On this date in 1917 the Seattle Metropolitans beat the Canadiens 9-1 to become the first American team to win the Stanley Cup.
Earlier today, Chris Daniels reported an article about the Final Environmental Impact Study on the SoDo Arena has been slowed down and is not expected until the end of summer at the earliest. A tweet publicizing the post had text that said “could hold up NHL” even though the article failed to really address the potential delay.
Seattle Arena EIS on hold; Could hold up NHL to Seattle: http://t.co/GtN9aYG8Am
— KING 5 News (@KING5Seattle) March 17, 2014
This seemed to cause a minor tornado on Twitter and Facebook. After people had a chance to read the article, most people reached the same conclusion I did, there was no change. Similar to “news” items in the past, I felt the need to explain why it really was not news.
This is a very complex and fluid situation and since no parties are talking publically, we have to connect all the dots as they are revealed to us. We then need to speculate on the gaps, issues and anything else we can think of that will get us a team to Seattle. In order to illustrate the complexity of the situation and what I see has the major open issues I created a diagram. I try to identify the major open issues in each area and it is clear to me why everyone involved is staying close to the chest. What is not clear is the sequence of events to start resolving everything.
Let me know your thoughts and feedback. I will constantly be refreshing this as we learn more.
We have heard much of the news lately about 3 potential ownership groups interested in brining an NHL franchise to Seattle. It is also clear that the NHL views Seattle as an attractive market. So what makes Seattle such an attractive market?
Regional Sports Networks (RSN) are a critical revenue stream to pro sports these days. Seattle is the second biggest DMA that is currently without a regular NHL team on a local RSN. Root Sports Northwest currently serves about 3 Million households a month in Washington, Oregon, Idaho, Montana and Alaska. Although small, those last two states are fairly significant considering their appetite for hockey.
From a national perspective, having a team in Seattle should help NBC/NBC Sports numbers as well. It should be pointed out that our current viewership is split with CBC. That will change over the next few years as the HNIC broadcast will be of lower significance as the Rogers deal in Canada takes hold.
Of the top 50 biggest metropolitan areas in the country, Seattle ranks 7th in Average income and is the 2nd highest average income city without an NHL team. Hartford has a slightly higher Average Income but roughly a third of the population of the Seattle area.
I posted an article on SonicsRising last week on the risk to the city of amending the Memorandum of Understanding (MOU) to allow an either NHL or NBA scenario. Currently the MOU reads that an NBA team must be obtain before breaking ground on the SoDo Arena. I wanted to document the same content here so if you read the SonicsRising post, you probably don’t need to read this one.
The premise of the MOU is simple. ArenaCo will pay the city rent + taxes generated specifically at the arena will be the mechanism on which how the City of Seattle gets paid back the loan for the Arena. So on that last part, taxes on ticket sales and concessions will be applied to the loan from the city. (I am trying to keep this simple).
My argument is that the City has less risk if an NHL team is the lone tenant in the building vs. the NBA. This is backed up with data from 3 supportable metrics.
1) Attendance: NHL averages higher attendance than the NBA. Higher attendance = higher tax revenues
2) Ticket Prices: NHL averaged higher ticket prices than the NBA. Higher ticket prices = higher tax revenues
3) Demo Profile: According to The Nielsen Company report, 53% of NHL fans income is greater than $75K per year vs. 33% of NBA fans who have income over 75K a year. More disposable income = more money spent at the arena and therefore more tax revenues.
Now the reality is that the Sonics are more popular than a potential NHL team but the city used league averages to run their risk analysis models. Therefore the logic I lay out above should stay true when evaluating the risk of changing the MOU to potentially lead with the NHL. From a city’s perspective, changing the MOU should be an easy exercise.
The complexity comes from the other party in the MOU agreement, ArenaCo.
Last week I posted my assessment of Geoff Baker’s article from 2/13 about the potential of Seattle landing an NHL team. Since then, Geoff followed up with an additional article 2/20 with some information on a Seattle delegation headed up to Vancouver to learn more about the business of hockey and take in a game. For the most part, it was nothing new and information we expected was going on behind the scenes.
…but on Friday, while a guest on a Vancouver sports radio show, Baker revealed that the 3 potential ownership groups of a Seattle NHL franchise are 1) Bartozek/Lanza 2) Don Levin and 3) Steve Ballmer. The Ballmer news is huge and could be very positive for the prospects of landing a hockey team in Seattle for 2015-16 Season. If Ballmer is the man, it should greatly simplify the non NHL complexities of the deal. Specifically, agreement with ArenaCo (Hansen/Ballmer) and the City of Seattle (Amending the MOU). Obviously, Ballmer and ArenaCo will come to terms and the City of Seattle should not be AS concerned about changing the MOU to have an NBA/NHL option.
The entire radio interview is here. The segment starts around the 22 Minute mark and goes about 14 minutes. It is worth a listen. At one point Baker implies that the MOU would need a major re-write in order to allow an NHL first scenario. Baker and I spared over this on twitter a while back and I still believe this should be a minor addendum. Fortunately, King County Executive Dow Constantine thinks the same way I do so frankly I think Baker is wrong in that regard. I am also surprised to hear Levin’s name pop into the equation based on the differences of opinion Hansen and Levin had a while back.
I am trying not to get excited here as there still is only one source for this specific information and Ballmer has never expressed interest in an NHL franchise before now. I am proceeding with caution here but still excited at the prospects of Ballmer owning the NHL team. Now that the Olympics are over, I think it is possible that we might get an official statement out of the NHL or from one or all of the named ownership groups. I would expect Ballmer to confirm or deny this rumor in the next couple days.
Hang in there but keep in mind we should gain some idea how this will land in the next 4 months.
By now you have probably heard about the article posted in the Seattle Times last week about NHL Deputy Commissioner, Bill Daly saying Seattle would be a “good hockey market”. While there were a few nuggets of new speculation in there, we have heard a lot of it before. First, we know the NHL likes Seattle so the Bill Daly quote in the article isn’t exactly new info. Here are some of the quotes that we have heard from League and team officers over the last 12 months:
“The research that I have seen tells me that it would be a very strong hockey market. …Obviously if there were a team in Seattle it would create a decent rivalry with their northern neighbor, namely Vancouver.” -Gary Bettman, NHL commissioner (April 7th 2013)
“But I think it’s safe to say we’re very intrigued by the Pacific Northwest generally. Going forward I would expect that to the extent expansion comes into the picture or relocation is needed, I’m sure the Pacific Northwest is going to get serious consideration.” -Bill Daly, NHL Deputy Commissioner (July 24th 2013)
“With the [new] arena in Seattle, we have a once-in-a-lifetime opportunity to put hockey back into the Seattle/Portland marketplace and we have to make a commitment to that.” – Tim Leiweke, Maple Leaf Sports Entertainment CEO (October 29th 2013)
The timing makes a lot of sense for 2 reasons:
- Ramping Window: Expansion teams need as much ramp as possible to get ready for their inaugural season. Training Facilities, Scouting staff and front offices need to get rolling ASAP if 2015-16 Season is the target.
- PR Timeline: The NHL needed to get through their two big Regular Season showcase events (Stadium Series & Winter Classic). Post Olympics and a lull in sports between the Super Bowl and March Madness provides a perfect announcement window. The only other windows I see could be right before the Stanley Cup Playoffs or right before the NHL draft in late June.
Don’t get me wrong, I love the news but I don’t think it is as big as it sounds. That or I don’t want the fans of Seattle to get burned again. Seattle will be a great NHL market someday and I hope it starts in 2015 but let’s move forward with some tempered enthusiasm.
January was a tough month to analyze but there were some positives for the NHL reported attendance. First off, comparing January 2014 to 2013 is not really possible as we came out of the lockout last year and had opening night in January last year and the condensed schedule generated a little more buzz and excitement than your normal January NHL game. We also had 4 outdoor games in January this year which makes the comparison even more challenge. I attempt to navigate the numbers with these nuances in mind. Most numbers and graphs exclude outdoor games.
Here is a summary grid of the how the reported attendance shakes out:
If you exclude the Outdoor games, attendance is down a bit for the month of January. If you peel back the onion a little bit, the two biggest arenas (Chicago & Montreal) in the league had two less game each compared to January of 2012 which could explain some of the 1.9 % dip after you exclude the outdoor games.
Here is how each team has fared compared to the 2011-12 Season (the lockout shortened season of 2013 is not a good comparison).
If you look at it by a team by team basis, January had 8 teams that had an increase & 8 teams that had a decrease in attendance compared to 2012. As you can see, the Coyotes continue their big gains in January and are now the biggest increase across the league.
January was up only slightly from 2012 and most of their season games were made in the prior 3 months. Haters be warned that with no remaining home games in February, the Coyotes will have their biggest average attendance for February in 5 years. Roughly a 15% increase compared to the prior two seasons.
The recovery in Dallas appears to have taken a step back in January with a drop of 4% compared to January 2012. This could be some weather issues keeping fans at home or it could be a short blip in their recovery. They are still up 15% from 2011-12 season.
Florida is definitely struggling at the gate. This is due to a perfect storm of ownership changes & struggles on the ice. Although Phoenix is turning around with new owners this year, Florida’s ownership change was several months later and didn’t allow the new owners to drive a lot of change this season. Similar to Dallas, I would expect a turnaround next season.
Per reader request, here is Tampa Bay’s Dashboard. The Lightning are flat compared to 2011-12 season but January was a big month up 6% compared to 2012. Also cool to see that they have averaged over 18K in each month this season.