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Ticket drive means big money for Winnipeg

NHL Commissioner Gary Bettman (L) talks with True North Sports and Entertainment Chairman Mark Chipman as they attend a news conference in Winnipeg, Manitoba, May 31, 2011. Canada reclaimed one of its lost NHL franchises on Tuesday when the Atlanta Thrashers were sold to True North Sports and Entertainment and relocated to Winnipeg, triggering wild celebrations in the Prairie city. REUTERS/Fred Greenslade

Fred Greenslade/Reuters

There's a lot of skepticism out there when it comes to the NHL being back in Winnipeg, with much of it coming from pundits who remember the Jets leaving amid poor attendance and rising salaries 15 years ago.

Even in the face of an incredibly successful season ticket drive last week, with 13,000 packages sold immediately and another 8,000 people on waiting lists, you hear the negative comments.

Here were a couple put out there on Twitter after Saturday's successful ticket drive:

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"Never doubted tickets would sell in year one," wrote Jeff Schultz of the Atlanta Journal-Constitution. "That's not test of a market."

"Money drives the league now; that's a lot of money to sustain in a smaller market with limited corporate base," added Ted Starkey of the Washington Times. "Winnipeg would rank around the 60th market in the United States and Canada with smaller business base. Difficult to sustain."

There are many more examples, including from pundits in this country, but the message is the same: Winnipeg may not be a great choice for the NHL.

I disagree -- and that ticket drive offers a window into why.

The MTS Centre in Winnipeg may seat only 15,015 (another reason given for skepticism) but revenue wise, the new team is going to generate a bundle.

While we know because of the bankruptcy process that the Phoenix Coyotes made only $13.33-million in ticket revenues the year before they went into bankruptcy, the yet to be named Winnipeg franchise would bring in $1.23-million per home game at their $82 average ticket price.

With the dollar basically at par, that means they would make roughly $50-million on regular-season ticket sales alone, $37-million more than Phoenix made in the year before court proceedings made their attendance situation far worse.

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That's the type of gap there is between a really struggling franchise like the Coyotes and what the Return of the Jets has generated in Winnipeg.

Leaguewide gate receipt information isn't widely available, but estimates put Winnipeg in the top six or seven in terms of projected ticket revenue. While the city's smaller building and business community may mean they fall into the middle of the pack in terms of overall revenues, they will still fare far better than many of the league's most troubled markets.

And even if, years down the line, the dollar drops another 20 cents or so, that would only put them to $950,000 a game at 2011-12 ticket prices.

(For a look at some ticket revenue figures that did leak out a few years ago to the Toronto Star, here's a .pdf document with those details. It goes without saying that Winnipeg's $1.2-million per game figure, even four years later, will be very competitive.)

Teams like Atlanta, Columbus, the Islanders and Florida are really struggling in the current NHL climate because their buildings aren't full, their prices are low compared to those at the top and they're making only $20- to $25-million in ticket revenue when the top 13 or 14 teams are at more than $40-million.

There's a huge chunk of those teams' annual losses right there, losses Winnipeg can avoid.

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As an aside, the other main reason for skeptisicm I've seen offered lately is the cost of tickets in Winnipeg, which is definitely substantial given the Jets' average ticket price was just $23.82 when they left town in 1996.

What isn't mentioned, however, is that Oilers fans were paying only $20.68 a game at that point and have since tripled to $60 as of 2009-10. And that's without the premium seating factored in.

Then there's Toronto, where what people are willing to pay has gone from $37.61 a ticket to an absurd $117.49 in those 14 years.

What was paid in Winnipeg when the Jets left, in other words, isn't especially relevant anymore. (Even if they are forced to drop ticket prices by $16 a ticket, they can still hit the $1-million in revenue per game, putting Winnipeg in the top 15 in ticket revenues.)

Coming back to my original point on all this: What really makes Winnipeg a success for the NHL is the fact that there's high demand for tickets and that they canl easily surpass the ticket revenues generated by many other of the league's markets.

While some are choosing to focus on what may happen in the long-term in Winnipeg and if they can be successful, the truth is the NHL has plenty of markets who are in far worse shape in the short term -- nevermind 15 years from now.

While it may be a small market in terms of population, Winnipeg gives the league what will be a stable franchise with solid ownership for the foreseeable future, one that at those ticket prices likely won't even draw revenue sharing in the early going. Down the road, they well may lose money, but it's not going to ever look as grim as some of hockey's current black holes.

With so many clubs facing massive losses right now and few other viable new markets to go to, that's why Winnipeg is a win for the NHL.

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About the Author
Hockey Reporter

James joined The Globe as an editor and reporter in the sports department in 2005 and now covers the NHL and the Toronto Maple Leafs. More

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