NLL teams as additional revenue sources for NHL owners

Discussion in 'Fugu's Business of Hockey Forum' started by famicommander, Sep 4, 2011.

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  1. famicommander

    famicommander Registered User

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    If you were to look down the list of National Lacrosse League teams, you'd find that Colorado and Buffalo are by far the two most successful teams at the gate. The two teams combined to draw roughly 16,500 fans per game between them. The other eight teams in the league last season combined to average under half that amount, at just a hare above 8,000 fans per game.

    Why is this relevant to the NHL? Because both teams share their ownership with NHL teams. The Buffalo Bandits were recently purchased by Terry Pegula when he bought the Sabres and the Colorado Mammoth are owned by the Kroenke family (owners of the Colorado Avalanche NHL, Denver Nuggets NBA, Colorado Rapids MLS, St. Louis Rams NFL, FC Arsenal).

    Most agree that the reason the two NHL-affiliated teams do the best is because they have access to the resources of the larger teams. They have more pull with advertisers, they have more marketing money, they have the majority of their games on live television... but most importantly, they get to keep their concessions/parking revenue, and they don't have to worry about expensive arena leases.

    I think there are many NHL teams that could benefit from running an NLL franchise. There is very little risk involved as the costs associated with running an NLL team are minuscule compared to the NHL.

    The Calgary Flames seem to agree, as they saved the NLL's Calgary Roughnecks from folding earlier this year by purchasing the team outright.

    According to the Roughnecks' former owner, it cost him 2-3 million dollars annually to run the team. And again, he had no access to parking or concession revenue nor did he have one iota of the credibility that the Calgary Flames brand has.

    The Flames have said they believe 17,000 fans per game is a possibility for the Roughnecks in their first year of new ownership, which would be a jump of nearly 7,000 fans per game over last season.

    Going the other direction, the NLL's Boston Blazers recently announced that they are suspending operations for the 2012 season in hopes of returning in 2013. They specifically cited the cost of the TD Garden as the reason. Rumors are floating in the NLL community that the Blazers were paying as much as 60,000 dollars per game in rent alone and were not being given access to any parking or concessions. The Blazers ownership is already talking with other arenas in the Boston area as well as ones in Connecticut, Maine, and New Hampshire for possible destinations for the team.

    I think the Bruins missed an easy opportunity here. They are riding high off their recent Stanley Cup victory, and it'd be a good PR move to come to the aid of a local franchise that is struggling not due to fan support (the Blazers averaged nearly 9,000 fans last season which was a 5% increase over the previous year), but due to the Bruins and the TD Garden (who share the same parent company) squeezing them out.

    Does anyone honestly think that the Bruins couldn't turn that ship around and run it at a healthy profit much like the Flames are expected to do in Calgary?

    But with the Blazers being out of side, out of mind for the season there are a few specific teams and markets that the NHL should look at:

    Edmonton Rush - Founded in 2005, the Rush share a home arena with the Oilers. They have historically averaged 7-10 thousand fans per game. Much like the Oilers do with the Flames, the Rush share a regional and divisional rivalry with their Calgary counterparts (the Roughnecks). If the Oilers were to buy out the Rush they could expand on the whole Edmonton v. Calgary thing. The Rush would be a cheap pickup for the Oilers and they'd provide another tenant for their proposed new arena.

    Philadelphia Wings - This one is an absolute no-brainer. The current incarnation of the Wings has played 25 seasons and the team's name and logo traces its lineage back to 1974. Once the proudest and most popular team in the league, they've struggled in recent years due to the team not winning a playoff game since 2001 and finishing at or near dead last in the league several times over the timespan. But the team shares a home arena with the 76ers and Flyers, both of whom were just purchased by Comcast Spectator. The Wings' home games are already broadcast by CSN, so this seems like a no-brainer to me.

    Minnesota Swarm - Another one of the NLL teams that is inching its way, ever-so-slowly, towards stability. The Swarm's attendance dropped in 2011, but team ownership says revenues actually increased over the previous season due to a sharp reduction in the number of comped tickets. The Wild's current owner is seeking new investors, so this might be a move that could wait until things are a bit more "normal", but this again seems like a very low-risk proposition.

    That covers all the markets which have both an NLL and NHL team except Toronto. The Toronto Rock have historically been a stable franchise, and they will likely see attendance increases next season after winning the NLL Championship this year and starting construction on a new multimillion dollar lacrosse facility which will serve many purposes. The Leafs don't need the revenue and the Rock seem to be happy as an independent franchise, so I think that one is fine as-is.

    But what about other NHL teams? Are there markets that could do well with NLL expansion? I think so.

    The most obvious choice is Vancouver. The Cancucks are insanely popular and British Columbia is historically a stronghold for lacrosse popularity. The NLL has tried and failed in the market once before with the Ravens, but they didn't have the benefit of NHL ownership.

    What do you guys think? Agree/disagree with anything I said?

    Keep in mind that I am not suggesting NLL ownership for ALL NHL markets, as it would likely have disastrous results in many cities. Nor am I suggesting that NLL ownership is in any way a solution to any NHL team's major problems; just that I believe there are certain NHL teams that could operate an NLL team at a profit with very little risk or investment.
     
  2. RTN

    RTN Be Kind, Rewind

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    I don't think NLL will work in Vancouver. While lacrosse has pockets of strong support in BC, it's still not a mainstream sport. My hometown has a fairly strong lacrosse association and more kids still play roller hockey. A NLL team would be well behind the other pro sports in popularity and may have to go head to head with the Whitecaps if the MLS changes their schedule in the future. I think more people would prefer NBA or MLB over NLL and even support for those two leagues isn't that high.

    Maybe NLL could work in one of the suburbs (Burnaby/NewWest/Coq) if there was a venue, but I can't see it working at GM Place/Rogers.
     
  3. famicommander

    famicommander Registered User

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    I think an NLL team, especially one run by Canucks, would be extremely successful in Vancouver. Greater Vancouver is approximately the size (a bit smaller) of Metro Denver, and I guarantee you that lacrosse is bigger in Vancouver than it is in Denver.

    The general pecking order of sports in Denver is:
    1. Denver Broncos (NFL)
    2. Colorado Rockies (MLB)
    3. Denver Nuggets (NBA)
    4. Colorado Avalanche (NHL)
    5. University of Colorado Football (Boulder)
    6. Colorado Rapids (MLS)
    7. Colorado State University Football (Fort Collins)
    8. Colorado Mammoth (NLL)
    9. Denver Outlaws (MLL)

    There are lots of teams in Denver that are way more popular than the Mammoth or Outlaws, and yet the Mammoth have been first or second in attendance every year of their existence. And the Outlaws broke MLL's all-time single season and single game attendance records this year, and have led the league in attendance every year of their existence.

    The Mammoth play in the same arena as the Nuggets and Avalanche (and the Colorado Crush of the Arena Football League until 2008).

    I have no doubt that the BC Lions, the Vancouver Canucks, and the Whitecaps would all be a hell of a lot more popular than a prospective NLL franchise, but that in no way means that an NLL franchise couldn't or wouldn't be successful. Especially if they were co-branded with the Canucks, as the Mammoth are with the Avalanche.

    At every Mammoth game they highlight Denver Nuggets or Colorado Avalanche players in the crowd (and there is always at least one; usually more). They run the Nuggets' and Avs' upcoming home schedules on some of the secondary scoreboards all throughout the game. It's basically free advertising in front of 16,000 sports fans that are already paying you money. And the Pepsi Center team store is open during Mammoth games, where people are generally buying tons of Nuggets and Avs merchandise. In return, the Mammoth benefit from getting TV advertisements during Avs and Nuggets games. Plus there are Mammoth logos all over the Pepsi Center.

    The Mammoth are absolutely thriving as one of the bottom-tier sports teams in Denver.
     
  4. PhillyWings

    PhillyWings Registered User

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    Guys this has already been tried in some cities without success for various reasons.

    Sharks owned the Stealth and sold them off.
    Coyotes owned the Sting before all finical troubles did them in.
    Wild owned the Swarm before selling them off.
     
  5. Ernie

    Ernie Registered User

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    NLL was already tried in Vancouver, at GM Place no less. They packed up after 3 seasons.
     
  6. Made Dan

    Made Dan Registered User

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    They had the Titans play out of MSG, moved to Orlando pretty quickly IIRC
     
  7. krudmonk

    krudmonk Registered User

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    The average person will not immediately grasp the nuances of box lacrosse and will likely see it as redundant on top of hockey. I remember the Stealth even advertised themselves as "hockey...with balls." So witty, so misguiding...
     
  8. famicommander

    famicommander Registered User

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    The Ravens had notoriously unstable ownership, which is an unfortunate consequence of playing in a "fringe league" like the NLL, Arena Football League, MLL, etc. You get a lot of "dreamers" who don't actually have the resources or connections to run a professional sports franchise.
     
  9. Roughneck

    Roughneck Registered User

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    The Roughnecks have potential to make money and the Flames always knew that. Their early years they had pretty good support and it's dwindled a bit since despite lacrosse continuously gaining popularity in the city and province. The reason it took so long for them to buy it was because Brad Bannister as trying to cash in big from the sale and that didn't fly with Ken King or the Flames owners. With some actual promotion (not just at Flames and Hitmen games) the Roughnecks should get back into the 12,000+ average range and maybe even some sellouts as well.

    The reason things didn't work out in Vancouver was because the owners were pretty damn useless. They figured the popularity of lacrosse in the lower Mainland would do the work for them, a 'build it and they will come' model which worked fantastically well for the first year but then fell off quickly. Once there was the slightest bit of trouble with the lease and the realization that the Canucks weren't going to come to the rescue so easily they just pulled the plug.

    It can be profitable, but not always.
     
  10. chasespace

    chasespace Registered User

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    It may be viable in Tampa.
     
  11. No Fun Shogun

    No Fun Shogun 34-38-61-10-13-15

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    I'm sure that it'd be a good idea in some markets, but outside the Northeast, Colorado, and a few pockets here and there, don't see lacrosse being a worthwhile draw as the sport's just not at all followed in majority of the United States.
     
  12. DoyleG

    DoyleG Mr. Reality

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    The higher levels of attendance the Rush had were in teh first couple of seasons when they were still new to the scene. IN teh first season, there was always some promotion aspect going on at a home game. The owner spent to bring in high profile celebrities (Dennis Rodman, Brooke Burke, Dallas Cowboy Cheerleaders) into the homes games of that first season. TSN did a feature on that in that the owner had no qualms about spending money to bring in the fans. The team didn't win a home game that season.

    The attendance has been slipping, despite continued promotion, due to the lack of success on the field. The 7,000 is the norm for the foreseeable future as ticket prices go up and the curiosity seekers move away. The Rush also came in prior to the Oil Kings return, so they won't have a choice of dates that they need to be viable.

    In terms of financial cash, bringing the CFR to the new arena would be better than the Rush.
     
  13. RTN

    RTN Be Kind, Rewind

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    One of the reasons Kroenke owns an NLL team is to provide programing for Altitude. The owners of the Canucks don't own their own sports network, so bringing in an NLL team would just bring in competition for the Canucks, which is a cash cow for them right now. The Mammoth can lose a little money, but if Altitude keeps viewers then all is ok. I wonder how many people would buy the Mammoth without Kroenke and his connection with Altitude?

    I don't doubt the Nuggets and Avs do successful cross-promotion with the Mammoth, but you have to remember the Canucks are number one in BC. Would the Broncos gain from doing cross-promotion with the Mammoth? Probably not. They're already the most popular team in Colorado. If Vancouver got an NLL team, most of their fans would probably already be Canucks fans. While the Nuggets and Avs are always looking to gain fans, the Canucks are just looking to keep their fan support where it is.

    If the owners of the Giants (WHL) owned the Pacific Coliseum, then maybe they would try and bring in NLL to fill dates, but I don't think that makes financial sense for them.
     
    Last edited: Sep 5, 2011
  14. Big McLargehuge

    Big McLargehuge Registered User

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    All I know about the league is that I didn't know Pittsburgh had a team until the day it moved. Neither did anyone else, apparently. The Arena Football League is a better 'partner' for the Pens.
     
  15. drive45

    drive45 Registered User

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    LAX on LI

    Long Island has always been a hotbed of Lacrosse. Wang had a bad experience with the AFL (NY Dragons); part of that was probably due to the crummy conditions of the Coliseum, which of course hurts the Isles too, but he might find that the NLL would work better. I think an NLL team would be a great idea for any new NYI Coliseum, whether it's in Nassau, Queens, or Suffolk. However, if they do go to Queens, I think they should first look at St John's bsktbll as a co-tenant.
     
  16. Hoser

    Hoser Registered User

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    "Revenue streams" aside, from the standpoint of someone out west the biggest problem I think the NLL has is the business model itself.

    The Roughnecks have had decent attendance over the years but they've never really been a money maker for owner Brad Bannister. I'll grant you Bannister was not really a model owner (he had become known as a cheapskate and a very 'involved' owner in the vein of Harold Ballard, although nowhere near that bad) but the Roughnecks have a serious problem that has nothing to do with revenue or ownership: the players themselves.

    The NLL players make $15,000-$20,000 for 12 weeks' worth of lacrosse, which isn't so bad considering the overall popularity of the league as a spectator sport. That's all fine and good, but obviously players need to work 'regular' jobs. The NLL is still very much in its infancy in this respect. It's still a "minor pro" sport, and will be for the foreseeable future.

    The problem is about 3/4 of all NLL players come from in and around Toronto. They have jobs there. They have families there. They don't make enough in an NLL season to justify moving to Calgary for instance. So what do the Roughnecks and other western NLL teams do? They fly the players in for home games.

    I don't envision this model changing any time soon, therefore I expect most if not all of the western teams in the NLL to fold, not unlike the old PCHA and WCHL folded in the '20s because the costs for pro hockey teams out west were astronomical compared to the ones in the east. It's an inherent population density and demographics problem, there's really no way around it.
     
  17. DoyleG

    DoyleG Mr. Reality

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    The Saints played On LI during their existence while the Titans had some games at the Coliseum as well.
     
  18. DoyleG

    DoyleG Mr. Reality

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    Time for some myth busting.

    That would be fine if you think they don't play box lacrosse or in the MLL during the summer months.

    Actually, you should check your own roster. I doubt that Colquitlam, New Westminster, Or Nanaimo are in the Toronto area. You also ignore that there's an increasing contingent of locally-based players now taking the reigns in the city, hence there is less of need to fly them out.

    Whether they make enough money in the NLL is irrelevant. They wouldn't have issues finding jobs in their new cities. The issue has been the lack of a summer lacrosse presence. Be it box lacrosse or the MLL, those opportunities are starting to grow.

    If the pace keeps up, it'll be your statements that will end up being wrong.
     
  19. Hoser

    Hoser Registered User

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    You're kidding yourself if you believe lacrosse players make so much money they don't have a "day job" to fall back on. A professional lacrosse player, assuming he played in NLL and MLL in a given year, would be lucky to make $40,000 from lacrosse. Almost all of them have regular old jobs in the off-season.

    You are right though in so far as the balance of player origins on the Roughnecks has certainly swung towards BC. I checked the roster: the number of Ontarians is down to eight (~1/3 of the roster).

    (I was also surprised to find a former high school classmate of mine on the roster!)


    Still, the financial numbers jive with what I've said. I realize you're a fan of pro lacrosse and I have no beef with that (I would be too if the Roughnecks shut the music off while the game was in progress and the PA guy shut the hell up altogether), but strictly from a business perspective I don't see the NLL, particularly the teams out west, doing well in the long term unless something changes. You bring up "the pace"? "The pace" is about -5% year-over-year...
     
  20. DoyleG

    DoyleG Mr. Reality

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    You didn't read the post correctly when you responded.

    Try Again.
     
  21. Hoser

    Hoser Registered User

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    I'm sorry if you're a bit slow and can't grasp what I'm saying but frankly I don't think I can dumb it down.
     
  22. Krishna

    Krishna Registered User

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    Philadelphia wings games are broadcasted on CSN?
    Where? Ive never seen it.
     
  23. Confucius

    Confucius Registered User

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    I thought Toronto drew the most fans in NLL. I went to Wiki. to double check, here are some attendance figures. Although Buffalo and Colorado are doing well. They certainly aren't doubling the rest of the league. Where did you get your numbers?

    Attendance records

    Through the end of the 2010 season
    All time records Total attendance
    Rank Franchise Attendance '''''Home Games
    1 Philadelphia Wings 2,086,517 '''''' 157
    2 Buffalo Bandits 1,798,950 '''''' 143
    3 Colorado Mammoth 1,663,751 '''''' 153
    4 Toronto Rock 1,581,335 ''''''' 110
    5 Rochester Knighthawks 1,023,425 '''''' 120

    Average attendance
    Rank Franchise Per Game Attendance
    1 Toronto Rock 14,376
    2 Philadelphia Wings 13,290
    3 Buffalo Bandits 12,580
    4 Calgary Roughnecks 10,956
    5 Colorado Mammoth 10,874
     
    Last edited: Sep 6, 2011
  24. Sports Enthusiast

    Sports Enthusiast Not Here To Be Liked

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    Lol I wouldn't get too excited over this NLL nonsense. I'm not sure how manty years that league can really go on as a whole. I'd be shocked if in a decade it was still going.
     
  25. drive45

    drive45 Registered User

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    John Tavares, the uncle of the 1st overall pick of the NYI by the same name, is one of NLL's biggest stars; he plays for the Buffalo Bandits. FYI
     

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