What Winnipeg Can Afford

Always such an ill-informed discussion, often filled with ludicrous figures and assumptions.  One thing needs to be made perfectly clear.  There is one key factor when running a campaign like I do.  You absolutely need to know your city.  Inside and out.  Good and bad.  Thick and thin.  And let me tell you, the Winnipeg Jets never left town because there weren’t enough fans or because we wouldn’t pay the prices and the same misconceptions won’t inhibit a return to the Manitoba capital either.  Neither will the capacity of MTS Centre (a perfectly intimate 15,000+ currently).  In fact these three essential ingredients; cost to attend, number of fans attending and enough seats to accommodate those fans, all combine to make quite the recipe for a successful Winnipeg team in the NHL.

As I already outlined the supply-and-demand argument for MTS Centre’s capacity in a previous post, I will instead visit the issue of ticket prices and what is required to sustain an NHL franchise in Winnipeg.  You’ll have to do me a huge favour and take my word that Winnipeg is hockey’s hotbed, second to none.  We are hockey mad here and the the desire for the sport; playing it, watching it, talking about it, is un-paralleled anywhere on earth.  (Here’s where citizens of Manitoba help me out here by posting a comment about our passion for the sport).  After all, Winnipeg is the birthplace of hockey’s first millionaire contract, given to one Bobby Hull in 1972.  Kinda came back to bite us in the butt didn’t it?  Oh the irony.

You might say that such a comment goes to prove that the NHL is in fact too rich for our wallets.  It does not.  In 1995, after years of falling on deaf ears, the owners of the Winnipeg Jets, led by Barry Shenkarow finally proved to the people of Winnipeg that the Jets could no longer exist in Winnipeg Arena, especially being that they didn’t even control it.  It was a building that was outdated the day after it was updated…several times.  It was a barn with a rink in the middle of it.  It was an awesome place to watch a hockey game with beer and buddies, but not to wine and dine a client or take a date.  The latter is what sports became in the 1990’s.  Gone are the Boston Gardens, Chicago Stadiums and Montreal Forums, replaced by luxurious office buildings with corporate logos splattered at every turn, warm cozy seats and grills with fireside dining.  It is precisely the lack of this kind of facility that made Winnipeg “too small” for the NHL.  Winnipeg lacked the ability to generate the kind of revenue that these new arenas could provide and that were needed to operate a pro hockey franchise.  Costs were escalating, sure, but with no parking or concession revenue, no control of the sub-par arena that did exist and nowhere near the number or quality of luxury suites needed, there was no hope of holding the team above water.  Without getting too deep into a history seminar here, the bottom line was that Winnipeg had the fans and those fans had their wallets open.  Always did.  But every time they opened that wallet to buy some popcorn, their beloved Jets never saw a penny of it.

Fast forward.

It is 2009, and the same fans exist in Winnipeg, passionate and longing for the NHL’s return, and maybe even a “sorry about the past 14 years, we screwed up” from the league.  I’m certain a gift-wrapped franchise will suffice as a replacement for that apology.  The wallets are still open.  We have made MTS Centre one of the busiest venues in North America and would love nothing more than to see 44 of those nights booked for NHL hockey.  But this time around the popcorn money does go to the team (currently the Manitoba Moose of the AHL) whose owners are also the building’s administration (True North Sports & Entertainment).  This time around there are luxurious suites and places to wine and dine.  There are 50 of these luxury suites that over 90 companies support the cost of, albeit at AHL prices.  But they will not go away once the NHL returns.  In fact there will be a longer line-up to get in one of them, even at triple the cost of the NHL.  In short, we got our building, just 8 years too late.

So just what does it take to generate the kind of capital needed to run a successful NHL franchise in an arena that currently seats 15,000?  There are many variables that go into all kinds revenue streams.  The one that can be most easily estimated is that of straight ticket and suite revenue.  You’ll be surprised at just what a market like Winnipeg can do.  Remember, there is no MLB, NFL, NBA, NASCAR, NCAA, MLS or other major sports to compete for corporate dollars or disposable household incomes.  Nor would any other sports teams share MTS Centre and therefore revenue from suites etc.  A Winnipeg team, owned by the same group that owns the building (True North) would be the sole tennant of MTS Centre and reap the benefits of profits from many other arena events like concerts, shows and other sporting events which fill the calendar up on a regular basis. Winnipeg also draws a fan base from rural Manitoba, Saskatchewan, NW Ontario, North Dakota and Minnesota.

Furthermore, to many people’s surprise, is where Winnipeg would rank in terms of per-game gross revenue.  All scenarios are based on sell-outs each and every game.  This is where MTS Centre’s capacity serves to assist the situation.  15,000 seats is not a stretch to fill every game.  19,000 seats is.  Just ask about 18 current teams in the NHL.  The fact is, Winnipeg will have to fill the building.  There cannot be tickets available on game day.  That doesn’t play into the whole supply-and-demand, marketing 101 theme that I speak of so frequently.

Take a peek.

Tickets range from $35-$119 based on ticket packages or $45-$139 as a door price.  This puts the average ticket somewhere in the $65-$70 range.  Based on these ticket prices, per-game revenue falls around $1.1 million CDN in tickets plus $175,000 CDN in suites.  This translates to $950,000 USD (with suite revenue not included) and $1.1 million USD (with suite revenue included) which either way would rank in or near the Top 10 in the NHL based on 2007-08 figures obtained from National Hockey League via The Toronto Star.  A Winnipeg team would certainly fare better than a good portion of the league, including Phoenix, Atlanta and Florida, as seen representing the basement of this list.

Notice how a Winnipeg team would fall in the range of our closest market sizes in the NHL today, namely Edmonton, Calgary and Ottawa.  Also notice that the 6 Canadian teams make up the top 7 revenues in the league!  This is a significant finding.

It means we can compete.  It means with the right ticket cost scale, it works.  It means we could somewhere between 8th and 12th.

The six Canadian teams are holding the NHL up right now.  Six teams generate 34% of revenue. That’s one-fifth of the league earning one-third of its money, and with three of its six markets barely 1 million people.  Winnipeg would be no different.  Winnipeg would only help dump money into that revenue pool…a pool the players’ salaries are tied to by the way.  Don’t think the players aren’t very aware of how Winnipeg could put more money in their pockets.  You can bet they think about it every time they step onto the ice in Atlanta or Miami or Phoenix and see empty seats generating zero dollars.  For every dollar lost, 57 cents of it is lost on the players’ bankbook.  Hello Winnipeg.  A recent players poll named Winnipeg, only behind Las Vegas, as the players’ choice for a team to relocate to when it becomes necessary.  Above Toronto II, Hamilton, Quebec City, Kansas City, Seattle, Oklahoma City and Portland.  Heck, Winnipeg Jets merchandise still outsells teams that actually exist in the NHL today.  We are now a very attractive destination.  Who would have thought?

These per-game gate revenues are based on 14,200 seats and 800 luxury suite seats.   Winnipeg can afford NHL hockey.  We have more fans per-capita then anywhere on earth and we will pay for it.  We have the corporate community support.  We have the arena.  Here’s how that arena seating map might look for the NHL, followed by a list of NHL gate-revenues by team.  For a more detailed revenue breakdown visit JetsOwner.com.

26 thoughts on “What Winnipeg Can Afford”

  1. I question Lee’s ill-informed statements – KC is not a hockey market – the NHL failed there before (lasted two seasons). Vegas is a service-oriented city with one-third of the population working at any given time and the NHL has already failed in the desert. Even with a new rink there would not be much of a ticket base – it would all be freebies from the Casinos. Tourists go there to gamble not watch hockey – the tickets would soon become worthless as a promotional tool.

    Winnipeg and Quebec were moved because of greed, not a lack of a fan base – if Napoleon fought half as hard for Winnipeg & Quebec as he has for Nashville and the Coyotes, they would still be in their respective markets.

  2. I’m still trying to understand why there is a Winnipeg writer for an NHL writers’ blog. If that’s the case then why don’t they appoint a Vegas and KC writer as well? Those cities are actually in line to get an NHL franchise.

    The NHL is not going back to Winnipeg any time soon. If there actually was a billionaire owner that believed your funny math then the Jets would already be back. But that’s obviously not going to happen as long as the current BOG has any say. The NHL’s priority is to places like Vegas and Kansas, and they stubbornly want to keep existing franchises where they are and work those problems out. I don’t think the optics of going to a place like Winnipeg is very appealing to the owners either, but you guys don’t seem to understand what the league wants.

    • Lee – we don’t just appoint writers – they don’t appear out of thin air. If you know of anybody that is as passionate and articulate as Darren and doesn’t mind working as hard to promote a team in Vegas then we would be happy to have them join us. Promoting hockey and wanting a team is a great thing. Feel free to forward any prospects our way.

    • Lee you are funny. You have no clue as to what is really going on, nor do you have any idea who is part of our ownership group. Try finding that out before you make idiotic comments. But I guess you’ll just have to wait and see a team land in Winnipeg before either KC or Vegas, or at the very worst, one year apart. And yes, thanks Bruce, I’d love someone to dig up a guy from Vegas to write a blog for this site. Good luck!

      But I forgot, Lee must know what the league wants. Sigh.

  3. The next couple of years will be very interesting for Bettman – he may have to deal with Atlanta, Phoenix, Tampa, Florida, Carolina, Nashville going bankrupt before next season. There has to be a point in time when Bettman has to come to grips that no amount of money in the world will help these teams. The AHL , ECHL or the IHL belongs in those cites, not the NHL. Winnipeg, Quebec (even with it’s old building), Hamilton, Toronto, Kitchener, Seattle, Portland, Saskatoon are all better hockey markets than the above mentioned NHL sites. As for lack of buildings for some of the sites – the Senators were in a building that seated 10,000 people for the first few years of their existence.

  4. Don`t like the moose, i go maybe once a year and its cuz a free tick was handed to me usually. However, if we had an nhl team, i’d pay 4 grand in a second for season ticks! Most of my friends feel the same way…BRING EM BACK.

  5. Good job Darren! I’ve supported the cause of Return the Jets for the last few years!

    Anyone who does not believe the Peg can support the NHL needs to have their head checked? Growing hockey in the South is definitely WAY MORE unrealistic than having a franchise in the Peg!

    Chances are if I migrate to Canada in the future I might end up in the Peg so definitely I HOPE the Peg gets back its Jets! It will make the city a whole lot more fun….

  6. Darren Darren,
    Great job once again.
    I am gonna link this to my facebook page for people to read.
    Wonderful job!!!
    Later buddy.

  7. I think the “Winnipeg is cheap thing” is yesterday’s joke. Take a look at the big ticket concerts that have just rolled through town in the last while: The Eagles (sold out at $250/ticket!!!!), WWE Raw taping, Celine Dion, Elton John (back to back shows), Bob Dylan, David Copperfield, the list goes on. All big dollar tickets and most sold out. Sure, you can say that these are “one and done” events, but it shows that when Winnipeggers want to see something, they certainly have the expendable income. And I really believe Winnipeggers want to see NHL Hockey. Even bloody useless preseason games sell big at inflated prices.

    With a league half-full of sand-bagging franchises, Bettman should be finding a way, by hook or by crook to get a franchise here ASAP.

  8. I don’t know where this “Winnipeggers are cheap” line keeps coming from. I’ve been here all my 30 years. I hear this line from time to time but I’ve never seen examples of it. We’re like everyone else – we pay money for things we want/need. If we can get it at a better price, we will. Isn’t that the definition of common sense?? In my opinion that makes us MORE likely to have disposable income for something like NHL tickets – because we aren’t paying terrible prices for things and living beyond our means. Like Darren has said, this city will support this team financially simply because it IS something we want. Badly. During hockey season, it would be the only show in town like it. So we’d pay for it. End of story. Your move, Bettman.

  9. The reputation of Winnipegers being cheap should start to go away. Things have changed in Manitoba, there is a lot more wealth now than a decade ago. As well, compared to much of North America our economy is doing really well. Regarding paying top dollar for tickets look at all of the concerts that now come to Winnipeg and notice that the MTS Centre is among the busiest venues in North America. Acts don’t reduce ticket prices because they are coming to Winnipeg. We pay as much as anyone else.

    Winnipeg does have an inferiority complex and a reputation for being cheap… but it is baseless and it is upsetting that former residents speak up like they are an expert on the subject when in truth they are not.

  10. Minnfan, how about comparing Winnipeg to Edmonton and Calgary, like the author does? Could it be that size and population are not as all-important as you’re assuming they are? If Edmonton and Calgary are more profitable hockey towns than Philadelphia or Detroit (or the Twin Cities), why can’t Winnipeg? It isn’t that much smaller.

    Second, even if Winnipeg ended up being less profitable than Philadelphia or Detroit, wouldn’t it still be more profitable than Phoenix or Atlanta — short term, long term, or any other term? A LOT more profitable, for that matter? That’s the REAL question here.

  11. Chris, BIG and I mean HUGEEEEEE difference between comparing Winnipeg to Philadelphia and Detroit . Even in down times. Not only size and population but corporate support

  12. I don’t know realist. Hockey doesn’t work in all markets of course, but if Philadelphia and Detroit can still find ways to sell out games in hard economic times I find it hard to believe a Canadian team would have such a devastating problem as you say.

    I honestly believe that a team will get people to come when there’s a buzz of excitement going around. I’ve been going to school in Washington DC for four years now. In those same for years, going to Caps Flyers games I have seen empty seats go to packed houses.

    You give Winnipeg a team, a high draft pick for a future star player, and a decent staff then you can be successful. If you can manage some excitement even early on it will keep people coming back.

  13. It’s all well and good to have these financial projections, but there’s one thing missing. Will the average Winnipegger step up and buy tickets to the games, and do so on an ongoing basis? I think the answer is no. I lived in Winnipeg for some 25 years before I left and if there’s one thing I know about that town is that people there don’t like to spend money – on anything really. I’m sure there’ll be a sentimental outpouring of support for a year or two if a team ever comes back, but it won’t last, especially with the Centre Ice package and Pay-per-View options available on TV. People will stay home in droves and pay $10-$15 per game to watch on TV with their entire family instead of paying $150-$600 (for tickets only) to take a family of 4 to a hockey game. Sorry guys, it ain’t happening.

  14. I’d love to see the nhl come back to Winnipeg. I looked at the chart and that says it all. Winnipeg should be in. It would be the closest city to me then with an NHL team. I want NHL in Winnipeg.

  15. Revised to also show $950,000 (revenue withut suites which may be how the stats are set-up).

    To “minnfan”:
    A) It is clear you haven’t checked the complete details of these figures ar JetsOwner.com which lay out exactly how these numbers are arrived at.
    B) Wild tix range from $28 – $103 Cdn for walk-ups as compared to my model of $45-$139. That’s an extra ticket cost of anywhere from $17 to $36 per seat. That alone goes most of the way to making up for the smaller capacity.

    C) There are 3,600 more seats in Xcel, but those extra seats would be up the highest reaches of the upper bowl where tickets are cheapest and therefore the extra capacity accounts for the lowest margain on ticket revenue.

    So as you can see, a 15,000 seat building with higher ticket costs and margains can indeed generate similar revenue.

    That being said, notice the revision which puts a Jets team $150,000 less per game than the Wild. So all things included, things should make more sense now.

    Wild = 3,600 more “cheap” seats
    Jets = higher ticket cost
    Conclusion = this narrows the gap created by capacity difference but Jets still rank slightly lower than Wild

  16. So a team in WInnipeg with 15K seat arena will generate the same ticket gate revenue as a 18,600 arena in St. Paul ?

    Don’t believe it

  17. I think that some of the “mainstream” media around the league (not just in Canada) ought to have a look at this article. It might open their eyes a bit.

    And if the media won’t look at it, get it to the play-by-play guys on the radio around the league. Let them talk about it during intermission. You may find that even some of the “southern” teams agree with you.

  18. I don’t think anyone who has ever been to the area doubts the passion for hockey that Winnipeg has. But the logistics of travel to and from during winter made it very difficult back in the Jets era and I think would still have to be factored into any plan for bringing a team back.

  19. Very well written article Darren!! I wish more and more people would open their eyes and see that this once “pipedream” is very much a reality. The return is only a matter of time….I for one can’t wait for it to happen. Sign me up for season tickets!!!!

  20. Thanks again Daren for pointing out a fact that is continually ignored by main stream media-the owners of the team will have access to all other revenue generated by the MTS Centre. With the MTS Centre being one of the busiest arenas in the world, there is so much being revenue being generated for the owners, and even if there would be a small loss for the hockey team, this revenue would be more than enough to cover it.

    I expect Chipman to be ready when the next team for relocation is available. Or just restart a team in Winnipeg when the Coyotes fail.

  21. One only needs to mention that “go Jets go” chants still resonate from the MTS center rafters to this day.
    As well as the return of our team, the NHL needs to get a hockey man in charge… Not a basketball lawyer.

  22. Another outstanding article Fordy,the research you have put together is right on the money. I’am still blown away how out to lunch Bettman is, by saying that all 30 teams are strong. He needs to wake up!!! The NHL needs to come back to Canada and especially Winnipeg because the fans here are some of the most intelligent in all of Canada! The game has to be sold and marketed to people who understand the game, not sun bathers and Grand Ole Oprey ticket holders.

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