Winnipeg Free Press - PRINT EDITION

Ability to host NHL team ‘debatable’

City would face significant challenges, think-tank warns

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Winnipeg has made significant gains in the 15 years since the Winnipeg Jets left town for the Arizona desert but the city still faces some significant challenges if the NHL is going to return and be profitable in the long run.

A new study from the Conference Board of Canada, a national think-tank, found Winnipeg and Quebec City have higher populations and more per capita disposable income than they did in 1996. A league-wide salary cap and a loonie trading above par with the U.S. greenback are two other major developments in the cities' favour, the study says.

But the board said whether the overall conditions are sufficient to support the rebirth of an NHL franchise in Winnipeg is "debatable," in part due to the presence of the CFL's Winnipeg Blue Bombers.

Mario Lefebvre, a Conference Board director and co-author of The Four Market Pillars at Work: The Case of the Quebec Nordiques and Winnipeg Jets, said the average Winnipeg family has approximately $1,000 to spend on leisure each year. If the Jets -- or whatever the team might be called -- returns, the competition for that leisure money will heat up.

"If a family goes to Jets games, will they not go to Bombers games?" he said.

The Conference Board believes cities with two or more professional teams require a higher population to support them compared to cities with just one pro franchise. The Blue Bombers require a population of 250,000, according to the Conference Board's projections, while a population of 800,000 is the minimum required to support an NHL team in Canada.

"It can work (in Winnipeg) but not at any price," he said.

Last month, a Blue Bombers official said the club would welcome the return of an NHL team, confident the market is sufficient for both to thrive.

Lefebvre said even though the Conference Board's analysis of four key economic pillars -- population growth, income growth, a rising dollar and a salary cap -- shows an NHL team would work in Winnipeg, the city faces some additional hurdles because it's a smaller market.

One of his biggest concerns is that the price of a ticket to an NHL game has risen more rapidly over the last 15 years than household income has.

And because the NHL doesn't have a monster television contract like the National Football League does, its success depends on getting butts in the seats.

"Does that mean the average ticket price has to be higher in Winnipeg? If it is, how will Winnipeg afford it? It has to be part of your business plan. How do you compensate for (a smaller building)?" he said.

Jim Kyte, chair of the marketing and management studies department at the Algonquin College School of Business in Ottawa and a former Winnipeg Jet, said he's not worried about the city supporting a team in the first five years. It's later that worries him.

"Will the team still be able to draw the fans? Almost half of the teams don't make the playoffs so you have to have a well-managed team and run a lean organization," said Kite, who consulted on the report.

Kite said the potential ownership tandem of the Chipman family and Canada's richest man, David Thomson, would be a "match made in heaven."

"(The NHL) isn't a millionaire's club anymore, it's a billionaire's club."

Lefebvre said the fact the Chipman family controls the MTS Centre is a big point in Winnipeg's favour. Two years ago, PollStar Magazine, a leading entertainment industry journal, rated it as the third-busiest facility in Canada and the 19th busiest in the world.

"It's possible either the team or the building may run at a loss. If the team doesn't make the playoffs, and we know how great it is to have playoff revenues, you may need the building to support the team (with concerts and other events)," he said.


Glendale shelves bond offering

THE City of Glendale's bond offering is officially off the table.

The controversial offering, which never connected with institutional investors due to the threat of a lawsuit from the Goldwater Institute, has been shelved, according to Moody's.

"We rated that particular bond deal prior to issuance. Those bonds weren't issued so the ratings were withdrawn," said Abbas Qasim, spokesperson for the New York-based rating agency.

The shelving of the bonds doesn't mean Winnipeg should dust off the welcome mat, however. National Hockey League officials are reportedly working to revamp the purchase agreement for the Phoenix Coyotes with Chicago businessman Matthew Hulsizer.

A spokesman for Goldwater, a taxpayer watchdog, said Glendale made no mention of pulling the bonds from the market when the two sides met last week. Le Templar said people in his office found out about it on Moody's website.

He said the move doesn't change Goldwater's stance regarding the financing of the proposed Coyotes' sale.

"The only way for Goldwater to relent is for somebody to come forward with their own money. We would have no grounds to challenge the situation at that point."

Republished from the Winnipeg Free Press print edition May 5, 2011 C8

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