Star exclusive: Five of the top 6 revenue-generating hockey clubs based in Canada

Rick Westhead Staff Reporter

A secret National Hockey League report detailing the ticket revenues of its 30 teams provides additional ammunition for those suggesting more struggling U.S.-based teams should relocated to Canada.

The confidential document shows that the six Canadian NHL clubs last season accounted for about 33 per cent of the $1.2 billion (U.S.) in league ticket revenue. In 2007-08, Canada's six teams represented 31 per cent.

The report, which was obtained by the Star from several league sources, suggests operating a club north of the border is much more lucrative for the NHL. Five of the top six-revenue generating clubs are based in Canada, with the New York Rangers being the lone team from the U.S. in that group.

?There will be a lot of people using these numbers to argue that the league would be better off with teams in Quebec City and Hamilton, Ont., rather than Columbus, Ohio, and a number of other locations where the NHL is not setting the world on fire,? said Marc Ganis, president of a Chicago sports advisory firm that has advised the buyers of several NHL franchises.

?The NHL had this initiative in the 1990s to expand into the U.S. sunbelt and by anyone?s definition, that strategy has been demonstrated to be only marginally successful,? Ganis said. "I think the argument for more Canadian teams definitely has merit."

While the six Canadian-based teams outpaced their U.S. rivals in ticket income last year, it?s unclear where they did the same with sponsorship and broadcast revenue. The NHL and the NHL Players Association are still negotiating the final figures on a broad report on hockey-related revenue for 2010-11 season.

The NHL report does however indicate that some U.S.-based clubs have markedly improved their financial standing. For the most part, those clubs are playing meaningful playoff hockey with young exciting stars, but they have also found new way to connect with their fan bases.

The five teams who have most increased their ticket revenue over past five seasons are all based in the U.S. A year after winning the Stanley Cup, the Chicago Blackhawks generated about $1.1 million per home game in regular-season ticket revenue in 2010-11, more than double the $500,000 per game the team garnered in 2007-08.

The Washington Capitals' ticket revenue climbed 82 per cent in five seasons to $1 million per game last year. Other top gainers were the Pittsburgh Penguins, with a 38 per cent increase ($1.1 million per game in 2010-11), the Boston Bruins (up 38 to $1.1 million) and the New York Rangers (up 23 per cent to $1.6 million.) The Penguins, for instance, have had 227 consecutive sellouts, and boast 14,000 season-ticket holders. There's another 9,000 on the waiting list.

Dave Morehouse, president of the Pittsburgh Penguins, said his team's improved fortunes aren't only because the team has superstar Sidney Crosby.

Unlike some U.S.-based NHL teams, the Penguins have emphasized growing youth hockey in the city.

"We have at least three or four games every year where we hold 900 tickets back and on the day of the game, students can get any seats for $25," Morehouse said. "We also have a free exhibition game each season. We don't sell it to a sponsor or anything. We just get 18,000 tickets printed and distribute them through youth hockey. It's the rowdiest exhibition game you?ll ever see.

The report also shows that after years of steady increases, the league's most profitable teams, including the Toronto Maple Leafs, are no longer reaping double-digit increases in ticket revenue.

The most improved Canadian club was the Vancouver Canucks (up 21 per cent to $1.7 million.) "This is good for the league so long as the Canadian dollar stays where it is," said former Maple Leaf Sports executive Bill Watters. "If it goes back to 60 cents what a mess the NHL will be."

The currency exchange rate is important because Canadian NHL teams generate most of their revenue in Canadian dollars while their largest expenses, player costs, are in U.S. dollars. The more valuable the Canadian dollar is, the less expensive it is for Canadian teams to buy U.S. dollars to cover their expenses.

It will come as no surprise that the richest NHL team was the Montreal Canadiens, who league sources said were slightly ahead of the Toronto Maple Leafs with $2 million worth of ticket revenue per game.

Based on 41 home games, the Canadiens generated about $82 million in 2010-11-excluding revenue from preseason and playoff games.

While Canadian-based clubs are among the most successfully, the report suggests that ? with the exception of the Canucks ? ticket pricing has reached a tipping point north of the border. The average Leafs ticket is now twice that of the Boston Bruins, the most recent Stanley Cup champions. It appears the Leafs may have maxed out.

The report also highlights the continued struggles for the league-owned Phoenix Coyotes, who garnered $420,000 per game in 2010-11, down from $450,000 in 2007-08. The Coyotes are losing more than $30 million a season and several league executives and NHL Players' Association officials have said it's only a matter of time before the club is relocated.

"It's strange for sure," Watters said. "It's a nice arena, but it won't work. The location is so far outside the city of Phoenix that for fans, it's like driving from Burlington to Oshawa every night."

Perhaps the most surprising data from the league report concerns the New York Islanders, whose $392,000 ticket revenue per game was only better than the Thrashers. The Islanders' ticket revenue was down 28 per cent over the past five seasons, despite the fact the team plays in North America's largest media market.

The Dallas Stars, who had the biggest decline in ticket revenue among the 30 NHL teams, generated $660,000 per game, down 30 per cent from $950,000.

Unlike other pro sports leagues such as the National Football League, which generates billions of dollars in revenue from huge TV and sponsorship contracts, the NHL is a so-called "gate-driven" league where ticket revenue accounts for close to half of the league's total revenue.

The league often publicizes its attendance, and has suggested the number of fans to attend NHL games has been record-setting in recent seasons. Trouble is, the NHL's attendance figures are based merely on tickets distributed, not overall revenue from ticket sales.

Source: http://www.thestar.com/sports/hockey/nhl/article/1109400--for-nhl-the-cash-is-in-canada

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