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A Few Things about Winnipeg

February 16, 2010, 4:35 PM ET [ Comments]
Peter Tessier
Vancouver Canucks Blogger • RSSArchiveCONTACT
I do a fair amount of business in Winnipeg and have some family connections there along with a few other random sources. I think I have a pretty good pulse on what can happen there and what is viable for this city in regards to the NHL.

Part of the intrigue into this situation-the 'rumour du jour' is that it appears on the surface that David Thompson understands the revenue stream of his current investment. This is not the case of a team playing in a leased arena with small percentages of associated revenue streams, this is a different situation.

The MTS Centre and True North Sports and Entertainment are fully functional entities that are cash flow positive operations. They are making money... I know because a minority owner told me so. Take it a bit further in that the MTS Centre is in the top 20 venues in the WORLD for % of tickets sold to non sporting events. The MTS and True North have their revenue streams already in place. They have almost all the corporate boxes sold for events now and have an anchor tenant which draws approximately 8000 fans a game with the Manitoba Moose. Simply put, the MTS Centre was never intended to be built to attract NHL hockey back because it was needed for revenue, they knew where they were going to make money without an NHL team.

The old Winnipeg Arena was a true old school barm- one of the last ones ever. It was ugly and old with bad sight lines and poor infrastructure. Think the King Dome in Seattle but way way worse! It was not an attraction nor was it convenient in many ways. Those posted attendance numbers don't lie but go through the the entire league and do a now vs then and I bet you find some other interesting stats. Every team has ebb and flow and at the end of the day... it's not how many people you have in seats it's how much money you make from those seats.

Winnipeg has enjoyed a huge industrial renaissance in some regards, it is not the same economy that existed in 1995- it's diverse and has weathered two recessions quite well. More importantly Winnipeg has gained because there are people moving to the city from other parts of Canada because of business thus the size and diversity of the city has changed in dramatic form-ask anyone who lived there in 1995 until now.

Back to economics...

It's cheaper to fly out of Winnipeg than any other city in Canada because it's right in the middle of the country. It also has a appeal for players- ask Keith Tkachuk, Scott Arniel, Shane Doan, Teemu Selanne and other former Jets- it's easy to get anywhere from the city because of it's central location- that is an attraction for players. Remember other than golf NHL players can't do a lot. They don't water ski, snowboard, or do all the things that make people believe places like Vancouver or Calgary or Denver are so great... they are not allowed to have the same summer vacations the rest of us have. Winnipeg is no Montreal or NY, nor is it Vancouver or Dallas but it has it's charm and appeal, particularly affordability if you are a part time resident which many NHL players are in their work cities.

The average ticket price is always a concern for Winnipeg... the number told to me was for anything to get off the ground it would have to $100 average in the 15,083 seat arena. So 1.5 million per game gate revenue at max attendance. That's a lot of scratch for a city of 700,000 people. However, there are a lot of people here with disposable incomes. Home ownership costs in the city average about 30% of salary or less for most families...compare that to Toronto, Calgary, Montreal, or Vancouver- over 70%!! The money is probably there but will it be spent? The answer to that question wins the jackpot.

I recently looked at doing some advertising with one of Canada' sports channels, I was amazed at the costs when I went regional in the major NHL markets and teams vs a city like Winnipeg- the $$ are not that different for many different types of promotions and buy-ins when you factor in the number of eye-balls/ ears that will see and hear it. Right now the MTS Centre, Manitoba Moose and associated broadcasters in Winnipeg are getting a very good return. Seeing as the Moose are currently sold out in many forms of advertising, local businesses are paying a decent dollar and are seeing the return on their investment as these spots are hard to buy right now.

I think Winnipeg can work but the city, potential owners and the NHL need some answers to be sure. Mark Chipman president of the Moose has done a lot of work already in this cause... he built a state of the art hockey training and development facility with corporate support because the NHL said the city needed one. The NHL told Mark that for this city to work it needed a facility for the team and visitors to use as this would allow True North to operate it's facility with other revenue streams far more efficiently.

Not everything with Winnipeg is a glass half full scenario... I see it as such but that's my nature with business. There are many variables which affect so much of the economic realities most importantly currency exchange. Put that into the mix and every team other than Toronto and Montreal have huge problems, Vancouver probably not as bad but far from good. The lack of a significant amount of national and international businesses with head offices in Winnipeg is a concern. It is one thing for a community to have a diverse economy with a stable history but not every business continues the same approach to expenses and marketing over the long term. With any team sponsorships, will there be enough business to line up and support when the inevitable turn over happens and a few poor seasons? It's always easy to support a team when it's winning or new or both, but what about lean times...other than a handful of markets there are no guarantees.

If something is brewing with the NHL and Winnipeg it seems like having a gazillionaire as a co-owner/partner is a good thing. Some one who can support the team in lean times will be critical for a market like Winnipeg and David Thompson fits that bill. But why Winnipeg? Why not Kitchener, Quebec City, Hamilton or some other area in the hockey mad southern Ontario market? If David Thompson believes in Winnipeg should we bet against him? Perhaps there are two jackpot answers here and if so do Mark Chipman and David Thompson know something that makes this a good bet? For the residents of Winnipeg they can only hope so.

Enjoy the TEAM CANADA game tonight.
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