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Former Manitoba Premier Gary Doer walks down memory lane with Mark Chipman, Chairman of the True North, as they walk through the MTS Centre Wednesday, September 2, 2009 and remember the struggles they faced when they were building the arena in downtown Winnipeg. (JOHN WOODS/John Woods/The Globe and Mail)
Former Manitoba Premier Gary Doer walks down memory lane with Mark Chipman, Chairman of the True North, as they walk through the MTS Centre Wednesday, September 2, 2009 and remember the struggles they faced when they were building the arena in downtown Winnipeg. (JOHN WOODS/John Woods/The Globe and Mail)

Why Not Canada? Part 2

Why not Winnipeg? Add to ...

When the Winnipeg Jets packed up and moved to Phoenix at the end of the 1996 NHL season, it felt like goodbye forever.

The cost of doing business in the NHL was skyrocketing and poor little Winnipeg simply couldn't keep up.

"At that time [the NHL]didn't fit Winnipeg," said Mark Chipman, chairman of True North Sports and Entertainment which owns the six-year-old MTS Centre and the AHL's Manitoba Moose in the city. "It was a remarkable effort and I don't think it was anybody's fault, it just wasn't enough at the time."

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Back then Chipman was one of those local businessmen trying to find a way to save the Jets. When the effort failed, he brought an AHL franchise to Winnipeg. And several years later, he began the process of building a new downtown home for the Moose.

Toronto-based billionaire David Thomson, chairman of Thomson Reuters, became an equity partner in True North through his real estate company, Osmington, Inc. (The Thomson family holding company, Woodbridge, has a 40-per-cent interest in CTVglobemedia, whose properties include The Globe and Mail.)

Today the MTS Centre sits downtown at the corner of Portage Avenue and Donald Street, a shining success both as a hockey and entertainment facility. It books the third-highest number of shows in Canada, behind only the Air Canada Centre in Toronto and the Bell Centre in Montreal.

Winnipeggers have proved a willingness to pay top dollar for entertainment. And market research commissioned by True North indicates they would do the same for NHL hockey, giving the company the confidence to try repatriating the Coyotes recently, and to continue pursuing a franchise.

"We've tested it by using a price that has existed in relative Canadian markets," said Chipman, speaking publicly about the research for the first time. "When we test those average ticket prices, and the suite prices, and the … corporate sponsorship that you need to sell, it hasn't caused any concern or alarm with any or our existing sponsors and prospective ones."

Last May, Winnipeg hockey fans almost had their dream come true before the NHL arranged a last-minute deal with Glendale, Ariz., to keep the Coyotes in Phoenix at least one more season. But the NHL was prepared to direct the team to Winnipeg, sources say, had Glendale not agreed to pick up as much as $25-million (U.S.) in losses next season.

"There's never been any doubt about the passion of fans, people in Winnipeg," NHL commissioner Gary Bettman said. "So it's always been a good hockey market. Finally they have an arena that is up to NHL standards."

The MTS Centre, with 15,015 seats and just 50 luxury boxes, would be the smallest building in the NHL. But Chipman believes it is ideal for Winnipeg, even though it won't be able to match the revenue generation of the league's other buildings. He subscribes to the theory that it is better to have too few seats than too many.

"It's suitable for our market," Chipman said. "I think your building has to fit your market. We've had this discussion with the league. They are very familiar with the size of the facility and have not expressed any concerns about the size. And I think if I have learned one thing in this business over the past 15 years it's that if your supply outstrips your demand, it's a slippery slope. It's a very difficult business to be in."

The bigger question in Winnipeg is whether there is sufficient corporate muscle - and will - to buy the high-end tickets and luxury suites.

According to Statistics Canada, 128 companies have head offices in Winnipeg, slightly less than half Calgary's total. Research firm Environics Analytics reports there are 272 businesses generating more than $20-million in revenue and with more than 100 employees, slightly more than half of Edmonton's total.

"The size of the community is such that you can get a real good sense of what the corporate community's desire and appetite is for a team," Chipman said. "It's not something we have to guess at. I'm confident it's there."

With a smallish building and population of just 741,000, a Winnipeg franchise would likely have to compete at the mid-range of the NHL's player pay scale (about $50-million U.S.). In contrast, the existing six Canadian franchises in Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver all spend close to the maximum, or slightly less than $60-million (U.S.) this coming season.

Further, there would be the inevitable difficulty of attracting players to Winnipeg, a problem that dogged the Jets in the 1990s and plagues Edmonton today.

All of which raises the question of whether the enthusiasm for a team would wane if the team is unable to win consistently, or even sporadically. When the Jets struggled and often missed the playoffs, attendance averaged less than 14,000 a game.

"I think the biggest problem you've got here in Winnipeg is that if you start to put out a product that is not performing to expectations, [fans]start to stay away," said Rob Warren, director of the Stu Clark Centre for Entrepreneurship at the University of Manitoba. "I don't think Winnipeggers are that die-hard."

One thing that has changed since early 1990s is the local economy. Winnipeg's population is growing at roughly three times the rate it was in 1996, and its unemployment rate is down by more than 30 per cent.

"If there is an economy that managed to escape the latest recession, it's the Winnipeg economy," said Mario Lefebvre, director of the Centre for Municipal Studies at the Conference Board of Canada. "It has diversified nicely over the years. So I think we have a solid foundation of a whole sort of industries, including manufacturing. It's not a bad story."

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