Why shouldn't there be another NHL franchise in Canada?

TSN/The Globe and Mail
7/5/2010 1:44:05 PM
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It started with a conversation one day at TSN.

"Where else could you put an NHL team in Canada?" the question was posed. "Everyone has an opinion on it. But what about coming up with a series of stories that spell out the facts?"

And thus was born the mandate for "Why Not Canada?", a six-part series on the viability of additional NHL teams in Canada for TSN, The Globe and Mail.

We had a mandate but no methodology. What do we measure, who do we talk to? Is this even possible?

Grappling with that last question was the hardest part because there is no absolute answer to whether any sports team can survive in a particular market. But that doesn't mean you can't get a pretty good idea by examining the various factors that determine teams coming into being and then whether they become profitable.

We started by looking at the reasons the Quebec Nordiques and Winnipeg Jets packed up and left town in the mid-1990s and what had changed: the Canadian dollar is now near par. The NHL has a salary cap and revenue sharing. Winnipeg has a new building and Quebec City is trying to build one.

But how could we determine whether any of the four most often discussed Canadian markets for NHL hockey - Quebec City, Winnipeg, Hamilton and a second team for the Greater Toronto Area - made sense?

The search for an answer to that question brought us to Norm O'Reilly, a Canadian business professor at Stanford University who specializes in the study of professional sports. Norm has written books on sports sponsorship in Canada and had studied various models that examine the factors that lead to profitability of professional sports teams.

We asked Norm to come up with some criteria that would weigh market-specific factors we should consider. We would look at population, the pace of the local economy, the demographics of the people who live there. We would look at the wealth of a city's citizens and the number of head offices or large businesses there. We would look at whether it had a suitable arena and where that arena is located. And we'd look at potential owners to see whether they had the means and motivation to survive good times as well as bad.

And we would look at what barriers might exist to prevent a particular city from ever getting a team.

We collected data from Statistics Canada. The market research firm Environics Analytics produced raw data on the four markets that gave us indications of everything from corporate presence, to wealth of the population to their affinity for hockey. IMI International conducted market research in Southern Ontario on what a second Toronto team might mean. And we burned out our printer with economic reports and forecasts from the Conference Board of Canada. And then we started listening.

We spoke to fans, ex-players, economists and would-be owners and those on the inside of the NHL. We spoke to competition lawyers, politicians, private businessmen and those from the sports marketing field. We looked at the numbers of existing NHL teams in Canada and tried to forecast what sorts of revenue targets teams in additional markets would have to hit.

We looked at what sort of progress was being made in particular cities towards the goal of making an NHL team real.

We went to Winnipeg, Quebec City and Hamilton, and we talked to people around the GTA.

And then we sat down with NHL commissioner Gary Bettman to talk about what we told him is the most-discussed sports topic in all of Canada.

"I assumed it was the most discussed topic, period," said the NHL commissioner as we began our interview.

All of our data and our interview transcripts went to Norm O'Reilly in California where he was wrapping up his tenure at Stanford and preparing to take a job at the University of Ottawa.

The first part of his scorecard reflects the attractiveness of the market by measuring such things as its size, the pace of the economy, the demographics and the corporate presence.

Then we wanted an overall score that considered the viability of the franchise by examining such factors as the arena situation, the potential owner and whether there were legal or economic barriers that would stop someone from setting up a team.

What you see in our scorecards for each city: the strengths of each market, the weaknesses and what factors might get in the way of an NHL team arriving some day.

It was a fascinating exercise. We hope you enjoy taking it in as much as we did putting it all together.

Watch for more tonight on SPORTSCENTRE, and all this week at tsn.ca/whynotcanada and in the Globe and Mail.

Coming Tuesday: Why Not Winnipeg?

Why Not Canada? (Photo: Grtty Images)


(Photo: Grtty Images)
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