ATTN: NHL, Canada loves hockey

With the release of a study done by the University of Toronto Mowat Centre for Policy Innovation titled “The New Economics of the NHL; Why Canada Can Support 12 Teams” (Full PDF document can be read here HERE). I asked myself this question "Does the NHL realize Canada loves hockey?" 


For those of you living under a rock this past year, let me catch you up. The Phoenix Coyotes are for sale, but are caught in an potential abuse of taxpayers dollars lawsuit where the City of Glendale (Coyotes home) will give the new owner $100 million to purchase the franchise. The Goldwater Institute (government watchdog) is crying foul and threating with a lawsuit. So the sale is in limbo. Atlanta Thrashers are for sale and nobody is stepping up to buy the money bleeding franchise. With these two franchises potentially up for sale and relocation, the question many Canadians are asking is "why does the NHL (Bettman) resist putting another franchise in Canada?"  


Canada's six franchises largely support the NHL and the Mowat study confirms this. 


Canadian television stations pay over $140 million per year to nationally televise NHL games in Canada; $100 million for CBC, $40 million for TSN, and RDS is unknown (Mowat p.6) . In the US, the NBC and Versus deal is rumoured to be around $100 million. Pretty low amounts when compared to what the NFL and NBA receive per seasons. But what should be noted is that the CBC is funded by Canadian taxpayer dollars. 

American teams are entitled to at least 80 per cent of the national broadcast fees paid by CBC, TSN and RDS. But after revenue share is paid out to poor US teams, the actual percentage of Canadian national TV revenue going to American teams is higher—perhaps as high as 90 per cent.(Mowat p.6)

With the CBC being the largest contributor to NHL TV revenues, Canadians are funding the poor USA franchises with tax dollars. 


The next important statistic to look at are gate revenues. Out of the top seven teams in the NHL with the highest ticket prices, five are Canadian franchises with all six averaging prices above the league average ticket price (Mowat p. 6). The six franchises can charge this because there is such a high demand for NHL hockey, but not enough supply. This is not the same for the sun belt franchises where the demand is so low that ticket prices are comparable to a Canadian Major Junior game. The only Canadian team not able to sell out every regular season game last year was Ottawa; they still managed to fill the rink to 98.8% capacity (ESPN.com). Therefore more revenue is leaving Canada and heading even further south of the border. 


I am not knocking the NHL revenue sharing set up. It is necessary and it should have been set up a long time ago so the Winnipeg and Quebec franchises could have been saved. What I am saying is that since a significant amount of revenue is generated in Canada, why not put more franchises in Canada to help increase that revenue?


Despite this information the NHL continually refuses to relocate struggling American franchises to Canadian cities who would be more than willing to support a franchise. Bettman has been fighting to keep the Coyotes in Phoenix despite the club being a financial burden on the league. 


The Mowat study says Canada could support 12 teams. Well, that is a little extreme, but if I was sitting in the commissioners chair here is what I would do. I would pack up the Coyotes and move them right back to Winnipeg. Next would be to move Atlanta to Quebec City. Let them play in the Colisee Pepsi for a season while a new rink is built. Keep in mind that it seats over 15,000 and Atlanta averaged 13,403 this year. 

Quebec City - Colisee Pepsi

Then for the 2012-13 season I would look to move Florida to the Greater Toronto Area where a second NHL franchise would flourish. 


Of course there are other factors to consider in why the NHL is trying so hard to stay in the sun belt region. But when you look at the state of the economy in the US and how hockey is so poorly supported all over the US, it just makes sense to put at least two more teams in Canada. We are already paying for them anyways.