Economist: Ducks not viable in Anaheim

Posted: 12/02/2012 by bc in Uncategorized

Via Toronto Globe & Mail:

From his vantage at the University of North Texas, in the Dallas suburb of Denton, economist Todd Jewell sees contraction of the National Hockey League – especially the money pits in the southern United States – as an inevitability.
While contraction is not often discussed around the NHL, the possibility is underscored by the NHL numbers put out by Forbes, estimates of team values, revenue and operating profit/loss. (Forbes reports six teams make 80% of the profit. Eleven teams are in the black With 13 in the red.)
Among the deepest money pits – the seven teams losing $10-million or more – four are in the U.S. south: Anaheim, Phoenix (obviously), Tampa and Florida.
“You’ve got to get rid of some of these teams with so little public support that can’t exist without subsidies from the rest of the league,” said Jewell. “I just don’t think the National Hockey League can survive with as many teams as it has in the southern states.”
Jewel posits relocation is more likely than contraction.

Not mentioned among the relocation possibilities is Kansas City where AEG built an NHL ready facility. To the NHL coffers there’s no difference between relocation and expansion. The NHL can charge a relocation fee equivalent to a franchise or membership fee. (Note: As an unincorporated association the NHL is composed of member teams and not franchises.)

Would the Samueli’s consider moving the team north or selling? We’d all hate to see it but if the NHL or the Kings picked up the High School Hockey League it might make sense from purely a business standpoint. Revenue sharing wouldn’t be as critical an issue in the NHL with a few more profitable teams.

One fact the good professor may not have considered is that media generated revenue is steadily becoming a greater share of income. The four teams Jewel suggests moving, Anaheim, Phoenix, Tampa Bay and Florida are all located within major media markets.

Technology has made the tv experience better than the live game in a couple of ways. HD provides a much better view on the game within the game, those one on one battles than you don’t see from even the best seats in the house. Add to that the ability of a Brian Hayward to break down the plays, from both a macro and micro view, and for me at least, the tv experience exceeds what I get from sitting in the barn.

Hockey purists will tell you this is heresy. They say you need to see the whole ice to see how plays happen and the camera only follows the puck.  Fact is though, proportional to your Hockey IQ, you already know what is happening outside the view of the camera.

If technology didn’t enhance our appreciation of the game you wouldn’t watch replays on a Jumbotron and teams wouldn’t hire a video-coach.

Among the challenges for businesses such as our Anaheim Ducks is monetizing the media experience.


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