Ottawa has a (financial) conundrum

[Tom ServoMST3K]

We're rapidly approaching Phoenix levels in OTT, where you just have to respect the fact anyone shows up to watch a hockey game.

 

[Liebo]

A few comments on the discussion:

So what really does this mean? Say they lose 2000 STH total at an avg. single game ticket price of $45. Over 41 games that's 3.6 mil. Let's say walk-up declines the same and total gate is down 7 million, or basically the cost of EKs salary this year.

This calculation isn't entirely correct, because tickets are just one element of game-day revenue. It leaves out merchandise, parking, and the team share of concessions, to name a few. Depending on the share of concessions the team receives (I admit, I have no idea about the concessionaire details), those revenue streams can easily approach the ticket figure. As a result, the impact of losing 2,000 to 4,000 fans per game could have a substantially greater impact on revenue than noted.

Ottawa used to have top ten attendance by numbers. This included a large number of very cheap & free tickets to ensure the building was full. 2-3 years ago the team changed the strategy and dramatically reduced the discounted tickets in an attempt to force the market to pay higher prices. Well, surprisingly the demand in the market did not magically change overnight and the result was lower attendance, but with slightly higher actual paid attendance. (This is what led to the whole seat tarping fiasco) So the strategy kind of worked, but while paid tickets revenue increased, the team lost out on the additional parking, concessions and merch revenue that the additional 2000 fans provided in the past. Further, the team lost out on 2-3 years of fanbase growth since those cheap tickets were primarily used by families and kids charities.

This topic alone could be its own thread--and has in fact been a source of debate among industry professionals ever since the words "discount" and "comp" were first uttered. On the one hand, some teams use free tickets to bolster crowd sizes and in an attempt to give potential fans exposure to their product. Some will try to achieve this with charitable donations under the cloak of community support. On the other hand, there are organizations that abhor discounts and freebies, arguing those practices degrade the value of their tickets. Whichever side of the coin you choose, it's fair to say that a team which routinely employs free and discounted tickets will have a long a difficult process to re-engage fans at list price. In fact, industry professionals will say there is evidence that it takes about seven years to move from a discounted model back to full price. (Of course, a new arena would go a long way toward resetting pricing expectations.)

There might be a limited pool of people who would want to throw their lot in with that guy as a partner.

We'd all like to think that professional sports are like other businesses, and bad operators will struggle to find investors. That's just not true, though. The investment opportunities are few and far between, and there's too much prestige in being able to brag that you own a piece of a team--even the Sens in their current condition. Perhaps an even greater incentive: you're guaranteed to make money. The worst-case scenario is that Melnyk drives the team further into the ground and he's forced to sell. At market rates, there's a profit to be made. The Senators have increased in value during Malnyk's tenure, not because of him--and according to what I read, in spite of him. If Lebreton comes to fruition, the team jumps in value. So there will always be someone willing to sign a check for a piece of the action, if Melnyk decides he needs their help.

Sorry if this sidetracks the conversation. I'm more than a thousand miles away, but a few of the conversation points just piqued my interest.

 

[TheLegend]

We're rapidly approaching Phoenix levels in OTT, where you just have to respect the fact anyone shows up to watch a hockey game.

I don’t know if I should be flattered or insulted there, Tom???

 

[Tom ServoMST3K]

I don’t know if I should be flattered or insulted there, Tom???

If you're a Arizona/Phoenix, fan - Flattered.

I don't understand the people that show up for games there. Especially after IA collapsed as an ownership group. I'm surprised a single fan shows up to watch. You have to love hockey a heck of a lot, and the fact Arizona still averages as many people as they do is a big reason why I think the market has potential still.

Sorry - getting megathread flashbacks here

 

[Mightygoose]

If you're a Arizona/Phoenix, fan - Flattered.

I don't understand the people that show up for games there. Especially after IA collapsed as an ownership group. I'm surprised a single fan shows up to watch. You have to love hockey a heck of a lot, and the fact Arizona still averages as many people as they do is a big reason why I think the market has potential still.

Sorry - getting megathread flashbacks here

Perhaps the Sens are just taking the Coyotes spot in the mega thread anthology while the Arizona one is sleeping.

Both teams have attendance issues
Both are desiring play in new buildings in a different location from where they are
Both were BK at one time.
Both are owned by a single person that used credit for their purchase, now leveraged to the hilt affecting the rest of the organization.

Us megathread nomads have found a new home....and it seems like business is about to pick up on this front

 

[GKJ]

Perhaps the Sens are just taking the Coyotes spot in the mega thread anthology while the Arizona one is sleeping.

Both teams have attendance issues
Both are desiring play in new buildings in a different location from where they are
Both were BK at one time.
Both are owned by a single person that used credit for their purchase, now leveraged to the hilt affecting the rest of the organization.

Us megathread nomads have found a new home....and it seems like business is about to pick up on this front

While the arena situations are similar between Glendale and Ottawa, I think the attendance situation in Ottawa is more like what we used to see in Chicago, where fans are actively looking for ways to not support the team as to not support the ownership. Because of the arena situation, down the road this could do down like Houston did with the Oilers in the mid 90s.