Winnipeg and Quebec City might be able to support an NHL team if they get a second chance but a report by The Conference Board of Canada stopped short of saying it is a sure thing.
"Whether the overall conditions are sufficient to bring back a team to the passionate fans in either city remains debatable," said Mario Lefebvre, director of the Conference Board's Centre for Municipal Studies, and co-author of the report with Glen Hodgson, the board's senior vice-president and chief economist, said in a statement released Tuesday with the report.
The biggest obstacle to a team like the Phoenix Coyotes moving back to Winnipeg, which they left in 1996, according to the report, is the CFL's Winnipeg Blue Bombers. To support both a CFL and NHL team, the authors said a city needs a population of just over 1 million - 800,000 to support a hockey team and 250,000 to support a football team.
With Winnipeg's population of 750,000, Lefebvre said, "fans would face a challenge of supporting both NHL and [CFL]teams." Most fans would not buy full season tickets for both teams, the report said, and would either buy one team's tickets or split their entertainment budget between the two.
Quebec City's biggest problem, the report said, is "a very small corporate presence," as well as the absence of an arena that meets NHL standards. The city is home to only 17 of Canada's 800 largest corporations, fewer than any other Canadian city with an NHL team. Winnipeg has the MTS Centre, which seats 15,000 fans, but the report says it may require more corporate boxes and 2,000 more seats.
The report noted improvements in key factors like the Canadian dollar, which greatly reduced the cost of doing business for Canadian teams after it reached par with the U.S. dollar, and the addition of revenue-sharing and a salary cap in the NHL give both cities a better chance of making this work. But both cities have about 750,000 people and will still be small markets in the NHL.
"Overcoming these hurdles will require a lot of work and dedication from all stakeholders," Lefebvre said.
Mike Smith, who was general manager of the Winnipeg Jets from 1989 to 1994 and is now a consultant to NHL teams, says the biggest issue is simply selling enough tickets to support a team.
"I think it would be good if Winnipeg gets back in the league because it represents more of the rural-ness of the game in North America," he said. "But to be successful the public is going to have to buy the tickets. It can't be corporate-driven.
"They have to average 70, 75 dollars a ticket. The public will have to step up and support it."
Two NHL sources, one a former owner and the other an executive who worked in the Western Conference for many years and is familiar with the Winnipeg market, agreed that selling tickets is the key. Neither wanted to be identified because NHL commissioner Gary Bettman dislikes public discussions of league business.
"Because of the absence of significant TV revenues, hockey is an arena sport," the former owner said. "When you look at whether or not a team can make it, it comes down to one thing - do you have a building and can you fill it, particularly the highest-priced seats? Do you have enough suites to get it to a revenue level that allows you to play the game with the other [teams]"
The NHL executive does not think Winnipeggers will be willing to pay NHL prices for tickets in the long term. While he thinks the city will do a better job of supporting an NHL team than some of the southern U.S. cities, he said ultimately fans in Winnipeg will tire of paying NHL prices.
"It's a wholesale city that wants everything at cost," he said.
On the plus side, Lefebvre and Hodgson said enough factors have improved since Quebec and Winnipeg lost their NHL teams in the mid-1990s that they both have a chance for success, although "a caring, deep-pocketed owner is a prerequisite for both of these markets."
In Winnipeg, True North Sports and Entertainment Ltd., which is owned by Mark Chipman and David Thomson, one of Canada's wealthiest men who also owns The Globe and Mail, is working to bring a team to the MTS Centre. In Québec, Pierre Karl Péladeau, who owns the communications giant Quebecor Inc., and is estimated to be worth nearly $700-million, is prominent in efforts to build a new arena and land an NHL team.
Lefebvre and Hodgson said there are four pillars every professional sports team needs to succeed - market size, high per-capita income, strong corporate presence and a level playing field. By level playing field, the authors mean a strong Canadian dollar and things like a salary cap and revenue sharing.
The authors said the dollar and the NHL's economics are much improved since the Winnipeg Jets and Quebec Nordiques went south in the mid-1990s. So is their market size, since both cities grew by about 100,000 people but neither is quite at the 800,000 the authors say is needed to support an NHL franchise.
Income levels in both cities are favourable. Winnipeg had the fifth-largest per-capita disposable income among Canada's nine largest cities in 2009, while Québec was seventh. While Quebec's corporate presence is modest, Winnipeg is home to the headquarters of 30 of Canada's largest corporations, which puts it ahead of Edmonton and Ottawa.
"We believe that Quebec City and Winnipeg have the right market conditions for another shot at NHL hockey - but not at any price," the authors said in their conclusion.