A Toronto financial planner has added his data to the argument that an NHL club won’t work in Phoenix.
The Coyotes rank 29th out of 30 NHL teams – ahead of only the St. Louis Blues – in market viability, according to Tri-Delta Financial CEO Ted Rechtschaffen.
His firm represents an American trying to sell his minority stake in a U.S.-based NHL club. Rechtschaffen crunched numbers to determine where that particular market ranked in the NHL. The club isn’t Phoenix, nor is it relocating, he said.
The NHL, the Coyotes and BlackBerry maker Research In Motion head Jim Balsillie, who has made a US$212.5-million offer to buy the franchise and move it to Hamilton, awaited an Arizona judge’s ruling Thursday on whether Balsillie can do that.
Pulling together five years’ worth of data from ESPN, Forbes, the U.S. Census Bureau and the sports teams marketing bureau, Rechtschaffen concluded the keys for an NHL club’s survival are location and gate revenue.
Without fan support, corporate sponsorship and television rights contracts die out, he said.
“In hockey, gate revenue is key, especially in market where hockey isn’t as core,” Rechtschaffen said Thursday.
“If you have hockey fans that are willing and interested in going to the games and are willing to spend a lot of money going to the games, that tends to be the heartbeat of a city’s long-term viability.”
His conclusions were also that the six Canadian teams were among the NHL’s top 10 in market viability, that only Northeast and upper Midwest markets in the U.S. are able to successfully support a team, and that population is a minor factor in a club’s survival because Calgary (No. 6), Edmonton (No. 10) and Ottawa (No. 7) are more viable than some bigger markets.
The Toronto Maple Leafs are ranked No. 1. Rechtschaffen has first-hand knowledge of the economic power of the interested fan there.
“We have Leafs season tickets. Why? We have them because even though they’re very expensive, we know if we have an opportunity to take a client to a game, they’re very excited,” he explained. “It means a lot to them. If there wasn’t a lot of excitement, we wouldn’t spend the money.
“We wouldn’t consider renting a private box because the return just isn’t there.”
Buffalo, ranked No. 27, is the only club defying Rechtschaffen’s findings. While the Sabres have a fan following and are in a Northeast market, the city’s slumping economy affects the fan’s ability pay for a game ticket, he said.
“If in fact another team does move to Hamilton, it will definitely be the end of the Buffalo,” he said.
While St. Louis hasn’t been known as a financial trouble spot in the NHL, Rechtschaffen that day is coming.
“When I look at the numbers, I think it’s just a matter of time before you hear the St. Louis Blues being one of the financial problems in the NHL,” he said.