Sometimes you just shake your head and wonder where sports fans come up with their notions. After Gary Bettman, National Hockey League Commissioner, announced the approval of the bid by Las Vegas for an NHL expansion franchise, all posts on social media had a “similar ring.”
For now, the bid by Quebec City has been rejected and many feel that Quebec City does indeed “deserve” a team. No city deserves a team unless the following three important boxes are checked: government support, a large local cable or satellite TV deal, and a corporate base willing to spend money as a marketing partner, suite or club seats client. Simply stated, that is the formula. The government support includes helping to fund an arena or a stadium.
Quebec City has hockey fans, but there are not enough well-heeled customers. Quebec City is a small market, a government town with limited corporate support. Twenty-one years ago, the city could not hold onto a franchise because it lacked an NHL style arena with many revenue producing gadgets. On top of problems such as the Canadian dollar, the lack of corporate money and small television markets, the arena situation is already losing money with the opening of a new building.
The other item that Gary Bettman did not bring up is the housing evaluation problem developing in Canada causing a sudden drop in value of many homes. On Monday, Moody’s Investors Service put out a paper which said banks in Canada probably could weather a housing downturn. However, increasing homeowner debt and housing prices in Canada look very similar to financial conditions that existed in the United States prior to the financial meltdown of September 15, 2008. Toronto and Vancouver are fine, while NHL cities such as Calgary and Edmonton seem to have problems similar to those of Quebec City. The Moody’s report is not good news for Quebec City’s chances of entering the NHL in the near future.
By Evan Weiner for The Politics of Sports Business.
This article was republished with permission from the original publisher, Evan Weiner.