Hockey Headlines

Tuesday, 6 July 2010

Setting The Record Straight

I'm quite fond of the work that TSN has been putting in over the years in regards to their hockey coverage and hockey telecasts. They have picked up some impressive talent to further their efforts, and the overall product has improved exponentially in the last decade. Tonight, however, I'd like to spend a little time looking at their most recent project brought to light thanks to journalist Dave Naylor and his yeoman's work in asking "Why Not Canada". Mr. Naylor, with TSN as the delivery method, looks at the four Canadian locations that have been linked with NHL franchise relocation in the last decade, and the first city he tackled in this project is Winnipeg, Manitoba.

As you're probably aware, the True North Sports and Entertainment Group has expressed their interest in owning an NHL franchise, and NHL Commissioner Gary Bettman has stated that Winnipeg is an attractive choice should an NHL franchise became available for relocation. While it's far from being a "done deal", it appears that the work that Mark Chipman has done in Winnipeg has once again made the central Canadian city a possibility for the top hockey league on the planet.

Professor Norm O'Reilly, a highly-respected intellectual who taught at Stanford before moving to the University of Ottawa, ranked Winnipeg in several key categories that he deemed are vitally important in the viability of an NHL franchise. And, to be honest, I'm pretty impressed with Professor O'Reilly's candid and honest look at Winnipeg.

Here are Professor O'Reilly's rankings for Market Attractiveness:

  • Economy: B-
  • Demographics: C
  • Market size: C
  • Corporate presence: C+
Overall Score for Market Attractiveness: C+

Wow. Someone finally has the fortitude to actually put the pieces together for the rest of the country to read. Let's work through these categories with my takes.

Economy: The Winnipeg economy isn't bad, but it just isn't good. It's a coupon-clipping, penny-pinching town, and that's a great trait to have when trying to curb inflation and rising prices. It's not such a good thing to have when the MTS Centre will need to be filled to 90% capacity each and every night. People will spend money to see the NHL, but it's a tough sell for most middle-class families for forty-one games.

Demographics: Winnipeg doesn't have a sprawling community outside of its borders it can draw from, so the 700,000 people that live in Winnipeg will need to step up to make it happen.

The key demographic of persons aged 24-39 occupies approximately 19.7% of Winnipeg's population, but this number should come with an asterisk. The population in Winnipeg is aging rapidly, and the number of senior citizens is outgrowing the birth rate. The only reason Winnipeg's growth increases is due to immigration, and that's where the focus of the marketing will need to be directed in terms of attracting new hockey fans.

Market Size: Winnipeg is Canada's seventh-largest municipality in Canada, but it is limited by the fact that there's no Golden Horseshoe nearby like there is in Hamilton or Toronto. Again, the 700,000 people in Winnipeg will literally have to support this team. There won't be many who drive hours in a Manitoba winter from out of town for all forty-one home games.

Corporate Presence: While I feel that a lot of small companies were slighted by this ranking, it is very true that there are not a lot of global companies who call Winnipeg home. However, as Mr. Chipman stated, "We're very satisfied that there is a large and strong enough corporate base. The fact that we have all of our suites sold. We've got a waiting list of about 50. The size of the community is such you can get a real good sense of the corporate communities desire and appetite for a team."

While it might be true that there are a number of suites that are currently shared by two or more companies, this is true in other markets as well. Sure, the large markets sell their suites with no trouble, but there has to be some credit given to the businesses that are making the Manitoba Moose successful. The price tag may go up, but it appears the businesses in Manitoba are in the game for the long haul. Of course, the price tag determines who will buy in every scenario, and some of these smaller businesses may just determine that a suite is not worth it. Only time will tell how the supply and demand will pan out.

My view? The overall C+ rating might be a little low, but it's nearly on the mark. Again, I would have bumped up the corporate support mark a little, but I think Professor O'Reilly is pretty close to being correct in all his Stats Canada views.

Here are Professor O'Reilly's rankings for Franchise Viability:
  • Arena and Location: B+
  • Competition and Barriers to Entry: A
  • Potential Owner (Mark Chipman, David Thomson): A
Arena and Location: The downtown MTS Centre is a gorgeous facility that was ranked as the 39th-best venue on the planet in 2009. While the seating is just a shade over 15,000 for hockey, the arena is warm and intimate, and has successfully hosted a number of world-class hockey events since being built. It is certainly NHL-calibre on looks alone, but the seating would make it the smallest building in the NHL.

The location of the arena downtown has worked to revitalize the downtown area in Winnipeg, but the city has a long way to go to make the MTS Centre the "jewel" of the downtown area. Parking is always a sore spot with Winnipeggers, and that can't be overlooked.

Competition and Barriers to Entry: Zero. Winnipeg currently is home to the Manitoba Moose, and the Moose are owned by True North Sports and Entertainment. If that group was to acquire an NHL franchise, they would unload the Moose to a new city. Unlike Toronto, two hockey teams wouldn't work in Winnipeg, so the smaller crowd-drawing Moose would likely be sent packing.

Potential Owner: There is no denying that the Chipman-Thomson team would be a powerhouse in terms of its ownership group. The Manitoba Moose are consistently one of the best teams in the NHL in terms of earning the greenbacks, and it's no secret that David Thomson is Canada's richest man. However, both men are astute businessmen, and neither will be happy if crates of red ink are being delivered to the MTS Centre.

Winnipeg's Final Grade: B

A very fair grade, and one that should hit home for Winnipeggers. While a grade of "B" is nothing to be disappointed about, it also says that there is still work to be done if Winnipeg wants to join the country club again. When looking at the other three cities - Hamilton, Quebec City, and Toronto - Winnipeg will probably feel like the inferior little brother to these other cities.

I'm here to say that the NHL is definitely on the radar for Winnipeg, and that Winnipeg is certainly in the minds of the suits that sit at the NHL Offices. There is still a lot of work to do to make Winnipeg a better NHL market, but there's no doubt that the important factors - an NHL-suitable arena, viable ownership, and a hockey-mad fanbase - are definitely in place in Winnipeg.

Some of you who have been reading this blog for a while might seem surprised at this turn of face by me. As you may be aware, I have been beating the drum for a long time that Winnipeg is NOT an NHL city. After having learned a great deal about the negotiations that have gone on behind closed doors between the NHL and True North Sports and Entertainment, I'm simply saying that Mark Chipman and David Thomson are very serious about putting an NHL team into Winnipeg.

Because they are excellent and wise businessmen, though, there is nothing in place with the NHL that states that the Manitoba capital will be the first landing spot for a homeless NHL franchise. Chipman and Thomson will continue to do their research and due diligence in order to make the right decision for their business needs.

How many times can you say that about prospective NHL owners over the last twenty years? If nothing else, it's this business acumen that should have the NHL Board of Governors excited at the prospects of having Winnipeg back in the league. After all, it's not everyday you find a legitimate billionaire and one of Winnipeg's best businessmen willing to buy into your club. And all of this can be yours if the price is right.

Then it's up to Winnipeg to make sure that the team remains viable and profitable, and that's the biggest question mark in this entire equation.

Winnipeg back in the NHL? Possible, but it's going to take a lot of work. Then again, you don't get something for nothing, and that's an adage that all Winnipeg NHL fans should live by.

Until next time, keep your sticks on the ice!

1 comment:

mtjaws said...

Interesting analysis of this city. I always thought the smaller arena wouldn't be up to the NHL's standards, but now I think if they can fill this one for many years with a new team, then maybe they would consider a bigger place down the road. But no sense building bigger now to just watch it be kinda empty.

And since they are always in any relocation conversation, I wonder how Phoenix would grade in these categories. I think they would be fairly high on most of them (which is why the NHL wanted to enter the market), with ownership being the one failing grade. I truly hope that ownership issue gets straightened out, and the team can build upon last season's success in the frozen desert.