets to children. I've always been a proponent of the NHL focusing their marketing on kids, as they are the future fans of the sport. Plus, if a kid has a great time at a game, they will always want to go back, and mom and dad will break out the wallet eventually.

Moving on...

Via my Team Marketing Report Weekly email, a nice story was put together by Dan Bulla, which focuses on the immense success thus far at the gate for the Chicago Blackhawks, and continues to compare some NHL and NBA attendance figures. We all know the Hawks are doing great, and are actually outdrawing the Bulls, but what really interested me in the story was this paragraph:

But the success even goes beyond the Capitals and Blackhawks. Looking across the league, the NHL’s numbers this year have been particularly strong, especially when seen alongside the NBA. There are 10 venues that host both NBA and NHL teams in North America—and since the Staples Center holds the Lakers, Clippers, and Kings, there are 11 solid NBA/NHL comparisons. If we look at the average percentage of capacity filled per game in each of those 11 instances during the 2008-09 season, the NHL is outdrawing the NBA in 7 of the 11.

With this information stated, I went on the research offensive. Below is an expansion of what Bulla states, that the NHL is outdrawing the NBA in 7 out of 11 shared venues between the leagues in attendance capacity. All figures from the respective NHL and NBA attendance charts from ESPN.


As you can see, the NHL is directly winning in 5 out of 8 markets as noted by the highlighter. The Kings are outdrawing the Clippers, but not the infamous Lakers, so that moves our count up to 6. In Denver, although the Nuggets are technically winning by a slight margin, I call for a tie because of the major number of 87 % being the majority. So, the NHL is outdrawing the NBA in 6 out of 10 markets where NHL and NBA teams share an Arena. Not bad at all.

Bulla raises one final question at the end of his article. He mentions that the NHL was in a similar position back in the mid-'90s where they were challenging the NBA for the #3 spot in the big four ranking (Above is the cover from a spring of '94 issue of Sports Illustrated; any NHL diehard remembers it). He doesn't give his prediction, but he says that it is closer than many NBA fans, and ESPN, would like to think.

That's all for today, I'll see if I can get one in tomorrow before I hit up another day of work, but if not check back Sunday afternoon. Thanks for reading, as always.

Slow Day...

Slow day in terms of business news and basically stuff I can write about. I'm still waiting for some clarification on some revenue-sharing related CBA questions before I can move ahead with those plans. So far now, this is what I've got:

NHL Senior Executive Vice President of Hockey Operations Colin Campbell and NHL Senior Vice President of Hockey Operations Mike Murphy (Yes, they are different roles, apparently) will join Commissioner Bettman on his weekly hour-long talk show; NHL Hour (nhl.com).

The show encourages fans to submit questions via phone and e-mail. To submit questions to NHL Hour call 1-877-645-6696 or e-mail nhlhour@nhl.com.

Commissioner Gary Bettman will return next week to host with Bill Clement live from the NHL Powered By Reebok store in New York City.

So if you're lucky enough to have Sirius, tune into Channel 204 or 208 at 4 PM for some hockey talk. I'm sure they'll cover some business along with the hot-button issue, fighting. I'll look for the podcast later.

Other than that, I have nothing. So I decided to update you on some small stats from the spreadsheet I use to track attendance (updated recently, in the top right corner of the homepage here). First, the number of sellouts, followed by which team:

• 26 Sellouts: Calgary
• 24: Vancouver, NYR, Minnesota
• 23: Chicago, Montreal, San Jose
• 22: Pittsburgh
• 20: Edmonton
• 17: St. Louis
• 13: Boston, Buffalo
• 12: Philadelphia, Detroit
• 11: Washington
• 10: Ottawa, Anaheim
• 8: Los Angeles, Dallas
• 6: Colorado
• 4: NYI
• 3: Nashville, New Jersey
  
• 2: Carolina, Tampa Bay
• 1: Atlanta, Columbus, Florida
  
• 0: Phoenix

Riveting. A couple more fun facts:

Largest Crowd: 22,712 in Chicago. Friday, December 26th, against the Flyers. Hawks win 5-1.

Smallest Crowd: 10,183 in Uniondale for the Islanders. Thursday, October 23rd, against the Stars. Dallas wins 5-3.

That's all for now, check back later, but I'm not promising anything.

Minnesota and Revenue Sharing

Messing around with the Attendance tracker at ESPN today, I sorted the "Road" attendance by average. The team in dead last didn't shock me, but it did get me thinking.

The Minnesota Wild are in last place in visiting team attendance, as the chart shows. What does this mean? Well, nothing really. The list is a rough correlation of which teams are most popular in the NHL, because casual fans might circle the date when the top teams on that list come to town for their team. But other than that, what could it be?

To be honest, I racked my brain all day. All I could come up with is the fact of how the Wild play their game, which is their infamous trap style. Still. a quick look at the standings shows that the Wild are not last in Goals For, in fact they would rank around 25th if I drew up a chart. As for Goals Against, they are tied for the second lowest, but I don't think this affects the fans decision.

They do have the 2nd lowest shots on goal, per 60 minutes. Any way I put it, they are a trap team. What got me thinking about this was that I wonder if their reputation really matters to fans when they see the Wild are coming into town. And if so, how much does it matter? Does it mean the difference between going to a game and not? Does it mean the difference between not watching a game? I'm going to keep an eye on this and see if I can think up of any ways to look into it.

Some plans for the future...

A comment last week from the Nashville Predators Playing Below Capacity article suggested that I look into NHL Revenue sharing, as Nashville should figure into that mold. Well after a couple days of poking around and actually reading the CBA, I have something.

I do plan on taking a deep look into NHL Revenue Sharing, and I hope to be able to forecast it in the months to come. But the following are just some raw facts that we all need to know going forward, as they are key in understanding on how I will compute the numbers for Revenue Sharing:

• NHL Salary Cap (2008-2009): $56.7 Million
• NHL Salary Floor (minimum): $40.7 M
• Salary Midpoint - $48.7 M
• Minimum Team Player Compensation: $29.9 M
• Targeted Team Player Payroll: $48.7 M
• Pro Rata Benefits Portion: ???

Understanding the Salary Cap and Floor aren't too difficult. The Salary midpoint is just the difference in the cap and floor ($16 M) divided by two which is added to the floor. This represents what each team should target for a payroll in order to maximize revenue. The Toronto Maple Leafs are the closest to this figure this season, at $48.6 Million, and only 8 teams including the Leafs are below this figure.

The Minimum Team Player Compensation represents what each team should have available at the start of the season to spend on players in regards to league revenue. It is calculated by dividing 20 Million by 1.74 Billion, and the multiplying that figure by the leagues revenue (which at the end of last season was 2.606 Billion). As you can tell, the floor is nearly 10 Million higher than this, but this gives the league a sense of the bare minimum of at which it can operate.

Finally, the Pro Rata Benefits portion. The Pro Rata is a small figure but it nonetheless figures into the final available funds for revenue sharing. It takes the total benefits paid by the NHL during its season and divides it by the number of clubs in the league (30) in order to determine the amount. I'm a bit confused on this, as the benefits cover a broad range of topics. If anyone has any information on how much the NHL spends in this area, please let me know.

That's all I feel like explaining at the moment, as the Rangers take on the Penguins. Tomorrow I will explain how clubs can qualify for revenue sharing to the best of my abilities. Please feel free to comment if you think I mis-spoke on anything or have something to add.

Updated Escrow Projections

As I mentioned last night, I said I would take the format that Daniel Tolensky provided Saturday in his article over at HockeyBuzz and update it in light of new updates of the Escrow percentage and revenue growth via TheFan 590 and Paul Kelley, the Executive Director of the NHLPA.

As a quick reminder, Kelley said yesterday on TheFan 590 in Toronto that the NHL expects revenue growth at the end of this season, ranging from 1 to 2 %; but more and more its looking like 1%. Along with this, Kelley stated that the second half escrow percentage, which is the amount of player salaries that are held back from them in order to cover any shortfalls of the league and its clubs, will rise to 22.5% from the first half percentage of 13.5. Kelley then confirmed that this would give an average of 18% for the season, which is the number I used in my projections.

As I stated last night, the players will lose money this season due to escrow, it just depends on the bottom-line revenues at the end of the year which will determine how much. So, non-playoff team players, root for 7-game series all around. Without further adieu, here's what I came up with (click to enlarge if necessary):


A couple of quirks I ran into while running these numbers:

- In his +2 Revenue Scenario, Tolensky had an overpayment/shortfall % of 12.9 %. But when I ran his numbers again, I figured it to be 11.43%. Triple-checked and I'm not sure how he came to his number.
- In that same scenario (basis for this report), he has the interest at Escrow at 0.10%. Of a million, this would equal $100,000. Since I doubt the league would be paying 100K per player in interest, I changed this to .01%, or 1%, which equals 10,000. I'm not sure where Tolensky got his figure, but for now, this works.

What to take away from all of this. Focus on the Shortfall dollar and percentage figure. This is the amount of money the players are going to have to foot to bring the leagues clubs out of the red ink. If the league grows by 1%, this figure should be between 205 and 215 million, depending on how the revenue shakes out. This means that players will be handing over anywhere from 10 to 13% of their salaries. For the player making the league minimum of $450K, this means that close to $59,000 will be taken from them. Granted, I think they'll be alright with their bills, but that is still a significant amount.

Please comment if you think anything is wrong, or would like me to explain anything.

More later.

Late-Night Escrow Fun

Catching up on my reading, James Mirtle once again provides a great piece of news. NHLPA Executive Director Paul Kelly said on TheFan 590 in Toronto that the Escrow percentage would rise to 22.5% this half of the season, from 13.5%. Many rumors have been swirling about this, with the most notable figures starting at 19.25% and then ranging to 25%.

This means that at the end of the season, 18% (adding the first half escrow of 13.5 to the now 22.5, and dividing by two) of players salaries this year will be held back in Escrow. Although this seems like a great amount (18,000 out of a million dollar salary), the players will most likely lose money this season on their contracts due to rapid contract inflation the past two seasons.

A great article over at HockeyBuzz by Daniel Tolensky takes the revenue projections of the NHL (2% growth, according to Bettman at the All-Star Game), and uses them to calculate the Escrow returns for three scenarios this season, along with how it has looked the last three seasons. His article was posted on Saturday, so he used the rumored figure of 19.25% for escrow.

I think I'm going to try and update and make my own projection chart once I get a few things clarified by some people on this issue. But at any rate, it looks like the players will not be receiving their full salaries this year because of some crazy salaries. As a Ranger fan, I feel bad for others that will lose money when Wade Redden will be making home improvements this summer due to his deal.

Check back tomorrow for more fun, as always.

Playoff Teams With Opposite Attendance

After a loss in intramural volleyball last night, I was checking out the standings going into the second half, and one thing caught me.

In the East, four teams will be fighting for the bottom two spots. The Sabres, Hurricanes, Panthers, and Penguins. In terms of attendance, the Sabres and Penguins do just fine. However, the Hurricanes and Panthers have not played in front of playoff like crowds much yet this year.

Carolina is 23rd in attendance ranked by average, averaging 15,357 a night, which is about 82% capacity at the RBC Center. They only have two sellouts this season, the first two games of the year. The attendance then plunged, going over 15,000 only twice in a span of 13 games. That dip ended with the 17th home game of the season, two days after Christmas when the Bruins visited Raleigh. Including the Bruins game, the attendance has only dipped below 16,000 twice; and the Canes even broke 18,000 for the first time since their second home game when the Leafs visited right before the All-Star Break.

So will the Canes attendance keep climbing as the team fights for their playoff spot since their Cup run in 05-06? I think so. There is a little tradition in Raleigh already with the Cup run, so the "Redneck Hockey" fans might come out of the woodwork again. Only time will tell and I will be watching.

Meanwhile, in sunny Florida, the BankAtlantic Center could definitely use some Panthers Playoff Fever. The Panthers haven't made the playoffs since 1999-2000 and have been, as usual, struggling at the gate. They are 25th in attendance ranked by average, with just under 15,000 a night (remember, its called "paid" attendance). This puts them with the next-to-last capacity rating of 77.8%. Yikes. They have only "sold out" one game this season, when the Canadiens visited at the end of December.

So will the Panthers attendance see a rise due to some playoff fever? Maybe, but I doubt it. The team has too many fair-weather fans. If they make it into playoffs, it wouldn't shock me to see some sellouts, but even that might be a stretch. We will see though.

Onto the West, where it will be a complete crap shoot; something that will be really fun to watch as the season dwindles. Virtually everyone is still in it, as the last place Blues (42 points) trail the 5th place Coyotes by only 11 points, and the 8th place Ducks by 9 points. Although the Blues would have to play very well, it is definitely not impossible. But, to be realistic, I think the Kings, Preds, and Blues may be out of it with the strength of the West. So I think the Coyotes and Blue Jackets can really benefit from a little playoff fever.

Without going crazy on the Coyotes (take a look at my Playing Below Capacity series, Phoenix edition, for more info), they are obviously in a mess off the ice. Everyone loves a winner though, and I really think they could benefit from the hockey fans in the desert getting a taste of the playoffs.

I think the same goes for Columbus, as they have had a solid year on the TV front, as Puck The Media showed. They have not had such as luck at the gate, but have slowly been rising in the past games of the first half. They have only sold out one game, a 3-0 win two days after Christmas (a Saturday) when a solid Flyers club rolled into town. With a hot rookie goalie and with the team only two points out of a playoff spot, the Blue Jackets could be the newest and hottest mid-market team. I think a playoff run, their first of the Jackets existence, would create some die-hard fans and would help the bottom line immensely in Columbus.

Moving on...

Sports Media Watch had a cool post last night, comparing the TV Ratings of NBA and NHL teams in the same markets. Not surprisingly, most of the NBA teams are out-drawing the NHL on the tube, but some are close than you would think. Its worth a quick look.

That's all for now.

Playing Below Capacity: Phoenix Coyotes

Welcome to the fourth edition of my little series here at Puck Money called Playing Below Capacity. Playing Below Capacity is where I take a look at teams that are playing in front of crowds of less than 85% at home (as of December) to see what they are doing right and wrong to try to get people in the seats. The first edition was the Devils, followed by the Kings, and most recently topped by the Predators (featured on Yahoo's Puck Daddy!). Today, its off to the desert of Glendale, Arizona; where the Coyotes are obviously in a boatload of financial concerns as of late. I will do my best to steer clear of those and focus on the attendance issues at hand. Phoenix is 25th in attendance ranked by capacity, with a rating of 84.6% through 24 home games. Let's begin.*

*Warning: Please remember that I'm a young college kid who thinks he knows what he's talking about. Any "problems" that I suggest the Coyotes have are my opinion and are most likely not that accurate. Also, any information I used can easily be found on the Internet as I am a typical lazy college kid. With that said, enjoy.

Here are the ideas I came up with that could be problems with getting people to go to Coyotes game on a regular basis...

• Arena Location/Age
• High Ticket Prices/Poor Promotional Events
• Metro Population
• On Ice Product
• Location/History of Franchise
• Other
  

Before we get going, some facts of the Phoenix Coyotes (wikipedia):

• The "Coytoes" moved to Phoenix in 1996 after being known as the Winnipeg Jets since 1972. The Jets were apart of the WHA from '72-'79 and then merged into the NHL.
• The Coyotes have made the playoffs five times in their 11 seasons in the desert. All five playoff appearances came in their first six seasons, their last in 2001-2002.
• They originally played a the US Airways Center in Phoenix for seven years until 2003. The team then moved to Glendale to the new Jobing.com Arena.
• The Capacity for Ice Hockey at Jobing.com Arena is 17,799.

And so we move on...

- Arena Location/Age

With Jobing.com being only six years old this season, I'm sure the quality of the arena isn't keeping fans away in the desert. What has been debated though is the location of the Arena, in neighboring Glendale, about 20-30 minutes away from Phoenix. Here is a screenshot via Google Maps (click to enlarge):


Jobing.com Arena is noted by the arrow labeled "B" in the picture. I asked Google for directions from Phoenix to the Arena and the blue line is what popped up, a 23 minute ride by car.

The Arena is on the outskirts of town, but Phoenix is surrounded by residential areas full of possible 'Yotes fans. Take another look at the picture. Downtown Phoenix isn't anything to imposing. Phoenix is basically set up like a giant retirement community. The roads are straight and the blocks are perfectly square, and like I said, residential areas all around. One thing I think that could make a difference is not playing in downtown Phoenix at the US Airways Arena, where the Suns of the NBA play and have always had better attendance.

To an outsider, it may seem like an issue. Some Coyotes fans in the link I provided above about the Coyotes home being debated about seem to think its really a non-issue. Take a look at this picture now (click to enlarge):


Many fans point out that the Jobing.com Arena sits right next door to the University of Phoenix Stadium; where the Cardinals have sold out every game and many college basketball games do well. This is a fair argument, but I still think that if the Coyotes were playing in downtown Phoenix, they might get a slight attendance boost.

I also wanted to mention the parking aspect at Jobing.com Arena. According to thesportsroadtrip.com, parking at the Arena is free, the only team in the major four to do so. There have been rumors that the Coyotes might start charging for the space, but none that I can link to.

- High Ticket Prices/Poor Promotional Events

The Coyotes made famous the "All you can eat" tickets, in an effort to draw a nice crowd on New Years Eve, 2008. It worked, somewhat. They saw their second highest crowd since opening night, with 16,199 packing into Jobing.com Arena to watch some hockey and eat their hearts out. As for ticket prices, the Coyotes don't (and really can't afford to) kill you. In 2008-2009, the Coyotes rank 28th in the Fan Cost Index at Teammarketing.com. The Fan Costs Index:

comprises the prices of four (4) average-price tickets, two (2) small draft beers, four (4) small soft drinks, four (4) regular-size hot dogs, parking for one (1) car, two (2) game programs and two (2) least-expensive, adult-size adjustable caps.

This years FCI for Phoenix is only one of four teams to decrease from last season. Their FCI is at $221.80, which is about $65 below the NHL Average. Their average ticket comes in at $37.45, about $12 below the NHL Average. Finally, which was a shock to me, their average premium ticket price is $129.23, about $15 above the NHL Average. Along with the low ticket prices, the Coyotes do some nice giveaways (mostly in the first half of the season), plus some great discounted prices (Only $20 for a lower-level ticket for students and military, wow).

Do I really think the ticket prices and offers are keeping fans away? No. The fact of the matter is, anyone that really wants to go to a sports event, especially hockey fans, will find the money to do so. But hey, at least the Coyotes haven't been accused of buying their own tickets like the Predators, yet.

- Metro Population

The cities of Glendale and Phoenix combine to have a population around 1.7 million people, with almost 50% of the population in Phoenix being non-Hispanic white, the NHLs main demographic. Glendale is ranked 28th by Statshockey.net in city population size in the NHL, but the Phoenix Metro Area comes in with just over 4 million people.

4 Million ranks Phoenix about average in the NHL in terms of Metro population. And as I showed you with the demographics clip, there is plenty of possible hockey fans. So the people are there, that's fore sure.

- On Ice Product

Everyone loves a winner. Take a look at this chart and graph below (click to enlarge):


As you can see, the real Attendance boost came in '03-'04, when the team had post two consecutive solid seasons and got their reputations up. Now that the Coyotes have an achieving young core poised to make the playoffs for the first time since 2002, the 'Yotes may really help their bottom line come this spring.

I think the On-Ice product is an issue. It is not THE issue for the Coyotes, but it definitely doesn't hurt to have a winner in what I like to call a "Bettman" market. I'll touch on that more later. If the Coyotes stick around in Phoenix, the crowds will be dazzled by Turris, Mueller, and Tikhonov for years to come. Throw in some solid goaltending by Ilya Bryzgalov and some pest-work by Daniel Carcillo and you being to see why the Coyotes are currently sitting in 5th place.

The Coyotes need to finish this season off strong on the ice to take some pressure surrounding the team and its ownership off the ice.

- Location/History of Franchise

It's the (favorite fun word here) desert. The Coyotes are in Phoenix because back in the late 90's player salaries got out of control and the small but constantly sold-out MTS Centre in Winnipeg couldn't support the Jets. Now, the fifth largest city in the United States, with a perfectly good arena and hockey club (this season at least), cannot support the Coyotes. Hockey is really only prevalent in Arizona because of the Coyotes and because of any retired folk there. I'm sure the Coyotes have grown the game a bit, but from my experience with USA Hockey (reading the monthly magazines, playing), you don't hear a lot about quality youth hockey being played in Arizona. What I will give the state is that they have the same amount of rinks of Tennessee and Georgia, combined (click to enlarge):


Off-note: 920 rinks in Ontario. Enough said.

- Other

I added this Other section because I have to share these photos when were talking about Attendance issues and the Coyotes. Plus I wanted to touch upon their meaning:


I took a look at who I think is "telling the truth" when it comes to reporting attendances back in December. The Coyotes fell into my "liars" list, naturally. Above is the Coyotes November 1st tilt against the Minnesota Wild. The reported attendance was 14,817. Now I have mentioned before on this site that it is really the clubs decision whether to announce the true attendance or the paid attendance. Some clubs, like the Coyotes, have to announce the paid; otherwise the team would be halfway to Ontario to play in one of its 920 rinks.

The above is truly a sad sight, but it is the results of a Bettman market. Phoenix is a great big US city with lots of televisions. This, contrary to Commissioner Bettmans hopes, doesn't necessarily equal a successful hockey market. Buffalo and Minnesota are successful hockey markets because the game is loved and put above all else there, and teams should always be in those markets because of this.

The Coyotes will obviously be receiving nice checks in the form of revenue sharing this season, no doubt about it. But when a team in the 5th largest city of the US is dead last in overall team value and has lost more money than one would care to know, along with being the only team in the league to actually lose value last season, why does Bettman insist on keeping this franchise in the desert? I know a lot of this is easier said than done, but how he can keep ignoring the fact that some of his Southern Expansion markets are just not going to work in the long run is beyond me (Atlanta and Florida are also to me not going to work).

- Conclusion

Attendance in Glendale and Phoenix has not been great since the turn of the century. But to be fair, neither really have the teams been either. To me, beyond the fact that the On-Ice product hasn't been great (with this season and '01-'02 being the exceptions) and the team moved 30 minutes outside of Phoenix, the bigger problem is clearly the market. And this isn't news, but more or less just a conformation. All the money news swirling around the club off the ice has surprisingly not affected the locker-room, which is promising. If the Coyotes continue down this path and cannot find a new owner, Mr. Bettman may have to concede to the very thing he seems to hate, relocation.

One last thing. Bettman seems to be content on selling the Coyotes to anyone who is willing to put up the cash (unless your name rhymes starts with a B and ends in alsillie). I'm sure fellow NHL Owners cannot pleased about this, as this may not be the best business strategy.

So that about wraps up the fourth edition of my series here at Puck Money, Playing Below Capacity. Be sure to check back next week as we should have another fun, relocation rant filled edition as the New York Islanders are next up on the list. Please feel free to comment and let me know if I made any mistakes.

More to come later, by the way.

Morning Roundup

I managed to find the Versus ratings for the All-Star game this morning...

USA Today reports the overnight coming in at 0.8 (616,000 households), a 12% increase from last season. Nothing to brag about, as the X-Games outdrew the game by .2, but it still hung around with a regular-season match.

moving on...

Ken Campbell of The Hockey News says that the "free lunch is over" for NBC in regards to the NHL TV rights deal.

I'm late on this, but Campbell says FOX is apparently interested in bringing back the NHL. (Insert goofy fighting robot joke here). Campbell explains how I feel about a new TV-rights deal well here in this paragraph:

A new deal likely wouldn’t be a financial bonanza for the league, but it would provide some revenues and, more importantly, place some tangible value on the television product. Even though all facets of the business are bound to be hurt by the economic downturn, the NHL sees its television presence as an area of potential growth, particularly with the upcoming 2010 Olympics in Vancouver.

This was a setup that lead to more interesting news, though:

Speaking of outdoor games, look for next year’s to be played between the Montreal Canadiens and Boston Bruins at the 69,000-seat Gillette Stadium in Foxborough, Mass. The league has come to the conclusion that the outdoor games work much better in a football stadium than a baseball venue and a Montreal-Boston game would be great for ratings on both sides of the border.

I completely agree. There was nothing wrong at Wrigley, but to me playing in a football stadium year in and year out is just a no-brainer. More fans for a bigger gate receipt and the venue is already basically setup.

Check back later.

Clarification and another CBC-Bettman Interview

Just a clarification on my All-Star "Idea" from yesterday (see below).

I understand the All-Star Weekend format will most likely not be changed (especially anytime soon, with the show Montreal put on and the game itself last night). It is a cash-cow for the city that hosts it and it is very important for fanfare. The weekend alone brought in at least 10 Million for the NHL in sponsorship money, too.

Either way, it was a great game and a solid weekend. I'll be looking for the TV Rating it drew on Versus ASAP, as nothing was in today's Sports Business Daily.

Before the game last night CBC's Ron MacLean spoke with Gary Bettman for about nine minutes. Here it is:


Highlights from the Business standpoint:

- Economic "growth" of 5-6% for this year.
- Bettman confirmed high Escrow possibilities
- A top revenue-sharing team could be getting 17 Million Dollars this season. Wow.
- Bettman: "I believe that Relocation is only a matter of last resort..."
- Bettman stated that Balsillie "bailed out" on the two franchises he pursued.

A great interview. No real shocking news, but some clarifications from the head poncho.

A quick edit: I forgot to mention a quick Attendance stat.

There were 31 sellouts last week, the most since I started tracking sellouts in late December. The reason I say this?

Well there were only games from Sunday through Thursday because of the break. Quite a successful mini week. Total Sellouts for the season number at 361 now.

Something more later.

Great Gary Speaks and My Opinion on the All-Star Weekend

Gary Bettman clarified some situations Saturday night about Phoenix, Nashville, Expansion in Southern Ontario, and the NHL in General.

On the Coyotes, Bettman said there are no plans to relocate them, or any team for that matter. He also said that "...there are some cash-flow issues." I'd say that's a safe statement.

Bettman said the following about the reports of Nashville buying their own tickets to qualify for revenue-sharing:

"They did not do it last year and they have not done it this year. We monitor very closely how clubs report [revenues],'' he said. "We are not going to encourage anyone to play games with the rules, in particular how it relates to revenue sharing."

As for Southern Ontario, he said that putting a team in such a market is "...not that simple." For once, I do agree with Mr. Bettman. Everyone looking from the outside in doesn't understand that relocating a franchise is so much easier said than done. Hell I don't even really know what it completely takes. Mr. Bettman did insinuate though that Hamilton would need a new arena if it became a possibility.

And Finally, Bettman predicts growth of around One percent. Some see this as a bad thing, but I don't really understand how, as a hockey and NHL fan, one cannot be grateful that the economic downturn hasn't struck down on the "smallest" of the big four.

Either way, some interesting comments over a slow All-Star break. Speaking of which...

I came up with this "idea" over the Summer 0f 2008 after the first Winter Classic. As a kid, I always liked watching the Skills Competition over the All-Star game. I watched the Skills last night and I will try to catch the game tonight. Either way, this weekend is important for fanfare and especially important for the kids, who are the future support of the league. So, here's my idea.

Scrap the actual game all-together. You move the new "Winter Classic Break" to start on Christmas day, going until New Years Day, when the league resumes play. You do the "Winter Classic Skills Competition" at the site of the Outdoor Classic either on the afternoon of New Years Eve or the night of December 30th.

Every major sport has a debate over whether to have an All-Star game or not every season, and with the success of the Winter Classic, you could use the outdoor game to highlight the league and what it stands for.

Maybe I'm just talking crazy, but I don't see how it couldn't work. I understand the All-Star weekend is also a lot about the money it brings in to the city that hosts, so once again it is easier said, than done.

Check back tomorrow and then Tuesday for another edition of Playing Below Capacity.

Feeling Much Better

Sorry for my absence the past couple of days; I came down hard with a touch of the Flu. I feel a lot better as of this morning, so lets catch up.

- A thanks to Greg Wyshynski for featuring my look at the Nashville Predators attendance issues in his Tuesday morning Puck Headlines at Puck Daddy.

- Thusday the NHLPA Executive Board voted 30-0 to not re-open the current CBA between them and the league.

- Friday Sports Media Watch reported via Sports Business Daily that the Rangers and Penguins drew a 1.0/2 final rating; the highest for a regular-season game with NBC.

- Sportsnet.ca reported on Friday that the NHLPA will recommend to its members that escrow payments be almost doubled to 25% from the now 13%.

- Finally, here is a chart I made with basic information of NHL Arenas. There isn't one quite like it. I had an idea to go along with it, but to be honest I forgot it when I became sick. I'll use it for something, eventually. It is sorted by the year the arena opened (click to enlarge):



Thats all for now, Enjoy the All-Star weekend.

Tough Night, Not Feeling Well...

I had a tough night last night with some family issues and on top of that I woke up this morning not feeling too hot.

I am working on a couple of simple lists that I find interesting, and one thing that caught my eye this afternoon...

In today's Sports Business Daily, a title read:

NHLPA's Kelly Supports Exploring European Expansion For NHL

Kevin McGran of the Toronto Start quoted Kelly saying the following:

But he said the NHL has to "really test this market and determine whether or not it would be viable to put a couple of NHL franchises over there." Kelly: "You need to continue to look short term and long term. We have to look for growth opportunities in the coming years, which means bigger markets, better television deals. We have a natural market in most of Europe."

The IIHF's response?

The IIHF said that the NHL "would fail miserably, citing the fact that the NFL pulled the plug on its money-losing European league and saying the NHL would be seen as an interloper." IIHF President Rene Fasel: "It would be a potential disaster for this NHL's European division. I don't think anyone right now has the means to lose so much money"

Exactly how I feel.

Hopefully, something tomorrow.

Playing Below Capacity: Nashville Predators

Welcome to the third edition of Playing Below Capacity, a series here at Puck Money where I am looking at the teams that are playing (or were playing, when I decided to do this back in December) to see why certain teams aren't filling over 85% of their arenas. The first edition was the New Jersey Devils, followed by the Los Angeles Kings. Today, we make our way to Tennessee to visit the Nashville Predators. The Predators are 24th in Attendance ranked by Capacity, and they sit right at the magic number as of today of 85%. With that said, lets take a look at the Preds.*

*Warning: Please remember that I'm a young college kid who thinks he knows what he's talking about. Any "problems" that I suggest the Predators have are my opinion and are most likely not that accurate. Also, any information I used can easily be found on the Internet as I am a typical lazy college kid. With that said, enjoy.

Here are the ideas I came up with that could be problems with getting people to go to Preds game on a regular basis...

• Arena Location/Age
• High Ticket Prices/Poor Promotional Events
• City Population
• Financial Issues in Nashville, Tennessee (location of Arena)
• On Ice Product
• Location/History of Franchise

So before we dive in, lets take a look at some raw facts (yes, pun intended) of the Nashville Predators (All information taken from their wikipedia page, found here):

• The Predators were founded in 1998 when Craig Leipold was awarded an expansion franchise in Nashville by the NHL
• The Predators have made the playoffs four times in their 9 completed seasons. They have never gotten past the Conference Quarterfinals (first round). Their best finish in the league was third in 2006-2007.
• They have played all 9 seasons in what is currently known as the Sommet Center; which was formerly known as the Gaylord Entertainment Center and Nashville Arena. The Sommet Center opening in 1996.
• The capacity for Ice Hockey at the Sommet Center is said to be 17,113.

So, let the fun begin...

- Arena Location/Age

The Sommet Center is only 13 years old, and recently went through renovations in the summer of 2007. In these renovations, a new scoreboard was installed, along with changes to Concession and Public areas. The number of seats remained the same. Roughly looking at the ages of present arenas in the NHL, I would venture that the Sommet Center is around average age if not a bit older (I will look into getting a list together, I should know that stuff). As for location, the Sommet Center is in the heart of Nashville, as you can see here (Arena noted by the "A" arrow):


With a few major roadways leading to Nashville, and the Nashville International Airport to the South and East, I'd say the Sommet Center's location isn't a big issue.

- High Ticket Prices/Poor Promotional Events

As always, we will refer to Teammarketing.com, for our information. They rank the four major sports with ticket prices with their Fan Cost Index, which at a single game;

comprises the prices of four (4) average-price tickets, two (2) small draft beers, four (4) small soft drinks, four (4) regular-size hot dogs, parking for one (1) car, two (2) game programs and two (2) least-expensive, adult-size adjustable caps.

This season, the Predators are ranked 20th in the NHL with an FCI of $273.38, which is up 3.9% from last season but is till around 15 dollars below the NHL average. The average ticket price is $47.22, which is also up 2.8%, but still about $2 below the NHL average. The average premium ticket price is also about $5 below the NHL average at $107.91. Being below the average is good, and in the past couple of seasons, the Predators have done just that. But, ticket prices in Nashville have also been rising at a steady rate since at least 2005-2006; with the average ticket going up around $15 and the average premium ticket going up around $30. Is this outrageous? No, and considering inflation rates and the current economy, its not necessarily a big surprise either.

I couldn't find any Promotional Information on the Preds website at first, but after a google search I found the Predators Promotion page under the Fan Zone. I must say, I am impressed with their offerings. They tend to have something for every game, and they really mix it up. Offerings involving kids, the military, food, charity drives, pre-game parties, and college nights really hit home with a lot of different demographics. My favorite (real surprise here), would be the College night, where for $20 you get a shitty ticket and half-price on beer! Good stuff here, and I don't think its a major problem.

- City Population

Although Nashville has somewhat of a below-average metro population with a shade under 1.5 million, the city itself has almost 608,000; which ranks it right down the middle at 15th in the NHL. I think they could benefit a lot more from a larger metro population, but having the 15th largest city market definitely comes in hand at times. I wouldn't say the City Population is the big problem in Nashville for Attendance.

- Financial Issues of Nashville

As of 2000, the city of Nashville was 67% white, which (to be honest) are the overwhelming majority of Ice Hockey fans. The median age is 34, with 67% of the population under the age of 45, which is good for a 18-45 target demographic of NHL fans. The median income was just a shade under $50,000, which leads me to believe the average household income should be in the ballpark of the $88,000 average household income for NHL fans (Forbes). In general, I think people in and from around Nashville could afford a Predators game most of the time, but again I don't think this is the main issue (all above from wikipedia).

- On Ice Product

As I mentioned before, in 9 seasons the Preds have made the NHL postseason four times, all three ending as quickly as it began; in the first round. As an expansion franchise, this may be considered a small success, but from a business standpoint, it does not help the matter of the bottom line. 18 of the 25 players on the Nashville roster are under the age of 30, which is obviously good for the future. Three key players for the future are Defensemen Ryan Suter (23) and Shea Weber (24, Assistant Captain), along with Goaltender Dan Ellis (28), who had a stellar 2007-2008 season. As the saying goes, everyone loves a winner, and I think its no exception here. In an indifferent expansion hockey market, the best way to create and retain fans would be to win some hardware. Easier said than done, I know, but at the same time I wonder if this is really the case. Take a look at the graph below (click to enlarge):


Even when hype was the highest, coming off a solid post-lockout season in 2005-2006 with a 6th place finish, and an even stronger season in 2006-2007, the Predators couldn't even break the top 20. Now, I understand that the Sommet Center can only fit 17,113, and those ranks are by Average Attendance, not Capacity. But still, if a legitimate winning hockey team can't attract customers, what is the problem?

- Location/History of Franchise

The state of Tennessee doesn't exactly have the best history of Ice Hockey. According to Arenamaps.com, there are only 10 Ice Hockey Arenas in Tennessee. I'm sure the game is prevalent in small pockets, but as of right now I have no way of identifying that. The Predators have most likely grown the game, but I would venture a guess that it hasn't grown by much. Their Franchise History isn't exactly historic, as 2008-2009 is only the 10th season, and many rumours have already swirled around the club focusing on relocation. The Summer of 2007 provided much drama for the club, as Craig Leipold looked to sell the club. A deal was in place with Jim Balsillie, but fell through when Balsillie went too far with his relocation plans (pre-selling season tickets in Hamilton, Ontario). A group of local business owners who called themselves "Our Team Nashville" rallied to buy the team to keep it in town. Throughout this whole debacle, the team did manage to re-negotiate their lease with the city of Nashville. The changes are as follows (wikipedia):

If by the end of the 2009/10 season, the team loses at least $20 million or more in cash flow and does not average 14,000 per game in average attendance, the team can break it's lease with the city of Nashville by paying a $20 million breaking fee.

- Conclusion:

The Predators have a value of $164 million, which ranks them 23rd on Forbes' list this year. Their revenue is at $70 million, but with an operating income of $-1.3 million and a debt/value ration of 50%. Are the Predators in good shape? Not so much. Are the Preds in the worst shape in all the league? No. Frankly, I never thought Nashville was much of a hockey market. I see it more as an American sports market. One with a big enough population and TV market to support professional sports teams. Can they support the Predators? For now, but I don't know if it can last. The only other professional team in the big four are the Titans of the NFL; which means the Predators don't have to directly compete with an NBA or MLB team, which helps them. I can easily see the team moving in the next decade, to where I am not sure. The problem with the Predators is that you can't pinpoint one problem, which usually leads back to the hometown market. The On-Ice product isn't the greatest, but if no one will go even when they are winning, what does that say about the market.

If I was in Nashville, I would continue to keep the ticket prices as low as possible, along with doing as much promotional work as possible. Getting the On-Ice issues sorted out would be great as well, but that is always easier said than done.

So that's the third edition of my series called Playing Below Capacity here at my little blog. Check back next week around the same time, as I plan on looking at the Phoenix Coyotes, which should be a really fun one.

Maybe more later today...

Fun with Maps

Being bored, I took to the Internet doing some minor research on some possible relocation/expansion cities for the NHL. It first started as an NHL/NBA comparison along with other sports, but then it led me to some interesting sites with sweeeet maps.

The first site that got me thinking was the CommonCensus Sports Map Project. The first question is "Where do the fans for your sports team live?" I'm hooked.

Using their sister project, the CommonCensus Map Project, people are allowed to "record" themselves via their hometown. They then answer some questions based on how they feel they relate to the area they live in. Then, at the end of the questionnaire, you have the option to pick your favorite sports teams from the NHL, NBA, NFL, MLB, and Division 1 NCAA Football. You can pick your favorite, and then optionally pick your #2 or 3. I suggest you do it, and tell your friends, it kills time and it is slightly interesting.

The site says the maps are updated every couple of days, but the Maps itself says Updated as of June 30, 2008. Either way, its still cool. The NHL have the least number of "fans" (surprise surprise!) so far in this survey. Take a look:



As you can see, I clicked on the NHL map. And without further adieu (click to enlarge):



Plenty of Hockey fans (Vancouver) near Seattle, eh? Food for thought.

What does all of this mean? Nothing, at the moment. I will be using maps like these (and ones to come) over the summer when I look at teams and cities more in depth, so I'm glad I found them.

So, lets view some more maps...

First, a map with all the NHL teams (found here):

So exciting I almost fell over. I'm sure you felt the same. (ha).

And now we have a map of Pro, College, and Major Junior Hockey by County in the US (found here):



Gives a good idea of where hockey is watched the most, in my opinion.

And finally, a map I will definitely use again when it comes to analyzing teams and cities, we have this dandy which shows the number of Ice Hockey Rinks by State/Province throughout Canada and the US (found here):



The numbers that caught my eye were 87 in California, 51 in Dallas, and 39 in Missouri. Kansas City Islanders anyone?

So that's that. I realized as I was writing this I don't use many pictures, so I'll make more of an effort to do that. Check back tomorrow as I will have another edition of Playing Below Capacity.

Monday Afternoon Update

And I'm back. It was a long weekend and I apologize for no posts. Lets get moving though...

As I mentioned last Wednesday, E.J. Hradek reported that the NHL and NHLPA were working towards setting up another World Cup of Hockey, which I am all for.

Well Saturday Scott Burnside picked up more on that story, saying that the two sides have reached a handshake agreement on how the revenues will be divided up involving the World Cup, thus giving the 2011 event a green light. He also added that the NHL will be continuing to send teams to kick off the season over in Europe.

As you know I'm all for the WC of Hockey, I will now shed my opinion on sending teams to Europe. Burnside reports in that article that six teams will be sent to three European cities to kick off the 2009-2010 season, followed by eight teams to four cities the following season.

The Good? From a Business standpoint, it is great for the NHL and the individual clubs. The 2008 events in Prague and Stockholm this season were big hits and created an amazing atmosphere. Sellout crowds, international exposure, and increased media coverage are all benefits here.

The Bad? Well for the teams that travel, they lose one regular season home game, along with a preseason game or two. I would venture a guess that this upsets the hometown fans along with some sponsors, but at the same time it is very cool to be selected to represent the NHL abroad. From an on-ice standpoint, scheduling is a bit of a hassle. The 2007-2008 season kicked off with the Ducks and Kings in London at the O2 Arena, and later on in the season there was rumblings about how the Ducks were upset because they were fatigued and didn't get off to a good start in the season. I don't see that as much of an issue now, as the NHL staged the 2008 Premier earlier than the start of the regular season at home, allowing time for rest for the four teams that traveled (OTT, PIT, TB, and NYR).

Either way, I think both events are great for the league, and highlight the great sport that we all follow dearly.

More News...

Sports Business Journal once again provides a great piece on NHL Attendance and TV Ratings, which brings everyone up to speed for how the season is going. I missed this originally, but today's Puck Headlines over at Puck Daddy allowed me to catch this.

If you follow the blog, you know that in the past week I've looked at SBJ's updates on the Western Conference and the Eastern Conference about Attendance, so I won't go on repeating myself. But, SBJ did some great research into TV Ratings thus far, which are up nationally, and only down in seven markets locally. Here is the snapshot (click to enlarge):


The only real shocker to me in the change column (negatively) is Detroit. How do you win a Stanley Cup and then decline in TV Ratings? Weird.

One final thing, as I'm sort of pressed for time now...

Greg Wyshynski wrote the following in his Puck Headlines about the Sports Business Journal article describing the above:

But here's the problem: When Sports Business Journal writes that "five teams reported average attendance below 15,000 - the New York Islanders, Columbus Blue Jackets, Atlanta Thrashers, Nashville Predators and Phoenix Coyotes," we all know those numbers are remarkably generous because of the way the League counts "attendance" and because we're not blind. Stop crowing about records built on a foundation of discounts, giveaways and unused tickets.

Now don't get me wrong, I agree fully with him. I've already taken a look at who I think is lying about their attendance numbers and who is telling the truth, but lets step back for a second.

I firmly believe that the NHL is not the only league that differs their attendance from how many are present in the building and how many tickets were sold, but this isn't anything new. Therefore, I don't see this as a big deal. Why? Well, from the business point of view, if I had a job in the Marketing Department for the New York Islanders (well first I would hit myself being a Rangers fan), I wouldn't be worried about if the person that bought tickets attend the actual game, I'd be worried about getting the payment for those tickets. So, although it is slightly unethical for some teams to be doing such a thing, it is (to me) somewhat of an evil necessity for certain teams' market.

That is all I have for now, possibly more later, if not definitely tomorrow.

EDIT: a quick note...

Last Weeks Sellout Count: 25, which brings up the total this year to 330. Saturday night was a big night, with 9 out of 11 games selling out, most surprisingly the Islanders and Predators "selling" out.

Some News and Future Plans...

First, the news of today...

TSN's Darren Dreger reports that the New York Islanders will be playing an Exhibition game next September at Kansas City's Sprint Center, a beautiful 18,500 seat arena in the heart of KC, against the Los Angeles Kings.

What does this mean? Well, a little bit of nothing. Dreger rightly speculates that this is supposed to be somewhat of a scare tactic by the NHL to Charles Wang, who refuses to threaten to move the franchise in order to accelerate his Lighthouse Plan. The plan is to ultimately renovate the Nassau Veterans Memorial Coliseum, and to develop the 100 acres around it with plenty of consumer attractions.

Other than that, the Islanders are no where near moving. I'm sure this game will be close if not a complete sellout as the Kansas City area doesn't get to see much hockey. But only time will tell on that.

As promised from yesterday, the Western Conference Attendance update from Sports Business Daily.

The notable gainers are the Blackhawks, who are up 49%, and the Blues, who despite being in last place (as I took a look at previously here), are up 8.1%. The Red Wings are also up by 6.6%, who are joined by none other than the Phoenix Coyotes, who are acutally up 4.7% this season from last. The only teams to really decline are the Avalanche (down only 4%) and the Kings (only down 2.4%.

The verdict? Great stuff. I would venture a bet to say that, in general, the Eastern Conference typically outdraws the Western Conference, seeing as Hockey is just generally more popular in the northeast (I think I'm going to look into this somehow). Why is this great stuff though? Well as I showed yesterday, 12 out of 15 teams in the East are either breaking even or declining in attendance thus far. As for the West, only 8 out of 15 teams are breaking even or declining this season. And as a whole, the Western Conference is up 3.5% this season, averaging 17,387 this season as opposed to under 17K last season at this point. So props to the West.

Finally, just some house-keeping on what I plan to do while at school here, where I don't have as much time to post than as if I'm on break when I started this.

I plan on doing something original (Playing Below Capacity series, or something else) probably once a week. I will try to report news like this as much as possible, but I understand I'm not breaking the news, so its not as interesting. I am spending my class time trying to think of interesting things to write about, I can promise you that.

So thats all I have for now, have a good day. I wouldn't expect much until Sunday.

NHL Attendance up 1.5%; Other News As Well

I don't have anything personal planned for today, but plenty of stuff coming out of Sports Business Daily...

- NHL Attendance is up 1.5% this season thus far, averaging 17,306 fans per game. Notable gainers are the Washington Capitals (up 29.8% from this time last year) and the Boston Bruins (up 12.3%). Notable declines include the Buffalo Sabres (down 12.4%, still not struggling though) and the Tampa Bay Lightning (down 11.6% thus far). The Thrashers (-7.9%) and Senators (-4.3%) are also down this year by a worthy amount as well. The Article says the Western Conference update will come tomorrow, so I'll be looking for that.

My thoughts? Good and Bad. The chart provided with the article shows that 12 out of the 15 Eastern Conference teams are either down or breaking even on Attendance from last season. Also, as a whole, the Eastern Conference is down 0.5% from last season. Are these numbers so staggering to really start to worry? Not at all, especially considering the current economic conditions. In fact, I would consider it along the lines of dodging a major bullet. Buffalo being down a little shouldn't be a major shocker to anyone, as it is a middle-class smaller market, where the effects of the economy are most likely hitting home. But still, plenty of Sabres fans are getting out to HSBC Arena with their 99.2% Capacity rate thus far. On the flip side, the Capitals are taking advantage of a tough Washington sports scene at the moment, and are on the radar of many casual sports fans in the area, and they have earned it. Boston has earned it as well, as they are in a city of champions in the past five years, and some Bruins fans are coming out of the closet hoping the B's can join in on the fun.

- From the Monday (1/12) issue of The Daily, Liz Mullen reported that NHL Player Reps will vote later this month on the current CBA, and are expected to extend it another two seasons.

Not much else there than that, it will be a hotter topic as it gets closer, but for now lets hope no problems arise between now and then.

Finally, kind of a non-business post, but nonetheless important to me, as I love international competitions...

- E.J. Hradek reports in his blog today that the NHL and NHLPA are working toward setting up another World Cup of Hockey, hopefully around late August through September of 2011, with Feburary 2012 as a backup date. That date doesn't look good, though, due to the fact that the NHL season would have to be halted once again. Hradek also said "The parties would like to stage a World Cup every four years, making it a regular event on the long-term hockey calendar."

My take? To take from Chris Farley; GOOD! GREAT! GRAND! WONDERFUL! NO YELLING ON THE BUS! With the 2010 Olympics having a good shot at being the last involving NHL Players for a while, I'm all for this. Because, I mean from what I know, the Olympics will obviously never be moved to another date, and unless the IIHF steps in and begins talking to the NHL about the problem, shutting down the NHL every 4th year will not be happening again. The last World Cup was held in 2004, and was considered a good success for reviving the tradition. So I say lets make it happen.