NHL may not bounce back if season lost, expert says
Winnipeg Jets fans give a standing ovation to their team despite a 5-1 loss to the Montreal Canadiens during their inaugural NHL game at the MTS Centre in Winnipeg, Oct. 9, 2011. (The Canadian Press/Jonathan Hayward)
Published Wednesday, September 12, 2012 10:13AM EDT
OTTAWA -- Tim Murphy has already started letting staff go.
The manager of Vancouver's Shark Club, located a slapshot away from the home of the Vancouver Canucks, says without NHL hockey the bar just isn't busy enough.
On a game night the bar fills with 400 thirsty and hungry fans on their way to the game watching highlights on four huge screens, and Murphy has around 30 staff to keep them fed and watered.
But without the prospect of NHL games, Murphy says he has already let three people go and expects further cuts if the season doesn't start on time.
"We do have some other concerts and events, but there's no mistake that hockey is our business here," Murphy said.
As the players and owners head toward what seems to be inevitable job action, the story is the same at sports bars and restaurants across Canada that depend on hockey fans to fill the stools while watching their favourite team do battle.
And while the league has survived strikes, lockouts and even the cancellation of an entire season, Norm O'Reilly, who has studied the finances of sports leagues, says the league owners and players can't take their fans for granted.
O'Reilly, a sports marketing professor at the University of Ottawa, says another cancelled season could hurt not just bars and restaurants, but the league itself, even in cities like Toronto.
While the hard-core fans will always come back and fill the stands, that's not the whole picture, he says.
And as baseball hat, T-shirt and jersey sales as well as sponsorship deals become a larger and larger piece of the revenue pie compared with ticket sales, it is the more casual fans that may never attend a game that can make the difference.
"They may notice a decrease in television rights, and they may notice less following on websites, and they may notice a decrease in merchandise sales and less support of sponsors products," he said of teams if the season is killed.
"And as the NHL becomes more like the NFL and the bigger leagues who are less reliant on gate revenues and more reliant on media and marketing revenues, then those impacts become greater and greater."
The current collective agreement that is set to expire was signed in July 2005.
That deal ended a dispute that saw the league become the first in North America to wipe out an entire season due to a work stoppage.
It was also signed at a time when annual revenues were around $2.1 billion, while today the owners and the players are fighting over around $3.3 billion in annual revenues, an annual growth rate of more than six per cent.
Hockey has managed to continue to grow over the last seven years even as the world economy has struggled in recent years, hit hard by the global economic slowdown and recession in North America.
But O'Reilly noted that last time the new collective agreement was accompanied by rule changes in an effort to make the game faster and higher scoring and in turn more appealing to the casual fan.
And without that added boost, the league may not bounce back from a season-killing lockout the same way.
"Some of the growth that came after has to be attributed to that change in the game," O'Reilly said.
"This time around, everything you read about is much more focused on solely the financial issues."
Still, the NBA saved its season last year after a difficult round of contract talks with a deal that salvaged a 66-game season that began on Christmas Day and culminated in a championship.
That, O'Reilly said, was a far better outcome for the league than the 1994 Major League Baseball season that was aborted by a strike.
"It kind of left a sour taste in everyone's mouth," he said of baseball's cancelled season.
Bruno Delorme, a sports marketing professor at Montreal's McGill University, suggested the NHL could look to try to have a deal in order to save the league's annual Winter Classic set for Jan. 1, 2013 between Detroit and Toronto at the University of Michigan's Michigan Stadium.
"That may be an implicit or tacit deadline for the owners to get a deal done," he said.
"That is a great way to showcase the league in the States. The TV viewership is the highest for that event."
Even if the league and the players are able to find common ground, until then, bars and restaurants near hockey rinks will take the hit without the games to draw people in, but Delorme suggested ticketholders will continue to spend.
"Now because the Leafs aren't playing or the Senators aren't playing, the fans will take those restaurant dollars and spend it in his neighbourhood restaurant or his neighbourhood theatre," he suggested.
"People need to escape from their daily routine."
But for Murphy and his staff at the Shark Club, there is little comfort in the fact their customers are spending their dollars somewhere else.
"Sure we have the B.C. Lions, but they only have a handful of games compared with the NHL," Murphy said.
"Whitecaps soccer has been good for us, but we can't survive on that."