What's the appeal of moving west?

[Tommy Hawk]

Texas stars will be fine. The questions I have is how are the California ahl teams going to survive long term. First couple of years will be a novelty. These team will have rents to pay and a expensive travel to pay for. How many fans will they need to average and at what ticket price?? I looked up the Ontario reign and those tickets are pricy for echl hockey. And Bakersfield and Stockton will both need to boost attendance to survive the ahl expenses. It will be interesting for sure!!!!

The numbers for Abbotsford are public record. I think the travel costs were a couple of mil for the entire season. That's a third line center. Think of it like this, if the NHL team costs with the western movement increase by $3 mil over their current costs the the organization as a whole needs to receive benefits greater than $3 mil in order for them to economically justify the move.

The funny part of a cost benefit analysis is that the benefit can include intangible benefits such as a lower cap hit throughout the season for call-ups which may result in the ability to trade for a higher salary player at the deadline in order to make a playoff push. If they are able to make that trade and it gets them to the playoffs, even if they lose in the first round, the benefit is millions of dloors in playoff revenue which would also increase the likelihood of attracting and/or retaining players.

What value do you put on that? $10 mil? $20 mil? So if it is $12 mil of intangible benefits then the economic justification is there to move the teams.

 

[HansH]

One other financial aspect that I think some people are missing/ignoring involves one more player in the relationship between the team and the market.

That is -- the arena manager(s). Take the LA Kings for example. Well, more properly, take the owners of the LA Kings -- Anschutz Entertainment Group (AEG).

AEG owns MANY subsidiaries, of which the NHL Kings are only one. They also own AEG Live, who are in the arena management business -- I believe they manage the Ontario arena for the city, as well as AEG (or the Kings, I'm not sure exactly which) owning the Reign. So, they're getting the revenue streams for the ARENA in addition to the direct streams to the TEAM, which makes the prospect of a hockey tenant that much more enticing to the parent AEG.

Now, take a look at Manchester -- AEG does NOT have the arena management contract for the arena there -- their competitors SMG have that contract. So, because the Monarchs have a lease, AEG is paying their competitors to play there. Since they are not likely to be able to displace SMG from the arena management contract there, the Monarchs are likely to make MORE money for AEG if they are playing in an AEG-managed facility, EVEN IF THE ATTENDANCE AT THE AEG FACILITY IS LESS THAN THE ATTENDANCE AT THE COMPETITORS FACILITY. (This is the important part -- it also applies to potentially offsetting the increased costs to the _team_ for travel by increasing the revenue to the parent).

Now, does that mean every conglomerate that owns a team and an arena management company will place their teams only in arenas they manage? No -- that's not possible in the complicated current world. But it is another dimension to the complicated decisionmaking process.

In other words, no, it is not ALL about the salary cap. You may believe that may be the PRIMARY motivator in some cases, and in some cases you may be right. But that's oversimplification if you ignore all the other economic AND hockey forces.

JMO, of course.

 

[Tommy Hawk]

One other financial aspect that I think some people are missing/ignoring involves one more player in the relationship between the team and the market.

That is -- the arena manager(s). Take the LA Kings for example. Well, more properly, take the owners of the LA Kings -- Anschutz Entertainment Group (AEG).

AEG owns MANY subsidiaries, of which the NHL Kings are only one. They also own AEG Live, who are in the arena management business -- I believe they manage the Ontario arena for the city, as well as AEG (or the Kings, I'm not sure exactly which) owning the Reign. So, they're getting the revenue streams for the ARENA in addition to the direct streams to the TEAM, which makes the prospect of a hockey tenant that much more enticing to the parent AEG.

Now, take a look at Manchester -- AEG does NOT have the arena management contract for the arena there -- their competitors SMG have that contract. So, because the Monarchs have a lease, AEG is paying their competitors to play there. Since they are not likely to be able to displace SMG from the arena management contract there, the Monarchs are likely to make MORE money for AEG if they are playing in an AEG-managed facility, EVEN IF THE ATTENDANCE AT THE AEG FACILITY IS LESS THAN THE ATTENDANCE AT THE COMPETITORS FACILITY. (This is the important part -- it also applies to potentially offsetting the increased costs to the _team_ for travel by increasing the revenue to the parent).

Now, does that mean every conglomerate that owns a team and an arena management company will place their teams only in arenas they manage? No -- that's not possible in the complicated current world. But it is another dimension to the complicated decision making process.

In other words, no, it is not ALL about the salary cap. You may believe that may be the PRIMARY motivator in some cases, and in some cases you may be right. But that's oversimplification if you ignore all the other economic AND hockey forces.

JMO, of course.

Great point! It is always more beneficial to move money from one pocket to the other than it is to move it outside the organization.

 

[RFA]

And why it will be unlikely that Albany goes without the AHL. It's in the county's contract with SMG that there will be an AHL tenant. If not, SMG will have to re-negotiate, obviously to the county's favor. In this case (similar to basically every other case) the announced attendance really means nothing. Lose some money, or lose a lot more?

I don't think anyone who listens to any gossip in Glens Falls would be surprised in MSG takes part in the bidding for the GFCC next week, either. Same concept.

 

[GareFan18]

One other financial aspect that I think some people are missing/ignoring involves one more player in the relationship between the team and the market.

That is -- the arena manager(s). Take the LA Kings for example. Well, more properly, take the owners of the LA Kings -- Anschutz Entertainment Group (AEG).

AEG owns MANY subsidiaries, of which the NHL Kings are only one. They also own AEG Live, who are in the arena management business -- I believe they manage the Ontario arena for the city, as well as AEG (or the Kings, I'm not sure exactly which) owning the Reign. So, they're getting the revenue streams for the ARENA in addition to the direct streams to the TEAM, which makes the prospect of a hockey tenant that much more enticing to the parent AEG.

Now, take a look at Manchester -- AEG does NOT have the arena management contract for the arena there -- their competitors SMG have that contract. So, because the Monarchs have a lease, AEG is paying their competitors to play there. Since they are not likely to be able to displace SMG from the arena management contract there, the Monarchs are likely to make MORE money for AEG if they are playing in an AEG-managed facility, EVEN IF THE ATTENDANCE AT THE AEG FACILITY IS LESS THAN THE ATTENDANCE AT THE COMPETITORS FACILITY. (This is the important part -- it also applies to potentially offsetting the increased costs to the _team_ for travel by increasing the revenue to the parent).

Now, does that mean every conglomerate that owns a team and an arena management company will place their teams only in arenas they manage? No -- that's not possible in the complicated current world. But it is another dimension to the complicated decisionmaking process.

In other words, no, it is not ALL about the salary cap. You may believe that may be the PRIMARY motivator in some cases, and in some cases you may be right. But that's oversimplification if you ignore all the other economic AND hockey forces.

JMO, of course.

Excellent point. Thank you! I wish more people would get this part of the equation.

This is also one of the reasons why Sprint Center (managed by AEG) will never have an NHL team. Most NHL owners want to own and operate the arena in which they play, so they control hockey and non-hockey related revenue (Boston, Toronto, Washington, Vancouver, etc.) Why would a potential owner want to put a team in an arena managed by the AEG (de facto LA Kings)?

 

[Clinton Comets EHL]

Texas stars will be fine. The questions I have is how are the California ahl teams going to survive long term. First couple of years will be a novelty. These team will have rents to pay and a expensive travel to pay for. How many fans will they need to average and at what ticket price?? I looked up the Ontario reign and those tickets are pricy for echl hockey. And Bakersfield and Stockton will both need to boost attendance to survive the ahl expenses. It will be interesting for sure!!!!

Any ticket over $10.00 is expensive for that brand of hockey. Like watching practice.

 

[Hoodaha]

Originally Posted by go comets View Post

Texas stars will be fine. The questions I have is how are the California ahl teams going to survive long term. First couple of years will be a novelty. These team will have rents to pay and a expensive travel to pay for. How many fans will they need to average and at what ticket price?? I looked up the Ontario reign and those tickets are pricy for echl hockey. And Bakersfield and Stockton will both need to boost attendance to survive the ahl expenses. It will be interesting for sure!!!!

California ECHL ticket prices really aren't that far off from the costs in other AHL barns. AHL finances are a lot different than ECHL because the NHL club pays for a lot of the players salaries and insurance (meaning that the contract is with the NHL club, not that AHL team). Travel has always been an issue in the West, but if there really are 5 teams making the move, it's not really like travel costs are going up all that much. The teams already fly to Idaho, Utah, Alaska, and Colorado...is it really all that much more expensive to fly to Austin, San Antonio, etc? They will just have a VERY division-heavy schedule.

 

[go comets]

Just read a article that claims both arizona and Colorado are moving their ahl teams next yr. So it looks like 6 teams are moving west for next season.

 

[Clinton Comets EHL]

California ECHL ticket prices really aren't that far off from the costs in other AHL barns. AHL finances are a lot different than ECHL because the NHL club pays for a lot of the players salaries and insurance (meaning that the contract is with the NHL club, not that AHL team). Travel has always been an issue in the West, but if there really are 5 teams making the move, it's not really like travel costs are going up all that much. The teams already fly to Idaho, Utah, Alaska, and Colorado...is it really all that much more expensive to fly to Austin, San Antonio, etc? They will just have a VERY division-heavy schedule.

If you're flying instead of bussing, it is much more expensive.

 

[Hoodaha]

If you're flying instead of bussing, it is much more expensive.

As I said before, the Western ECHL teams fly regularly already. It won't be a new hit to their finances. There's nowhere in the AHL that's more expensive to fly to than Alaska, which the Western ECHL teams have been flying to since the WCHL.

 

[Clinton Comets EHL]

Just read a article that claims both arizona and Colorado are moving their ahl teams next yr. So it looks like 6 teams are moving west for next season.

NO way

 

[Hoodaha]

NO way

I saw that article, I have trouble believing failed CHL franchises will be replaced with AHL. Stong ECHL franchises, sure, but Denver and the Arizona CHL teams? Crazy.

 

[go comets]

I saw that article, I have trouble believing failed CHL franchises will be replaced with AHL. Stong ECHL franchises, sure, but Denver and the Arizona CHL teams? Crazy.

That's what I thought. Honestly I think the only western echl city that could support ahl hockey is Ontario. Stockton and Bakersfield will need to draw way more their current numbers to survive.... This is going to be interesting.....

 

[Tommy Hawk]

As I said before, the Western ECHL teams fly regularly already. It won't be a new hit to their finances. There's nowhere in the AHL that's more expensive to fly to than Alaska, which the Western ECHL teams have been flying to since the WCHL.

Try flying into Charlotte..... Dang expensive. Also, longer distance doesn't equate to higher prices. I can fly to Albuquerque for less that I can fly to Santa Fe. I can fly to NYC for less than I can to Cincy.

 

[RFA]

St. John's is comparable to Anchorage.

 

[Rumblick]

Just read a article that claims both arizona and Colorado are moving their ahl teams next yr. So it looks like 6 teams are moving west for next season.

Link to the article?

Name of the website?

Anything?

 

[CAF1837]

Link to the article?

Name of the website?

Anything?

I'm guessing it's this one that has been going around the last 48 hours...

http://www.howlings.net/2014/08/21/cantlons-corner-how-the-west-was-built/

 

[wildcat48]

Link to the article?

Name of the website?

Anything?

Just look away.... It's a train wreck of an article.

 

[go comets]

Just look away.... It's a train wreck of an article.

That article is just like a car accident... You can't help but look... But I can't see ahl teams being successful in marginal markets, and competing with the weather for fans........

 

[BGIGZ]

One other financial aspect that I think some people are missing/ignoring involves one more player in the relationship between the team and the market.

That is -- the arena manager(s). Take the LA Kings for example. Well, more properly, take the owners of the LA Kings -- Anschutz Entertainment Group (AEG).

AEG owns MANY subsidiaries, of which the NHL Kings are only one. They also own AEG Live, who are in the arena management business -- I believe they manage the Ontario arena for the city, as well as AEG (or the Kings, I'm not sure exactly which) owning the Reign. So, they're getting the revenue streams for the ARENA in addition to the direct streams to the TEAM, which makes the prospect of a hockey tenant that much more enticing to the parent AEG.

Now, take a look at Manchester -- AEG does NOT have the arena management contract for the arena there -- their competitors SMG have that contract. So, because the Monarchs have a lease, AEG is paying their competitors to play there. Since they are not likely to be able to displace SMG from the arena management contract there, the Monarchs are likely to make MORE money for AEG if they are playing in an AEG-managed facility, EVEN IF THE ATTENDANCE AT THE AEG FACILITY IS LESS THAN THE ATTENDANCE AT THE COMPETITORS FACILITY. (This is the important part -- it also applies to potentially offsetting the increased costs to the _team_ for travel by increasing the revenue to the parent).

Now, does that mean every conglomerate that owns a team and an arena management company will place their teams only in arenas they manage? No -- that's not possible in the complicated current world. But it is another dimension to the complicated decisionmaking process.

In other words, no, it is not ALL about the salary cap. You may believe that may be the PRIMARY motivator in some cases, and in some cases you may be right. But that's oversimplification if you ignore all the other economic AND hockey forces.

JMO, of course.

Never even thought of that before. Thanks!