What Makes Hockey “work” in A Given market? Will hockey “work” in Las Vegas? Part One of a Three Part Series

Hello hockey fans, welcome to the blog! We have received great feedback from our listeners and the twittersphere and one of the main topics is “will hockey “work” in Las Vegas” ? We think that is a great topic to explore more in-depth on a podcast, but for now, a few quick thoughts, or maybe not so quick.

If you have listened to our first episode, Thanks!!! In it, we had a great discussion with NHL Goaltender Clint Malarchuk about that very subject. Clint played Goalie in the most traditional of markets, Quebec City, and perhaps the least traditional market most hockey fans can imagine, Las Vegas. Which is one of the reasons we sought Clint for our first show. We felt his perspective on both markets would be unique. We were right. If you haven’t listened to the show, you can right here on Soundcloud Or here on iTunes Or you can follow us on Twitter

Among other things, one main theme came from him and he said it best. “I’m often asked if Vegas would work as a hockey market, and my answer is yes” Clint told us. He cited great fan support for a minor league team, which was over 7,500 and in the top ten in the league until the arena refused them a new lease. This was in 1993-97 at a time when Las Vegas had a population of barely 400,000 people. He said point-blank, “Vegas IS a hockey town”, Now the city has grown to over 2 million people in the area, most having moved here from cold weather, traditional hockey cities and the one thing they do miss from back home is their hockey, as Clint rightly pointed out. Some of us have been here since the 80’s, went to the first outdoor game in the modern era at Ceasers Palace between the Kings and the Rangers, went to as many Las Vegas Thunder games as we could, and know how the city feels about hockey first hand. Most of you don’t. People look for reasons the franchise here will fail, and cite the teams in Arizona and Florida as examples. People look for reasons the franchise will succeed and cite the 41 million tourists who visit Las Vegas each year, or the Casinos will prop up the team. We think the truth is somewhere in the middle. But the bottom line, as Mr. Malarchuk said, “Vegas WILL support a hockey team”. And there is no one who would know better than him.

So, what does make hockey “work” in a given market? Is it the weather? We here at the podcast hear that “Hockey in the desert is a stupid idea” all the time. Is it? Can NHL teams in warm weather climates succeed? How do you define success? One friend of the show from Quebec has said success is selling 90% of your tickets on average. We like to think that on ice results matter greatly, is that true? Do Cups equal success? How about a cities “passion” or “love” of the sport? Does that automatically mean buts in the seats and financial stability regardless of on ice performance and climate conditions? Does that even mean an NHL team will be financially viable in a hardcore traditional market? All very good questions that need to be asked and answered, so we will take a crack at them.

Number one and the easiest to answer is can hockey work in a warmer climate city and the answer is so obviously yes that to suggest otherwise is, quite frankly, laughable. Lets look at a few teams that have made things work in warmer cities, and then at some that have not. Maybe herein lies the answer to the larger question facing us.

We hear a lot of people using Florida as an example of why Las Vegas shouldn’t be given an NHL team. We agree that after the Panthers magical run with the rats raining down to the ice that things have gone south in a hurry, (no pun intended). However, these people conveniently  forget that just up the road is a team many consider to be thriving  in Florida, the Tampa Bay Lightning. Now by the 90% of seats sold barometer, we say the Bolts are a big success.  We will use post lockout numbers for the purposes of this discussion, mainly because looking at the last 10 years is relevant to the Las Vegas question. Over the last ten years, The Lightning have been 2nd,3rd.8th twice, 9th.10th 13th, 18th, and 21st twice. They have had a high average of 20,509 and a low average of 16,497. Six out of 10 years in the top ten in attendance. only twice in the bottom third. They have a Stanley Cup Championship from 2003-04. During that time they made the playoffs six times and did not qualify four times. This would seem to spell success, right? The team has lost money in 5 of those 10 seasons, according to Forbes, with a high of -11.9 million in 2010-11.

So in the Lightnings case. we would say marginally successful. The perception of  ticket sales equaling success seems to hold up somewhat, but on ice success in this market does not necessarily mean profitability.

Looking at another non-traditional market, Los Angeles may surprise you. Setting the three barometers of success as attendance, on ice performance, and profitability, how do the Kings stack up? Certainly there is a perception of an increased level of interest since the Kings won their first Championship in 2012, and then again in 2014. Is this entirely true? Was Staples Center an empty barn before 2012? Let’s find out.

Starting in 2002-2003, The Kings started a franchise record run of six straight seasons missing the playoffs. They would not see the postseason again until 2009-10. So, obviously, on ice performance was a negative factor. Or was it? During that time the Kings would start 12th in the league in attendance with 17,569, or 97 percent of capacity. They fell to a low of 22nd, drawing 16,488 per game in the 2008-09 campaign, or 89 percent of capacity. Still within a tick of the 90 percent sell rate we set as the bar for success. In between they finished 11th, 12th, 16th, 18th, only falling below the 90th percentile the one year. Pretty solid numbers for a team with no fans until three or four years later. And in a warm weather city far from the Canadian border.  Their operating revenue those years only dipped into the red once, 2010-11.  Now, since 2011, attendance has risen back to where it was in 2002-03 and above, which should be expected. This year, the Kings drew 100.2 percent of capacity at 18,265. Good for 15th in the league.  By the way the Kings won the Stanley Cup twice in three years from 2012 through 2014.

Summarizing the Kings last ten years, under the three guidelines we set forth above, we see a very successful franchise, even before their current on ice successes. Selling 90 percent of their  tickets while finishing tied for last in 2006-07 demonstrates a solid, loyal fan base in Los Angeles. And it’s been there for some time. The teams value has soared from 118 million in 1997 to a current value of 580 million.

Now let’s look at some very traditional, hockey rich franchises, starting with the Chicago Blackhawks. Does cold weather, proximity to Canada or “traditional market” decide profitability? How does on ice performance affect attendance in a hockey “hotbed?” Let’s see what the numbers say.

From 2003-04 to 2014-15 the Blackhawks have seen a roller coaster of attendance figures. In 03-04 Chicago drew only 13,253 fans finishing 27th in the league, at 58 percent of the standing room capacity of the United Center, the second lowest per game average in our survey, Lower even than the current poster child of “franchise futility” the Arizona Coyotes 2014-15 total of 13,345. The following year was even worse, checking in at 29th overall.  How is this possible? Was it the on ice performance that turned away the fans in Chicago?

From 2003-2007 the Blackhawks missed the playoffs.In 2003 they had the second worst record in the league with 59 points. Only Pittsburgh was worse with 58. Missing the playoffs again in 05-06 with a not much improved 65 points saw the attendance drop to 13,318, twenty-ninth in the league. In 2006-07 The Blackhawks drew only 12,727 fans, second to last in the NHL, again finishing last in the Central Division. How could such a tradition rich, cold weather team draw roughly 3,500 less fans per game with barely 55 percent of tickets sold, than the warm weather, non traditional market Los Angeles Kings during similar periods of on ice ineptitude? We have heard several reasons mentioned for this, most often hearing the lack of a TV deal, or the ownership wasn’t supporting the team as well as the fans might hope. But when you look at the next few years, it may be that on ice performance drives ticket sales in Chicago.

Beginning in the 2007-08 season the Blackhawks fortunes began to change. While they still missed the playoffs, they selected Patrick Kane with the number one overall pick in the 2007 Entry Draft. Having picked Jonathon Toews with the third overall pick the previous year, the Blackhawks on ice fortunes were improving, along with their attendance. They brought in 16,814 fans per game that season good for nineteenth in the league. Still well below the 90 percent threshold, but trending up. In the 2008-09 season, the Blackhawks would return to the playoffs and their attendance would continue to mirror their performance. In fact, they would lead the league in attendance with over 100 percent of tickets sold bringing in 22,247 per game. With skillful management building the team around Kane and Toews the Blackhawks would go on to win the Stanley Cup in 2010 and 2013. They have now reached the Western Conference Finals in three straight years and five out of the last seven.

On the financial side of things, the Blackhawks, in their lowest attended season. had negative operating revenue of 4 million dollars. All other years in the survey they had positive operating revenue reported by Forbes. Peaking last year with a 50 million dollar surplus, and a whopping 110 percent capacity average, easily taking the number one spot in both percentage of tickets sold and number of fans through the door, The sixth straight year the Hawks have led the league in attendance.

It was noted that Bill Wirtz claimed to have lost $191 million dollars from 1997-2007, however, when the revenue from the United Center and the Chicago Bulls among other events is factored in, the Blackhawks are very successful. Although, it must be said, attendance at the United Center appears to mirror on-ice results more than any other team we looked at.

In the next part of this three part blog, we will look at more franchises in depth like the Minnesota Wild and the Dallas Stars to see if we can determine if hockey works in two cities with the same franchise!

Thanks for reading, feel free to send any feedback to MarkWarner@VegasHockeyPodcast

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s