Hey there, time traveller!
This article was published 23/12/2011 (1591 days ago), so information in it may no longer be current.
These are not Barry Shenkarow's Winnipeg Jets.
When the first edition of the city's hockey team was uprooted for the Arizona desert in 1996, it wasn't hard for experts to rhyme off the reasons behind the gut-wrenching move. The Jets played in an antiquated building they didn't own, general managers in large markets were able to spend like drunken sailors without a salary cap to rein them in, the Winnipeg economy was in the tank and a Canadian dollar could be traded for a couple of quarters, a dime and a few pennies of U.S. change.
What a difference a decade-and-a-half makes.
Not only have the key macro-economic factors completely turned around for the owners of a professional hockey team in Winnipeg -- the loonie is trading at or around parity with the U.S. greenback and the Winnipeg economy has blossomed, powered by what is widely considered the most diverse business and industrial base in the country -- but the micro-economic factors have completely changed, too.
First, the Jets play in a building owned by True North Sports & Entertainment, the same company that owns and runs the team. Having control over the venue enables True North to put on rock concerts, truck and tractor pulls, Disney On Ice and other events and direct all the profits to a common bottom line.
In effect, the profits from bringing Justin Bieber and Prince to town could pay for the team's third-line centre.
Ownership also enabled True North to sell the naming rights for the building to MTS for a multi-million-dollar sum. (Quick: what was the corporate banner that adorned the old Winnipeg Arena and how much money did it bring in?)
Not only does True North own the concessions that sell premium-priced beer, hotdogs and pizza -- in partnership with Centreplate, which runs the food and beverage operation -- but it owns the Tim Horton's franchises in the MTS Centre, too.
So, the next time you're sipping on your double-double or munching on a box of Timbits at a game, remember your taste buds and stomach are helping True North field your team.
And don't forget the two True North-owned Jets Gear stores, one in the MTS Centre and the other at St. Vital Shopping Centre, that sell jerseys, T-shirts, hats and countless other items bearing a Jets logo. The team gets the profits from all these sales and considering the wall-to-wall traffic in both locations this year, you can bet several more will spring up around town when the right real estate becomes available.
Need more revenue streams? How about fans buying Winnipeg Jets coins and stamps with their Winnipeg Jets-branded MBNA credit cards?
Norva Riddell, senior vice-president of sales and marketing at True North, said every single revenue stream is critical to the Jets' business plan.
"All the partnerships are so integral. Without the community support of the team and the Drive to 13,000, we couldn't make it. Without the corporate support, we couldn't make it. The concessions are huge for us. You need everything," she said.
The "power ring" between the 200 and 300 levels at the MTS Centre is also a great way to help companies get their branding messages across and incorporate them into the game, she said.
"They see real value in the partnership. We've always had corporate support and rink boards but we're doing a better job with it now," she said.
While the extent of the Jets' vertical integration might surprise some Winnipeggers, Mark Chipman, the team's chairman, said every team in the NHL operates in virtually the same manner.
"We're all dependent on revenue streams, concessions, merchandise, whatever it might be. It's common to all NHL teams," he said.
And there are precious few similarities between how True North runs its team and the way former owner Shenkarow, ran his.
"It's night and day. The economics of the league are night and day in two ways. The amount of revenue generated by teams and the broadcast revenue, a mix of national broadcast and regional, has changed dramatically for the league and for teams," he said.
"And there's a far different mechanism for sharing revenue with the players with a cap on salaries. Those things all make the game very different from a financial perspective."
Chipman is quick to add the game itself has changed dramatically, too. The days of waterskiing behind a player carrying the puck up the ice are gone and in its place is a faster, more open, offensive and free-flowing game.
"The game is far more exciting to watch now. You put all those things together and the similarities between now and 1996 are far fewer than the differences."
Shenkarow wasn't available for an interview for this story. But back during his ownership days, he made it abundantly clear that the city's hockey business model needed to change or else the NHL would not be long for Winnipeg. He had a blueprint for what needed to be done but his pleas for a new arena fell on deaf ears and empty pocketbooks.
Chipman said he has been told Jets merchandise is among the top five sellers in the league, a development he said isn't completely unexpected considering it's all new to the market. (The Jets, in fact, are the only other team represented in the retail shops at Toronto's Pearson airport besides a little club you may have heard of called the Maple Leafs.)
The more these sales can be sustained and the more other revenue streams can be found and maximized, the more profitable True North will be.
Jets hold trump card
over black market
JETS jerseys, T-shirts and hats have been flying off retail shelves in Winnipeg but the team's gear is also moving briskly in another red-hot market -- the black market. It's difficult to pin down how many fraudulent jerseys have been bought in Winnipeg, but scan the crowd at Jets games or any public gathering and it's not a stretch to say knock-off merchandise represents a multi-million-dollar shortfall for True North.
The Jets do, however, have one merchandising trump card they're keeping close to the vest. They own the old Jets logos, the ones worn by WHA stars such as Anders Hedberg, Ulf Nilsson, Bobby Hull and Lars-Erik Sjoberg through to their NHL brethren Dave Babych, Dale Hawerchuk, Phil Housley, Bob Essensa, Alexei Zhamnov and Teemu Selanne.
A temporary moratorium has been placed on producing new goods bearing those logos -- a popular rumour is it could be a couple of years -- so True North can firmly establish its new logo and brand in the market.
Considering the love shown to those marks over the past 40 years, can you imagine the sales explosion if -- most observers would say 'when' -- True North unveils them as the third jersey for Ladd, Enstrom, Byfuglien and Pavelec?
But just when a retro push might be launched is anybody's guess, including Mark Chipman's.
"We just haven't had the time to think about any of those things. We've had a lot on our plates for 115 days. Thinking about retro looks and third jerseys, it would have been impossible. We'll turn our attention to that in due course," he said.