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This article was published 10/6/2011 (2265 days ago), so information in it may no longer be current.
A U.S. sports marketing expert who has been involved in more than 2,000 sold-out games thinks the brain trust at True North Sports & Entertainment is "visionary" for its decision to build a 15,000-seat arena.
Jon Spoelstra, a former NBA executive and author of How to Sell the Last Seat In the House -- a book only sold to sports teams at $800 a pop -- said having a team play in a smaller arena is better for fans and players alike.
"I think Winnipeg will have a home-ice advantage more so than other teams because there's going to be 15,000 crazies in there," he said.
Spoelstra said a 15,000-seat arena is the "perfect" size because you are eliminating the truly nosebleed seats while stimulating demand.
"There's an urgency to keep your season tickets. If the team isn't very good (for one year), people will tend to keep their season tickets because once they give them up, they might never see them again," he said.
Of course, nothing is fool-proof and Spoelstra cautioned that smaller-market teams can't do "stupid things" across various parts of the organization because there's little margin for error.
Spoelstra said the season-ticket waiting list of 8,000 people that True North has compiled is the key to the franchise's long-term stability.
"That wait list is gold. If they manage it right, they could sell (the MTS Centre) out for 50 straight years. You never have to go public to sell tickets, it's all off the wait list," he said.
To back up his claims, Spoelstra pointed to Major League Baseball, where every team that has built a new stadium in recent years has downsized from its previous park.
"For arena sports, I don't think bigger is better. Nobody would have the guts to build a 15,000-seat arena on purpose. That would have been the perfect decision," he said.
When told that True North did indeed build the MTS Centre to those specifications with a possible goal of landing an NHL team in the future, he responded, "then they're great visionaries."
He said adding a few thousand seats by raising the roof would likely have a poor return on investment.
"I don't think the nosebleeds add that much to revenue. A lot of times those seats are for group sales and sometimes they're giveaways. If you're able to price a little higher in the lower bowl because it's a smaller building, that comes close to making up the difference by eliminating the nosebleed seats," he said.
Spoelstra has an impeccable pedigree. He said during his time with the Portland Trail Blazers, the team had about 900 sellouts. Then when he moved to New Jersey, where the Nets hadn't had a sellout in seven years, the seats were full "with a bad team."
But perhaps his best work is turning the Dayton Dragons, a Class A baseball club affiliated with the Cincinnati Reds, into the hottest ticket in the minors.
"In the 100-year-history of minor-league baseball, no team had sold out every game all season. We used the same principles that I used in the NBA and in 1999, they sold out their first game. Now they've done it for 12 straight seasons," he said.
Scott Brown, director of corporate communications at True North, said its top two decision makers, Mark Chipman and Jim Ludlow, have read Spoelstra's material. He said True North did extensive research while the MTS Centre was being designed and determined 15,000 was the appropriate size.
"In order to be successful, we needed to create demand for tickets. That's done through scarcity. It's simple economics. You don't want demand to outstrip supply. As soon as there's always a ticket available, your pricing model falls apart," he said.
Brown said people on the waiting list will be eligible for a number of perks. For games where visiting players have little interest in tickets and NHL executives have no reason to attend, people on the waiting list will be notified about the release of those tickets and be able to buy them before they're released to the general public. They will also receive early notification when season-ticket holders opt to not buy their seats for playoff games, he said.