Couldn’t help but notice the bullsh— detector went into overdrive when the Toronto Maple Leafs announced a ticket price hike of 3.5 percent Tuesday.
It wasn’t that the Leafs raised their ticket prices. As a private business that operates in a market economy, the Maple Leafs have every right to extract every dollar out of their consumers they can as long as those people are willing to pay them.
But it was their justification for doing so that rankles, particularly since there seems to be no indication this organization is going to use that extra money to make the product noticeably better in the near future.
This year, the Leafs have a payroll of about $47.6 million, which is roughly $9 million below the salary cap. There’s little reason to believe that at this stage of their rebuilding process, the Leafs will be pushing the upper limit of the salary cap anytime soon. There’s absolutely no reason for them to be a high-payroll team next season, particularly if they’re looking ahead to a time when the salary cap is sure to be reduced. If you’re rebuilding anyway, why would you want to get stuck with big-money, long-term deals if you don’t know how much the cap is going to drop?
Let’s say, for argument’s sake they’re paying $10 million into the NHL’s revenue sharing plan. That puts the Leafs to somewhere in the $58 million range in terms of money spent on players and revenue sharing.
Now, Maple Leaf Sports and Entertainment president Richard Peddie defended the price hike by saying the Leafs aren’t much better off financially now than they were before the lockout. But in the 2003-04 season, their payroll was $62 million, which still means they have a net gain of $4 million over the pre-lockout days. And in that season, the Canadian dollar was trading somewhere between 65 and 76 cents compared to the U.S. dollar, while today it’s at about 80 cents.
Not to continue to beat a dead horse, but remember, we missed a year of hockey four years ago for all of this.
What is different is the Leafs have not been able to maximize their revenues because they haven’t made the playoffs since before the lockout. With total revenues somewhere around $3 million per game in the playoffs, that’s a considerable chunk of change for the Leafs to be losing. So, basically, the fans are being asked to pay more because the team hasn’t been good enough to make the playoffs and gain the revenues from doing so. Remember: Teams don’t pay players during the playoffs, so all the money they make from the post-season goes directly into the vault.
Yeah, it’s bass-ackwards, but this is the Leafs we’re talking about here. There is no point railing about how people should not buy tickets because that’s not going to happen anytime soon. The fact of the matter is the Leafs could probably raise their ticket prices even more and still not alienate their fans enough that they would stop buying.
But it will be interesting to see where all this goes. After this campaign, the Leafs will have not made the playoffs for four consecutive seasons and the prospects of them doing so next year are probably not great. Times are difficult and could get even harder, so it will be interesting to see whether or not the Leafs have reached the threshold for their pricing. There will always be corporate welfare bums who occupy the best seats on somebody else’s money – part of which is picked up by the taxpayer, so don’t tell us teams in Canada don’t get any government help – but in these times it will be intriguing to see whether as many corporate clients will be able to afford the luxury of season tickets.
Already, we hear some of the corporate sponsors are getting a little antsy. In fact, this season’s free pre-season game had nothing to do with giving back to the fans and everything to do with giving Coke, a major team sponsor, more bang for the bucks it was spending in corporate sponsorship.
The guess here is the Leafs will remain recession-proof. They know that, too; otherwise they wouldn’t have raised prices for an inferior product in a bad economy.
Ken Campbell, author of the book Habs Heroes, is a senior writer for The Hockey News and a regular contributor to THN.com. His blog appears Wednesday and Fridays and his column, Campbell’s Cuts, appears Mondays.
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