Wednesday, June 24, 2009

Bring back the Jets: Taking the high road!

One prevailing thought whenever Bring Back the Jets talk flares up is that Winnipeg is a "warehouse town."

No offence — that phrase was furnished by a Westerner who was born in the 'Peg, honest — but a piece from hit upon that point. The high road to take is when/if the NHL faces up to economic reality, then Winnipeg becomes more than workable.
"(T)he league would have to dramatically contract, which is a possibility considering how many American teams are in financial trouble. 'The NHL has to shrink,' says (Rob) Warren (executive director of the Winnipeg-based Asper Centre for Entrepreneurship). "A source of mine in the league has said that anything south of New York you want to get out of because those aren't good hockey markets. You might find a pocket here or there, but places like Carolina and Florida, those are not traditional hockey markets."

"If the NHL becomes smaller, player salaries will come down, and then Winnipeg might be able to afford a team. Author Jim Silver explains that salaries 'aren't consistent with anything in the real world' and that while players should be well paid, they don't need $1 million a year.

"Warren adds that while contraction won't stop the superstars from getting the big bucks, everyone else's salaries will come down. Then it will be less expensive to purchase, and run, a franchise. 'And, when that happens, Winnipeg becomes a much better prospect for NHL hockey.' "
It is important to keep the horse and cart in the correct order, now that it is open season and on struggling Sun Belt hockey teams.

Most of you know, even if the media does not properly acknowledge it when they're covering those Make It Seven rallies, that raw attendance totals are not a good tell-all baseline. Average ticket price has to be factored in (which is part of why the Phoenix Coyotes with their $9 tickets are beyond saying). Secondary ticketing (which can get pretty greasy) also counts. Is there a resale demand when people or corporations who have tickets opt not to use them? Last, but by no means least, in the NHL you have to sell the luxury boxes, which brings it back to Winnipeg being a warehouse town. It is not a town of big spenders, not that there's anything wrong with that. As the writer from put it:
"The only way the Winnipeg Jets will succeed is if they sell all 50 of their corporate boxes, and at a much higher price than they do now. Currently, a suite at the MTS Centre, for Manitoba Moose games, costs between $43,500 to $67,500. At Rexall Place, where the Oilers play, boxes run from $49,200 to $410,000 a year, while luxury suites at the Air Canada Centre cost $500,000. In order to make money, arena owner True North Entertainment would likely have to significantly increase its annual corporate box costs. The problem, however, is that it might not find any buyers.

"Warren says that so far, no one that he knows is willing to purchase a suite at NHL prices. 'I haven't seen the corporate community step up,' he says.

"Warren knows because he's already asked. 'I spoke to one senior executive with a Winnipeg-based insurance firm point blank whether his company would buy a luxury box. He said no. Another fellow in town, Doug Harvey from Maxim Truck & Trailer — he's a huge hockey fan — also said no. Unless you get a guy like Harvey on board it's tough in this market to make those revenue targets.

" 'It's the cost,' he adds. 'They just don't see the benefit. They don't run enough clients in from out of town to make it worthwhile.' "
It is something to keep in mind, since Winnipeg talk flared up two weeks ago in connection with the Atlanta Thrashers (Scott Burnside at said June 8 the Thrashers are unlikely to relocate, but that does not mean Winnipeg is not in the game). As much as we would all like to Make It Eight for chauvinistic and patriotic reasons, you got to keep your eyes peeled to the economics. That's not a business guy talking, that's a sports guy talking (sad but true, maybe).

Sports: The return of the Jets?; Winnipeggers would love to have NHL hockey back in their city, but it's going to take more than nostalgia to fuel a successful franchise (Bryan Borzykowski,


Jordie Dwyer said...

Funny how that writer's name is eerily similar to a certain writer that is also from the area of the Peg...
Then again, there wasn't a curling reference thrown in so it couldn't be him....LOL

Chris said...

A personal agenda by the Canadian Business author perhaps? Considering "experts" Ron Warren and Jim Silver are long time Winnipeg naysayers at best, the author "cherry picked" his sources. Ask Warren for his original take on Ikea coming to Winnipeg? He said they would never come to Winnipeg. Some business expert! And Jim Silver has an axe to grind with NHL hockey going back to 1995, so does his comments, although very self-serving, really have merit? I'll trust Mark Chipman's comments any day over these two "rain-on-any-parade" very vocal minority locals.

Check out a site that has objectively reviewed the news about the NHL and provided their own financial projections for an NHL team back in Manitoba, based off numbers from the NHL:

Myth Conceptions:

Myth #1: Arena Too Small

Myth #2: Ticket Prices Too High

Myth #3: No Ownership Group

Myth #4: Population Too Small

Myth #5: No One Believes It Can Happen

Myth #6: Salary Cap Is Too High

Myth #7: Not Enough Corporate Support

Myth #8: No Teams Looking To Relocate

Myth #9: Not Enough Premium Revenue Streams

Myth #10: Reasons The Jets Left

Myth #11: NHL Doesn't Want Winnipeg

Myth #12: Canadian Dollar Too Low

sager said...

Thanks, Chris. Your point 6 would speak to the point here, but all it says is, ``Fact: The cap grows as league revenue grows. It`s very doubtful Winnipeg`s revenue won`t keep pace with the NHL average.``

The big matzo ball hanging out there is that Bettman`s NHL is built on artificial markets. As James Mirtle wrote this morning (, `if revenues fall this coming season, as expected, escrow totals would be even higher than this past season and take a big bite out of players' paychecks.

`No wonder we're hearing about two potential big stadium games.

`If I had to guess where the cap's going in the future, my money would be on it remaining below $60-million for another season or two beyond 2009-10. If escrow continues to rise, the NHLPA will likely back off using the inflator and really tighten team payrolls on the top end.

`And, by that point, we'll be looking at the two sides working on a new CBA. Oh joy.`

Point being, Winnipeg`s better off if the league straightens out its economic woes. Personally, I`m all for the city and province being back in the league.

The point here, and it is a side point (that`s mostly what I`m good for, side points) is someone cheering for Winnipeg, which we all are (right), would rather the league had a cap between $30-40 million instead of being a finanicial mess where it`s $57 million for next season.