Monthly Archives: May 2009

Winnipeg deserves a National Hockey League franchise. It’s a great hockey city in a great hockey nation and for that reason alone, Winnipeg should be part of the NHL.

But Winnipeg needs two things. Winnipeg needs an owner (or group of owners) who are prepared to lose money every year in an arena that seats 15,015. And it needs an intelligent debate using REAL numbers and brutal honesty to determine if indeed, this city, can be part of a league that requires anywhere from $80 million to $100 million a year in revenues to operate.

However, once again the debate has been clouded by silly political rhetoric and numbers that have apparently come out of the fantasmagorical typewriters of Forbes Magazine. That’s the fishwrap that claims the “average” NHL team is worth $220 million. And in what alternate universe is that reality?

So in Saturday’s Winnipeg Free Press, Randy Turner and Mia Rabson wrote a couple of lengthy  pieces on the possibility of the NHL’s return to Winnipeg. Some of it was fine. Most of it used faulty numbers and anecdotal mythology.

For example:

Turner wrote: “Even in the midst of a continent wide recession, Winnipeg has remained relatively untouched by job losses or a plunge in the housing market. Indeed, while many North American cities — whether they belong to the NHL club or not — experience varying levels of economic distress, this city continues its usual and historical modest growth. All things considered, we’re doing fine, thank-you.”

Where do I start???

1. Housing prices in Winnipeg are off anywhere from 8-17 per cent. The value of my house is down 13 per cent since 2007. Guess Randy doesn’t own a house.

2. Untouched by job losses? What the …? The Winnipeg Free Press has laid off or bought out 28 people in 2009. There are hints of more cuts to come. Randy TURNER might be working, but a fine journalist named James TURNER is not. Evidently Randy hasn’t missed the people who have been run out of his building. Granted, to be fair, minimum-wage, no-benefit, part-time jobs in food service are still growing.

3. Modest growth??? Guess he missed the May 6 report at http://www.fpnewspapers.com. In the first quarter of 2008, the FP Income Fund made a profit of $2.3 million. In the first quarter of 2009, after all those job cuts, FP reported a loss of $500,000. That’s a drop of $2.8 million in a year. Last week, Publisher Bob Cox was quoted in his own newspaper as saying that there was no improvement in April. And that’s just one company. 

I’m in the middle of the advertising and marketing business in this province every single day and I can tell you, the FP isn’t the only business struggling. Did Turner miss “Black Wednesday” in the auto business? Park Pontiac didn’t miss it. Nor did Birchwood Pontiac. Walk into any business in Winnipeg — the international home of the Dollar Store — and ask the boss how it’s going. Nine out of 10 will tell you “It’s lousy. Business is lousy.”

I could go on, but why pick at nits?

The rest of this three page effort suggests only one thing: The NHL is a lost cause in a small building. If the Phoenix Coyotes averaged 14,875 per game in 2008-09 (Mia Rabson, page A10) and those are reportable numbers to the NHLPA so that the Coyotes can be involved in the revenue sharing plan, and the Coyotes have filed court documents this past week suggesting they could lose $50 million in 2008-09 with a “floor” payroll of $40 million, what would happen in Winnipeg if the team averaged 15,015 (a full house in the MTS Centre) per game? A $40 million loss? Would Mark Chipman pay for that kind of loss out of his own pocket or would he use the profits from the MTS Centre’s successful concert program to pay the debts on the hockey team? The Chipman family is way too smart for that.

Sadly, in all of this newspaper space, two earnest journalistic attempts failed to discuss the corporate advertising and promotional support required by the NHL in a city that has few if any head offices and only one or two local businesses that would even consider the multi-million dollar ad and promo packages that drive NHL teams. Remember, if an NHL team comes back to Winnipeg, almost every promotional and advertising penny in the community will have to be directed toward it. If an NHL team comes back, the Bombers might not survive the corporate hit. It could be time to re-consider the football stadium.

Does anyone have access to the real numbers? Does anyone know what real ticket prices must be? Has anyone ever written a piece indicating that there is a lot more to running a professional sports franchise than simply regurgitating the player payroll? How ’bout discussing the costs of turning on the lights in the building? We all know hydro is making money. How ’bout cell phones for employees? Hotels and per diems on the road? Buses and airplane tickets and equipment and daily building employee costs?  To suggest, even slightly, that a return of the NHL to Winnipeg, under the current CBA, is financially feasible, makes absolutely no economic sense at all unless you have an owner ready to pick up substantial losses — not Coyotes losses, but substantial nonetheless. 

Oh yeah, and about the $180 million (bottom end) or so it will cost to purchase an existing team and move it to Winnipeg? Even if the team broke even, it’s unlikely the Chipmans — or whomever — would ever see that money again.

The return of the Jets to Winnipeg must be discussed, but it must be discussed without emotion. It must be discussed with an eye to finding an owner who is so philanthropic that having a hockey team in Winnipeg is more important than making money.

Winnipeg deserves an NHL team, but it doesn’t deserve to have a team re-located here only to have an owner realize three or four years later that while Winnipeg is a hockey town, it’s also a frugal town that loves a winner.

And if a team were brought here for a second time and then sold to another city for a second time, what would that do to a city’s self-worth?