In Southern Markets, NHL Skating on Thin Ice
Published: Tuesday, October 8, 2013
Updated: Tuesday, October 8, 2013 01:10
If you’re a hockey fan, there is a lot to look forward to this year. For one, you are going to get to see a full 82-game schedule of amazing goals, bloody fights and big hits in the NHL. The Winter Classic, an outdoor game held each year on New Year’s Day, will take place at Michigan Stadium, also known as “The Big House,” where over 100,000 fans will watch the Detroit Red Wings take on the Toronto Maple Leafs in an Original Six matchup. The winter Olympics will be held in Sochi, Russia, this February and — after the heart-stopping gold-medal game of 2010 — hockey is the most-hyped sport of the games. Finally, the NHL’s division realignment means less travel for teams and more intense, geography-centered rivalries.
But if you go to a pub in southern or western cities and ask for something “on ice,” most bartenders won’t assume you want to watch the hockey game.
Even before current NHL Commissioner Gary Bettman’s reign, something called the “Sun Belt strategy” came into existence. This NHL expansion strategy put teams in Florida, North Carolina, Arizona, and Southern California with the aim of expanding viewership and revenue and boosting popularity.
The strategy has had quite the opposite effect. According to Forbes, the top five NHL teams in terms of revenue run a combined $212 million profit, but the bottom 25 teams in terms of revenue run a combined $86 million deficit.
Most of this deficit is found in franchises in the South or West, where fans attend hockey games primarily because ticket prices are embarrassingly cheap, and because local television contracts either are not lucrative or do not exist (see Phoenix Coyotes).
The Atlanta Thrashers, perhaps the best case of team having no business in a city, moved to Winnipeg, Manitoba, to operate in a more hockey-friendly area. In 2008, the Phoenix Coyotes filed for bankruptcy and were owned by the league for four seasons until a sale approved in June meant the team would stay in Glendale, Ariz., and not move to Seattle. When Northern teams play games in Florida or North Carolina, the stadiums are packed with more Northeast snowbird grandparents than local fans. In short, teams in warm-weather cities are experiencing quite the cold front, in terms of attracting new fans.
Many proponents of Sun Belt NHL franchises argue that the division of revenue in the league simply needs to be more fair and efficient. If the more profitable teams were to be taxed a higher margin by the league, teams with lower revenues would have more funds to operate with. But would this solve the revenue problem or just kick the can down the road?
If revenue sharing is increased, the problem is being prolonged, not solved. Why keep NHL teams in cities where they are sure to be in the red? It seems the league is afraid to address the obvious solutions: relocation and contraction.
Across the United States and Canada, there are a handful of markets that could sustain a financially solvent hockey franchise. In Canada, Quebec and Hamilton are cities that come to mind, with hockey-crazed populations that each top 700,000 in their metro areas. In the U.S., Seattle has expressed interest in a franchise and shows signs of being able to support one. Even Hartford, Conn., looks to be capable of once again owning a franchise, as Hartford Whalers merchandise was a top-seller in 2010 even though the team had relocated 13 years before.
Relocation alone, however, will not entirely solve the league’s problem, as there are far more franchises in dire straights financially than there are cities capable of supporting an NHL franchise. The real issue is that the league is too expansive; there are not enough casual fans to support a league with 30 teams. If the league were to contract to 24, 20 or even 18 teams located in hockey-crazy markets, those teams would enjoy more prosperity, and the league as a whole would be in better shape regarding TV contracts, ratings and revenue sharing. Fewer teams would also mean a higher concentration of talent on rosters, inevitably increasing the quality of play across the NHL.
Most people in the South simply don’t like hockey because it is simply not a sport meant to be played in the desert or the tropics. Until that fact is reflected in franchises’ geographical locations and the size of the league as a whole, hockey will continue competing with bass fishing on Versus rather than with the NBA on ESPN.
Matt Castaldo is a junior in the College. FULL CONTACT appears every Tuesday.