Wednesday, June 16, 2010

NHL Gate Revenues

The National Hockey League is a gate-driven sport. That is, most of its revenue comes from ticket sales and whatever they can sell you inside the arena. Other sports, like the National Football League, rely more heavily on broadcasting fees and the like. Though, of course, they still make a good chunk of change on tickets.

Attendance figures are often used to compare how much local support a team has. But is this an accurate assessment? According to this site, the average ticket for a Toronto Maple Leafs game is $117.49, compared to $35.66 for a ticket in Dallas. Toronto sells out the Air Canada Centre, while the Dallas Stars have averaged 17,215 in attendance, according to the Globe & Mail.

So what does all this mean? The Montreal Canadiens have the biggest arena in the NHL, but their ticket prices average $72.18. How does their revenue compare to Toronto? And the poor Phoenix Coyotes averaged 11,989 people per game, at an average price of $37.45 per ticket.

What I've done is, based on these figures, estimated the total gate revenue for each team in the NHL over 41 home games. In other words, the chart below shows how much money each team made from ticket sales alone. It paints a picture that attendance figures cannot.The Toronto Maple Leafs made an estimated $92.8 million in ticket sales over the regular season, almost $30 million more than the second-best Montreal Canadiens. Incredibly, that is more than five times as much revenue as the Phoenix Coyotes earned.

The Montreal Canadiens made $63.0 million, still about $15 million more than the Stanley Cup finalist, Philadelphia Flyers. And all six Canadian franchises find themselves in the top ten, the Ottawa Senators finishing with $39.5 million in ticket sales.

Edmonton and Calgary, both relatively small markets, had $41.2 million and $47.2 million in ticket sales, respectively.

That compares pretty favourably to $38.9 million in Pittsburgh, where Sidney Crosby plays. Or $33.5 million in Alex Ovechkin's Washington. Or the $33.5 million in the huge Los Angeles market.

You look at the bottom of the list, and see the usual suspects: Phoenix, Tampa Bay, Carolina, Dallas, the New York Islanders, Atlanta. It's no wonder that these teams are often discussed as potential relocation candidates, and it is a strong condemnation of Gary Bettman's Sun Belt strategy.

It is interesting to note that of all the teams that have been added to the league since 1991, only Ottawa and Minnesota are in the top 15 in ticket sales.

A lot of teams break even by making the playoffs. The amount of money the Montreal Canadians must have made in their three-round run is mind-boggling. Philadelphia and Chicago, too, must have made a lot.

But not every team makes the playoffs. Toronto missed out, but still made $92.8 million in ticket sales - likely more than any other team made in both the regular season and playoffs, with the exception of Montreal.

But Phoenix, with only $18.4 in gate revenue, only played three games in Phoenix. Tampa Bay, Carolina, Dallas, the Islanders, Atlanta, Anaheim, and St. Louis, all teams that made less than $30 million in ticket sales during the regular season, missed out on the playoffs. That means a lot of red ink.

Consider that the salary cap for next season is projected to be about $59 million. That means that every team except Montreal and Toronto needs to earn money through concessions, merchandising, and broadcasting in order to make up the difference.

Now, a lot of money is made inside the arena - as attested by the fact that the $59 million salary cap represents a little more than half of the average team revenue. But we can safely assume that the amount of non-ticket earnings of each team is roughly proportional to ticket sales.

What does this mean for the possible return of hockey to Winnipeg and Quebec? Both of those cities are smaller markets than Edmonton, Calgary, or Ottawa. But let's assume their ticket prices are just a little lower than Ottawa's, the cheapest NHL ticket in Canada.

If Winnipeg manages to sell-out its 15,015-seat MTS Centre, that means $32.0 million in revenue, or 16th in the league. That puts them ahead of franchises like San Jose, New Jersey, St. Louis, and Buffalo.

In Quebec, where the main group pushing for the building of a new arena estimates it will seat 20,014 people, that would equate to gate revenues of $42.7 million, or 8th in the league, putting them ahead of franchises like Edmonton, Chicago, Ottawa, Boston, and Detroit.


  1. Interesting information Eric. The players are paid a set amount for each round of the playoffs whether they play 4 games ot 7 games so long series are an owner's dream. Imagine if the Leafs went two or three rounds in the playoffs how much extra revenue that would generate. If onlt Burke hadn't traded two first round picks and a second round pick for Phil Kessell. Long suffering Leaf here.

  2. As an ex-Winnipeg Jet fan I don't like the way the numbers play out. I don't think that Winnipeg is very viable. They are better than a lot of un-viable US franchises but that is a small consolation.

    As for the Quebec franchise, Is selling out 20,000 a night realistic? They sure did not make as big a fuss as Winnipeg when the Nordiques left. Is the economic climate in and around Quebec as strong as Edmonton/Calgary? Is that why they vote CPC?

    If there was a Winnipeg or Quebec team added they would become my second favorite team (I lived in Calgary for the 2004 playoff run).

    1. In the 80's the Nordiques averaged about 15k (attendance) per game. I was an avid stats kid and always checked attendance of most of the teams. I remembered this because it was odd that the Nordiques could still fill an arena and stink so bad.

  3. I think that if Ottawa can sell 18,000+ tickets a night, Quebec should be able to. The two cities have a lot of similarities. And they have certainly done a good job of selling tickets for Remparts games, their junior team.

    Imagine the first Quebec-Montreal game - it would be crazy!

    As for the economy, Quebec City is doing very well.

  4. As a native of Winnipeg, Manitoba no one here has any sympathy for the Phoenix Coyotes.

    It was a stupid idea to even move our Jets there in the first place.

    I can also say with almost 100% certainty that Gary Bettman is despised in Winnipeg.

    Apparently the deal to keep the Coyotes in Phoenix is falling apart, and there is speculation that Thompson, and Chipman have put in a solid bid for the Coyotes with the intent of moving them back to Winnipeg.

    We do have a new arena downtown, but the only drawback is that it only seats 15,000.

    The economy in Manitoba, is also in good shape, so I don't think there would be any problem in selling out the arena for every game. Especially since Winnipeg, has been through the trauma of losing their team. People here will do everything in their power to make sure it doesn't happen again.

    It sure is poetic justice if Phoenix does return, to where it should have remained all along.

    To have Gary Bettman's US, and southern strategy blow up in his face is just great.

    If the Coyotes do come back, at the first game in Winnipeg, I would recommend to Bettman to keep away, because I am sure the fans will pelt him with garbage the minute they see him.

  5. A refreshing change of topic Eric, very much appreciated! Do you think Hamilton could sustain a team? My guess is their numbers would be similar to Ottawa - but then again, they may get a boost by being able to sell their tickets at an even higher price if they can put a product on the ice that performs better than the current TML product!

    Earl, as a Leaf fan myself, I know your pain.

  6. Not sure what to add. Interesting stuff. All of the Canadian teams have relatively strong (or great) ticket figures. Even some successful sunbelt teams do not.

  7. Michael,

    I imagine Hamilton would be able to charge more than Ottawa or other markets, because of how expensive tickets are to Leaf games. So, let's assume they average $60 per ticket, and sell out Copps Colliseum's 17,383 seats. That equates to $42.8 million per year, which would put Hamilton at eighth.

    I'm sure Hamilton could support a team. But it will be awhile before it becomes a reality. Balsillie burned a lot of bridges, and the Leafs are an obstacle to putting another team there.

    49 Steps,

    If the deal had fallen apart in Phoenix, Winnipeg would've gotten the team. The Thomson group was already in place. But Glendale agreed to cover the Coyotes' losses up to $25 million for the up-coming season, which means that, at least for 2010-2011, the Coyotes will stay in Arizona.

    But if Ice Edge doesn't manage to purchase the team, we can expect the Coyotes to play in Winnipeg in 2011-2012.

  8. Think of it this way, if Winnipeg sold only 2/3'rds of its small area, thus around 10k per game, they'd still be getting more revenue than Phoenix would from the gate (around $20 mil). If they used economics 101 and jumped the price of the main tickets thus getting an average closer to Montreal & Toronto than Ottawa then you could be looking at $35-40 million and a top 10 in raw revenue situation. Quebec City would land in the same boat, 15k = $30k in revenue even with 5k empty seats.

    Given the NHL is a gate driven league and the Canadian dollar is only climbing I have to think a team in Winnipeg & Quebec City is inevitable. Nice that Winnipeg could get the same franchise back but QC will have to take a different one than their old one back as Colorado has shown potential before so even with the low gate I suspect they will come back.

  9. One of the main reasons that the NFL relies on broadcasting revenue rather than gate is the 16 game season. Each team only hosts 8 games a year (plus the post-season). Compare that to hockey, where each team hosts 41 games (or baseball, where each team hosts 81 games)

  10. Colorado's situation is similar (but not identical) to Chicago's. The market is fine, but susceptible to bad play (though Colorado did make the playoffs, most had them dead-last at the beginning of the season).

    If Quebec does get a team, I'm sure they'll treat it like Ottawa tries to do with their team - a continuation of the original franchise.

  11. Michael both Buffalo and Toronto are opposed to a team in Hamilton and under existing NHL rules the new owners of a Hamilton franchise would be required to make a one time of up to $100,000,000 to compensate the Leafs and Sabres for there lose of fan base. The Sabres would suffer more than the Leafs. Good luck getting a team in Hamilton although I see no reason why there shouldn't be one.

  12. How does Toronto, arguably one of the worst teams in the league, get away with demanding such high ticket prices ????

  13. What does this have to do with parliament?

  14. Population GTA (2006): 5,555,912

    Plus more around that. And Canada has hockey fans.... as opposed to the southern US.

    You don't need a very big percentage of that to fill a 30,000 seat arena.

    Supply and Demand. Even low demand (in a sufficiently large population) from a losing team still exceeds the limited supply they have.

  15. Wealthy interest as well. You can't overlook the amount of money that people can throw around for season tickets or boxes for themselves or their guests. It can be a corporate thing.

  16. It's a bit harsh to measure the "Sun Belt" strategy by ticket revenue. Arguably, it wasn't really a strategy at all but a series of separate events linked only by geography.

    First, there were owners losing money and franchise value who moved to potentially better markets (MIN-> SJ and DAL; WIN->PHO; QC-> COL; HFD->CAR). Arguably, all except the WIN/PHO move are better off as a result. Yes, those franchises still aren't all the healthiest, but they used to be the absolute worst off, and only PHO has stayed there.

    The second element was two targeted expansions to get two big media players to buy into the NHL: Blockbuster with FLO and ABC/Disney with ANA. A worthwhile risk if you want to get that big TV contract, it just didn't work out.

    There were also a few misguided expansions (TB; NSH; ATL) mostly because new owners were willing to pay very high franchise fees. But I don't think you can just say the new southern teams was just one grand failed experiment by G. Bettman.

  17. Thanks for the data.

    I note that for the top five teams, four are Canadian.

    All six Canadian teams are in the top ten.

    This really speaks to all the Canadian teams having the money needed to succeed. They also have a lot more broadcast $$$$$ as tv and radio compete to broadcast the games in Canada and in much of the US they have to give them away.

    The NHL should not only consider a team in Winnipeg and Quebec again, but also Hamilton and look at a second team in Montreal, Toronto (in Scarberia) and Vancouver (Surrey)

    The NHL would be much better off with ten to 12 Canadian teams

  18. Bernard,
    A 2nd team in Montreal wouldn't fly. The last time Montreal had 2 teams was 80 years ago. That was when anglos and francos supported different teams, but those days aren't even memories anymore, they're history book material (My 91-year-old aunt may be the last person alive that watched the Maroons play the Habs in the Forum).

    Maybe even thirty years ago, you could have looked into it. But now, it's unthinkable. Nobody, but nobody in Montreal supports the Senators, even though they're only a 2-hour drive away.

    It's different in southern Ontario, where the Leafs, Wings and Sabres all have supporters. It's also different in Quebec City-- everyone watches the Canadiens but would love to have their own team back. I'm not saying Torontonians aren't just as obsessed with hockey as Montrealers, I'm just saying that for some cultural reason I can't quite explain, it's unthinkable to have a second Montreal team (as much fan as it would be to go to a Maroons game with my aunt).

  19. You are one the right track here, but I am not sure where you got your stats for average ticket prices. Your average ticket prices that you stated are extremely low. IE: Toronto's average ticket prices are $227.89 not $117.49(2010 figures) the Phoenix Coyotes average price is approx $41.62. If Winnipeg were to sell all 15,015 seats at an average of approx $110.86 based on Edmonton's average ticket price. (The NHL's closest small market team.) it would pull in approx 60 million a year on ticket sales alone. as opposed to Phoenix's 20 million. Basic math shows Winnipeg is much more viable than Phoenix will ever be.

  20. well well well people, winnipeg, the smallest market in the nhl just sold out it's arena for 5 years for a team that doesn't even have a name. taking in over 54 million dollars in 4 days placing it 3rd in the NHL behind Toronto and Montreal for the next 5 yrs. eat that suckas
    Never underestimate anyone or anything. that's 54 million dollars on gate rev alone before even one beer is poured or any tv/advertising revenue. now back off people and take care of your own back yards before putting down ours.

  21. As far as I'm concerned Anon it's a fabulous performance from Winnipeg fans.

    Sort of gives the lie to all the naysayers, eh?

  22. sir_steveoh

    The MTC CENTRE being a very busy place, and achieving 13,000 NHL season ticket sales, 8000 more on a wait list, sellouts of the first merchandize sold in mere hours, waiting lists for Jerseys, pure excitement from local business, I know the Jets will be in the "black" for at least the next 4 or 5 seasons and onward.

    Winnipeg loves hockey, and Winnipeggers spend money on going out, not on new cars, and big homes.

    Easily the team has made already $24.4 million on this years seats, and will make another $2.2 million on the remaining cheap seats, as well another $2.1M for luxury boxes. $28.7 million just a bit better then Atlanta, but since this is the most profitable arena in the NHL they will have a good operating budget.

    MTS CENTRE was built for only $138M, and is always busy with events, they will make small but heathy profits from NHL seats alone, never mind the $15-$25 million more from naming rights of building, advertising, T.V. rights, and merchandize sales.



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