Friday, May 22, 2009

The money pit in Phoenix

As a follow-up to a recent post on the Phoenix Coyotes, it's only necessary to point out the number-crunching From The Rink did about Glendale:
"... it's all but impossible for Phoenix to turn a profit, even under ideal conditions. The team's expenses are too high and its potential for generating revenues too low barring a long playoff run and a massive price hike." — James Mirtle
The great mc79hockey also looked at the team's expenses and wondered how in hell they think they can make money settling cut-rate tickets to some of the NHL's smallest crowds.

That doesn't necessarily give people in Canada license to bash people in Phoenix who did actually support the Coyotes. The fans weren't responsible for profligate spending and the NHL's broken economic model — or for the birdbrained decision to build a hockey arena in Glendale, Arizona, so far from Phoenix's downtown core. There is also the more macro concern that Arizona "was one of the most severely affected states" for foreclosure filings last month (Phoenix Business Journal, May 13). When people are losing their homes, it's little tough to fork out more money for hockey tickets. Businesses probably have less latitude to gobble up tickets which can lavished on clients. As Mirtle notes, though, the dream scenario for preserving the NHL in Phoenix involves a massive price hike:
"To hit those ticket revenue figures, prices would have to increase significantly from the average $37 current average price, however. My rough math tells me that, even if the team sold an extra 3,000 seats a game at current rates, they'd be $12-million shy of the "potential" ticket revenue figure here, meaning tickets would have to cost roughly $15 to $17 more on average to hit that mark."
Meantime, the one irony of all the Balsillie-boosting, as others have noted, is you'd move a team from one economically devastated area to another, Hamilton.

As a sidenote, it seems like a lot of us up in Canada are throwing stones from a glass arena. It's a bit of a collective conceit that Canada has some monopoly on supporting major league hockey. Kurtenblog noted earlier this week there was one season during the pre-lockout era when the Nashville Predators had a higher average attendance than Calgary, Edmonton and Vancouver. (Granted, hockey was a novelty in Nashville, and who knows what the difference were in average ticket price and comped tickets.) We're not so perfect.

1 comment:

Anonymous said...

I don't think canadians really should be bashing phoenix.But what worries me is the reasons they have lack of fan support.One debate i got in to someone said they ticket prices were way to high.Yet from what i understand they have some of the lowest ticket prices in the league.The other thing is someone said put a winner on the ice and everything will be fine.I find it hard to beleave they will sell out every game if there is a winner on the ice.Some markets are very good some are good and some just are not hockey markets.

Jayme R