News

The National Hockey League may well be able to deliver the higher revenue it expects this season, but that doesn't mean everything is smooth sailing on the business side of the sport. Far from it.

When the main reason for a modestly improved revenue picture is ticket-price increases, that's already a cause for concern because it means the fan base is not growing. Mix in the fact that too many teams play to row upon row of empty seats, that TV ratings are falling and that a number of U.S. clubs are still struggling to capture a meaningful share of the lucrative corporate market (which is the key to their survival), and you have a recipe guaranteed to produce serious headaches in coming years.

"I don't see any indications that hockey's about to take off," prominent sports economist Andrew Zimbalist said. "Everybody in the industry is disappointed that the second year after the lockout, attendance hasn't gone up."

Actually, attendance has held up reasonably well. In the first two months, it's down about 1 per cent, which was predictable without the excitement, heavy promotions, lower prices and giveaways designed to lure fans back last year after the lockout that wiped out the 2004-05 season.

Also, as NHL commissioner Gary Bettman has said, October and November tend to be the league's weakest months, because of competition from the baseball playoffs and pro and college football.

But it has be worrisome for a league that depends heavily on gate revenues that the reported attendance in many arenas on many nights is considerably higher than the number of bodies actually in the seats. Each empty seat is a lost opportunity to peddle concessions and, more important, to win over a fan.

And in any case, as Zimbalist noted, operators were not expecting attendance to fall off, even slightly. They are looking for "incremental improvement each year. They obviously haven't done that. That suggests that's there's not really an upward trend that we can look forward to."

Just as troubling is the drop in TV ratings in most U.S. markets from their already minuscule levels, which suggests the sport has yet to gain any traction with non-core fans.

Higher ticket prices in 25 of the 30 NHL markets were only possible in the wake of last season's deep discounts, and the cost increases are largely being absorbed by corporate customers. But it's not the smartest of business moves, considering that the league held out the promise of lower prices as one of the consumer benefits of getting its salary costs under control.

The average price of an NHL ducat has climbed 3.7 per cent. But it is an exorbitant 29.1 per cent higher in Florida Panthers country, where the team isn't exactly a crowd magnet to begin with, and a ridiculous 45 per cent more in Carolina, whose brain trust must think that one Stanley Cup victory was enough to convert the state's fickle, basketball-loving sports fans to puck aficionados.

Sports that face little competition for the entertainment dollar or have enormous demand for their product can afford to jack up ticket charges. Those that have trouble putting people in the seats cannot.

Robert Tuchman runs a company in New York that specializes in catering to the sports interests of well-heeled corporations and individuals. Rarely does hockey figure into his plans.

"In our business, hockey definitely rates behind the NFL, MLB and even the NBA as far as corporate interest is concerned," said Tuchman, president of TSE Sports & Entertainment, which puts thousands of executives in luxury boxes at major sporting events. "There is a big gap."

To their credit, some teams, such as the previously struggling Buffalo Sabres, have attracted more revenue from local sponsors, arena advertisers and patrons of luxury boxes. It also helps immeasurably to improve the product, as the Sabres and New York Rangers have discovered. "There's clearly not one obvious pot of gold that they've found at the end of some rainbow," said Paul Swangard, managing director of the University of Oregon's Warsaw Sports Marketing Center.

bmilner@globeandmail.com