Hamilton from a New Jersey Perspective

by John Fischer on May 11, 2009 10:17 PM EDT in Site News & Miscellaneous

The big non-playoff story in the NHL is that Jim Balsillie is at it again - looking to poach the Phoenix Coyotes and move them to Hamilton. While there are reasons why this would be a bad idea, James Mirtle considers the larger issue of whether Hamilton - which is in the Greater Toronto Area - would support a NHL team.

Essentially, he describes the area as an under-served market. While there are 2 AHL teams (Hamilton Bulldogs and Toronto Marlies) and numerous, more local OHL junior teams, your only local choice for the NHL is the Toronto Maple Leafs. A franchise that has a remarkably high ticket prices for a product that not only hasn't made the playoffs in the last four seasons, but won their last Stanley Cup in 1967. Mirtle posits that if the Maple Leafs can generate so much revenue (see the chart at the bottom), and given the relative financial inaccessability of going to Leafs games - according to Mirtle earlier this year, the average Leafs ticket price in 2008-09 was $76.15 - a second team in the area should be a no-brainer. A "slam dunk" as Mirtle states in the comments.

As a Devils fan, a fan of a team in an area that has three NHL teams in one market, I would like to offer some extended thoughts on the theories Mirtle provides. As a note, I'm not trying to pick on Mirtle alone - just the larger logic in favor of moving a team or even putting an expansion team in Hamilton.

The Market Sizes

First off, according to city's site, the Greater Toronto Area is estimated to contain about 5.5 million people. That's not a lot. Based on the U.S. Census' 2007 estimate, the NY-NJ-LI Metropolitan Area includes 18,815,988 people. And yet, the Devils and Islanders are definitely not selling out every game - and I think it's a bit questionable as to whether the Rangers are really selling to 102.3% capacity. There is more than population in play, there's also the Rangers' history, the Devils' success in the last 15 years, and the Islanders' dynasty built in the early 80s to consider along with the current statuses of each team. Yet, as shown in the same revenue chart put together by Mirtle, only the Rangers are in the top 3 in terms of generating revenue.

Of course, there are reasons for this. The Islanders have been, for lack of a better word, awful. And these three teams are also competing with four big teams in two more popular sports - along with countless other entertainment options in the are. Besides, hockey is an institution in Canada, so while the GTA may be that much smaller than the NYC Metropolitan area, the numbers should be there, right? Probably, but my point is that a massive area of population doesn't necessarily justify multiple teams on it's own. A market size of 18 million isn't leading to three teams selling out their arenas; a market size of even 5.5 million passionate hockey fans won't fill two on their own (I'm honestly still amazed they still sell out Toronto, but it is what it is).

The 'Yotes & The Potential Market

Well, as alluded to in this earlier work by Chemmy at Pension Plan Puppets, that isn't a slam dunk. Suppose the Coyotes do go to Hamiton. This new team in Hamilton is going to be supported by non-Leafs fans and anyone who hates the Leafs. The big gamble that Balsillie is making is that there are enough of these non-Leafs fans as well as disgruntled Leafs fans to support this team to make this work. Offer lower ticket prices than the Leafs (shouldn't be a challenge), and the masses of kids (and their families) can go experience (NHL) hockey live.

Despite what the Leafs have proven, most people aren't going to tolerate a loser. Especially the kids, who can be fickle as anything. A bad on-ice product isn't going to turn a lot of people away. Phoenix has made the playoffs only five times in Phoenix, with their last appearance coming in 2002. I understand there's all sorts of other issues surrounding this, but I doubt that many will go see the Hamilton Coyotes and decide to become and remain supporters should they remain at the bottom half of the conference. Why would the ex-Leafs, the kids, or anyone stick around for that? They can go support Toronto and get the same thing!

Most of all, I haven't met any fan of any team in any sport who stated their main reason for supporting the team was that they were more affordable than another team. When I do, I guess I'll let you know.

The Kids or the Future of Supporters in the Region

This may be a bit of an aside, but I have to take personal issue with this:

The fact is that the vast majority of kids are growing up in this city without ever having the opportunity to attend an NHL game, and I wonder if at some point that'll turn a generation off the sport entirely.

My first experiences with hockey and how I fell in love with the Devils were all through the television. I can count on one hand the number of games I went to as a kid. Going to the Meadowlands was pretty much a big deal (and a pain) in of itself, much less shelling out the money for tickets. It wasn't until the Devils moved to the Rock did I make an effort to go to games regularly (and that was even after I started this blog). Yet, I still am a die-hard fan of the Devils.

You do not need to go to a game in person to become a supporter. I have conversed with many who are Devils fans who live no where near New Jersey or even in the country. With television and increased coverage on the Internet, you can be a fan of anyone in anything these days: from Fulham Football Club all the way to the Sydney-Collingwood Magpies. All without leaving your city. Hell, my best friend is a die-hard Pittsburgh Penguins fan and he grew up and lived (and still does) in the same city as I do!

I agree it helps big-time to become a fan by seeing a game or the team live. But as long as the kids have some access to seeing a team, they should be fine. Those who want it will find their way. I, and thousands of others, are living proof of this. We have and will make our fandom work be it in New Jersey or in the GTA.

The Second Banana Effect

Consider that the New Jersey Devils have earned 8 Atlantic Division titles, featured Hall of Fame defenseman Scott Stevens, future Hall of Famers Scott Niedermayer and Martin Brodeur, rising stars like Zach Parise, 12 straight playoff appearances, 4 trips to the Stanley Cup Finals, and 3 Stanley Cups in the last 15 years. They are arguably the most successful hockey team in his area in recent history. Off the top of my head, only Detroit comes to mind as a more successful franchise in this same time span.

Yet, they remain secondary in coverage, popularity, and in buzz with the New York Rangers. The Devils, despite being in the region for 27 years; are not the focus point in the region. The Islanders for 36 years and had a complete dynasty, yet they remain second-place in perception to the Rangers. By virtue of being in the middle of the biggest city of the world and in existence since 1926, the Rangers get the most attention. When they do well, they get the headlines. They get first billing on the local MSG (well, it is owned by the Rangers' owners, but still). They get the call for nationally televised games more than the Devils and Islanders - even back when ABC and FOX had NHL deals. Despite the Devils being in a different state and the Islanders being out in the suburbs of Long Island, New York City still holds an appeal of it's own all worldwide and neither area can ignore that. As a result, both teams are still pulling fans away from supporting the Rangers and both Long Island and New Jersey has long-time Ranger fans, passed on by family or some other way. It's not enough to be a good hockey team, you have to be an appealing hockey team. And the Rangers have a longstanding history and the fact it's in the heart of one of the most famous cities in the world, an appeal that cannot be denied.

Why would Hamilton be any different?

Sure, the initial buzz will be there with an arrival of the team, potentially lower ticket prices, and so forth; but even if the Hamilton Coyotes become a wildly successful team, they will not take over the market. Toronto will reign supreme. The major media, like in New York, is in Toronto. The people in the GTA see Toronto as the big city - it's why it's called the Greater Toronto Area. Toronto, on it's own, commands attention within Canada and abroad and I think that fact will help keep the Leafs of the forefront in Toronto and in the GTA. Just like New York, on it's own, helps keeps the Rangers in forefront of the Devils and Islanders in the NYC Metropolitan market. Basically, Balsillie - or any owner in Hamilton - has to know, accept, and workaround this unfortunate fact.

And the fickle, casual fan, isn't likely to be attracted to the "second best" team in town. Be it true or perceived. And you them in order to develop a hardcore fanbase anyway. Sure, there's always going to be die-hards for any market - like Phoenix - but it needs to be able to grow. You cannot underestimate how hard it will be with multiple teams in the same market despite differing accomplishments among those teams, as we have seen (and lived in!) here in New Jersey. Even while the Rangers were a playoff-missing, all-around terrible hockey team.

Oh, and this doesn't even consider the possibility that the Toronto Maple Leafs might actually become a contending hockey team. That alone will only push Hamilton into the backseat. Yeah, Toronto will be making plenty of bank should that happen; but Hamilton certainly won't benefit unless the two face off in the playoffs. Law of averages says the Leafs being good will happen eventually, so I don't think Hamilton should bet on trying to beat Toronto to that level - even if it is the current Phoenix franchise being moved or an expansion team in the future.

Lingering, Inconvenient Questions

Let's put all this aside for a moment. Suppose it would be true that the NHL could make so much money with a team in Hamilton. Suppose the market would welcome Hamilton and stick with Hamilton for years to come. How come there was no expansion bid for Hamilton (or any city in Canada, but that's beside the point) back in the mid-1990s? I'm not being facetious. Ownership groups stepped up, put plans together, and made bids for Nashville, Minnesota, Atlanta, and Columbus with one goal in mind: make money through hockey. Success has been mixed among the four teams; but you can't say they were only putting teams there just to make the conferences even. Above all, it's all about making money and they went with developing new markets (Nashville, Columbus) while tapping into old markets (Minnesota, Atlanta.

Be it the ex-Coyotes or an expansion team, is it all really just an issue of timing? GTA is ready for a market now, but not a decade ago? Correct me if I'm wrong, but was the GTA not all that hockey-mad back then? I do believe while they were at least making the playoffs, the Leafs were not winning anything of importance and, presumably, still charging a lot for tickets? I plead ignorance (a claim I'm sure some are already leveling at me) but what's so different about 2009 than 1996? Maybe the GTA wasn't so big? Maybe there was a bid but it failed for some other reason?

I can see they may not want Balsillie involved, but if the theory that two teams in Toronto equals mad cash, why hasn't the NHL been moving heaven and earth to get a team there?

Bottom Line: It Can Work, but it'll be a Lot Harder than Expected

Given the Devils' and Islanders' longevity right by the Rangers, they are standing evidence that multiple teams in a market can work in the NHL. And it could very well work in the GTA. What I'm pointing out is that it's going to be a lot harder than some expect - I don't think or believe it's as simple as "Hamilton is in Southern Ontario, it has a lot of people who like hockey, they'd love to go to games but not to the Leafs, so put a team there and watch the dollars roll in." If that's the feeling from Balsillie or any owner, then expectations of greatness will not necessarily be met - especially in terms of finances.

It'll be an uphill battle to win enough fans away from Toronto. Any owner, be it Balsillie or not, will have to be willing to spend quite a bit to get in and remain truly committed to making the franchise work - even if it's not an initial success.With poor management and results, they could very well be in Phoenix's current position years from now! And then where would we be, other than older?

Would Hamilton be a successful place for a franchise? Probably. At least in the short term. It's with the long term view that is not so clear precisely because Toronto is right there. And moving a team to Hamilton or putting an expansion team there will not be a success if they end up moving or folding later on.

To reiterate my main point, the biggest challenge for Hamilton to last long term will be trying to sway them away from Toronto, who has the established history and popularity in the city. Given what we know about the Devils, Islanders, and the Rangers sharing a larger population than the GTA, it is a massive challenge. Should other, un-foreseen variables arise, like the Canadian dollar tanking in the future or the people of the GTA area showing that they have no time to support a second not-immediately-successful or unsuccessful team, it makes this challenge even more difficult. (Not that you can prepare for the unexpected, just that no one is invincible).

It's because of these issues and questions, I don't think a team in Hamilton is a definite win-win or a "slam dunk" for both sides in the long term view.

Personally, if there should be a team in Hamilton, the NHL should expand there and not essentially kill a market in Phoenix to do it. I don't mind if the league makes it Seven, but not at the cost of somebody's One. Feel free to argue otherwise - and I know you will - in the comments.

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Trust me, it would work

There was a bid for a team in Hamilton during the mid-90s expansion craze, and the market was there. Unfortunately the city backed into the plan ass-backwards, without an actual owner confirmed. Still, they paid the application fee, which was later refunded when no ownership group came forward. Hamilton also had a solid bid in place in 1990, backed by Ron Joyce (Tim Hortons owner). I live 30 minutes away from downtown Hamilton, and I can say with certainty that there is without a doubt a market for an NHL team. There are as many people passionate about hockey who absolutely hate the Leafs around here as there are Leaf fans. I won’t go a Leafs game, but I’d absolutely buy season’s tickets tomorrow if they went on-sale. Every game during the first few seasons would be sell-outs, and after that every Leafs, Canadiens, Penguins, Capitals, Senators, and Oilers game would be sold out too. I’m guessing the Rangers would sell-out too because people would go just to see Avery. Honestly, every single time rumours about Hamilton getting a team comes up, people around here get so fired up. It’s all anyone talks about, and it kills us every time we get passed over. Do you think anyone in Phoenix would even care if the Coyotes move?

by Adam V on May 11, 2009 10:52 PM EDT reply actions

I didn’t know that there was even a bid. Thanks for informing me. Perhaps a better bid will be made for the next round of expansion.

Last question first, hell yes, there are people who care about the Coyotes moving. Let me introduce you to a site called Five for Howling and through there, you can find out what you need to know. I definitely care about it as the Devils nearly moved in 1995 . It’s easy to say “move this team” when you know or care little about who support it.

You’re right that the first few seasons would go splendidly. I’m more concerned about the long term viability. Like the Devils and Islanders continue to experience in this area for over 2 decades, the Rangers take center stage in terms of coverage and notice. Therefore, they are more known than the other two despite periods of being the more dominant team on the ice. Based on this, I would have to think that this will happen in Hamilton, Kitchener, or anywhere remotely close to Toronto. Who ever ends up putting a team in Hamilton and owns it will have to deal with that reality and accept that it will hamper how much business they do be it in the second season or the 20th season.

And if the Hamilton team doesn’t give the fans in those first seasons reasons to stick around – we may be just repeating the same story that we’ve seen elsewhere unless the ownership really works to this happening. Look at it this way: If a lot of the anti-Leafs sentiment comes from the fact that they haven’t won anything of value in decades; then I don’t see how a second team, like, say, the Coyotes, that hasn’t won anything of value in decades will be embraced for so long? Passion for hockey aside, habitual non-winners aren’t attractive or good for revenue.

Lastly, do all those who hate the Leafs are willing enough to support Hamilton? I understand the disgruntlement, but the real question is how many of them are seriously going to continue for a Hamilton team after a season or so. You need not be local to a team to support them, now more than ever with increased accessibility to follow whoever you want. You don’t need to be in the GTA to support Toronto any more than you need to be New Jersey (or in the US) to support the Devils.

My issues are more long-term related. I probably should have made that clearer. Anyway, thanks for letting me know about Hamilton’s failed bid.

Devils in my heart! Devils in my mind! Devils in my eyes! Devils until I die!
In Lou We Trust - The Devils SBN Blog

by John Fischer on May 12, 2009 10:59 PM EDT up reply actions

one thing

yeah, a second GTA team would play second fiddle to the leafs, but playing 2.5th fiddle to the rangers hasn’t stopped your NJ devils from being a top-10 revenue team.

by passive_voice on May 13, 2009 9:47 PM EDT up reply actions

A lot of the Anti-Leafs sentiment comes from the fact that Toronto (like every biggest-city-in-a-country) is a transient place that attracts people from all over the country.

Look at it this way: the Mets work because there are people in NYC who hate the swagger of the Yanks. The Leafs are the Yankees (without the wins) of the NHL, in terms of media coverage, arrogance and the rest of it. Every hockey fan in Toronto who grew up cheering for a team other than the Leafs (and there are a lot of them from out east, out west and even in town) would latch on to the new team not because the Leafs don’t win, but because they hate the Leafs.

I’m a Sens fan, through and through. I’ll never cheer for another team the way I cheer for the Sens. But if I lived in Toronto, I’d jump at the chance to buy Hamilton Coyotes tickets way, way ahead of Leafs tickets. There are plenty in Toronto just like me.

by dzuunmod on May 14, 2009 5:22 PM EDT up reply actions

I can see they may not want Balsillie involved, but if the theory that two teams in Toronto equals mad cash, why hasn’t the NHL been moving heaven and earth to get a team there?

Because the Leafs are a very powerful entity in this league, and they do not want a second team near their market. As Adam says, there was an expansion bid and it was quashed by Toronto.

With poor management and results, they could very well be in Phoenix’s current position years from now!

As the league’s lowest earner with revenues of only $50-million and losses of $30-million a season? Really? When the lowest Canadian franchise is miles above that? And when this one would have a much larger population to draw from than an Edmonton or Ottawa?

I’m sorry, John, that’s just not even close to being true.

Given what we know about the Devils, Islanders, and the Rangers sharing a larger population than the GTA, it is a massive challenge.

It’s apples and oranges. Apples and bananas, really. NHL hockey in this market is equivalent to the NFL in the U.S., and we’re talking about a group of a half dozen cities that would support the team and many transplanted Canadians that are not Leafs fans. Hamilton is near Kitchener-Waterloo, London, Oakville, Mississauga, etc., and they’d be big-time supporters of a franchise where tickets would actually be available.

Hamilton would easily be a top 10 revenue-generating team in the league, not a revenue-sharing drain. I’m far from the only one saying it, I cover the game for a living and I’ve lived in the market for years. I’m not sure what else I can say to make my case.

It is a slam dunk.

Blogging on hockey at fromtherink.com

by James Mirtle on May 11, 2009 10:57 PM EDT reply actions

James, 2003 was only 6 years ago – back when Ottawa – which is in Southern Ontario, I know, not the GTA but still – filed for bankruptcy because the franchise ran up far too much debt. There was even a moment in 1999 when Ottawa is up for sale which spurred fans and a bailout package to keep the team as-is then. A franchise in which they secured government loans to pay their players whilst they were in first place in the conference.

When I was referring to the possibility of another Coyotes scenario, I was referring to bankruptcy and the real threat of moving again. I apologize for not making that clearer, that’s my fault. Even so, poor management can easily derail what some may think is a “slam dunk” – either by not fulfilling potential or, like Ottawa then and Phoenix now, sitting

I’m sure Hamilton would be an initial success; but like anywhere else, it’s going to take a true committment from any ownership. Even the “passionate” fans in Hamilton, Kitchener, London, et. al. are probably like fans anywhere else in that they won’t tolerate a poor on-ice product for too long (if they did, wouldn’t they be Leafs fans) regardless of how cheap the tickets are. Last I checked, the Coyotes weren’t all that good and unless they get better quick, it’s going to be an albatross. Plus, the argument of a more affordable second hockey team in the face of a struggling, expensive first hockey team weakens again if that first hockey team gets good quickly. When (not if, PPP fans) Toronto becomes a contender, the attention is going to be even more affixed on the Leafs and not whoever the second team would be.

Not to mention my main point that Toronto is in the area and will dominate the area still – just like NY dominates the NY metropolitan area that includes New Jersey and Long Island – the potential revenue for any team in Hamilton will be hampered to some degree by this. And I’ve lived and experienced this sort of scenario my whole life in New Jersey! The Mets are second to the Yankees; the Jets are second to the Giants; and the Devils aren’t touching the Rangers – be it in hard numbers or by perception.

Again: It could work, and it probably would – but it’s going to take committed and smart ownership to make it work. Is Balsillie the guy? Is anyone else out there willing to do that? I don’t know. Otherwise, it’ll just be like any other market with ownership-related issues. Like Ottawa was in 2003. Therefore, I remain skeptical of any calls of a “slam dunk” given what I’ve seen with the Devils.

Devils in my heart! Devils in my mind! Devils in my eyes! Devils until I die!
In Lou We Trust - The Devils SBN Blog

by John Fischer on May 12, 2009 10:47 PM EDT up reply actions

Again, you’re comparing Newark to Southern Ontario. That’s insane when it comes to pro hockey … there just aren’t parallels there.

Ottawa ran into issues due to ownership debt, which wouldn’t be an issue with Balsillie (or likely any wealthy Torontonian willing to buy the team). The Leafs would certainly dominate the marketplace, as they do already, but there are millions who cannot attend those games and desperately want to. There’s no comparison between the demand for Leafs and Rangers tickets.

Blogging on hockey at fromtherink.com

by James Mirtle on May 12, 2009 11:21 PM EDT up reply actions

I think Hamilton would be great..

Do not get me wrong I would hate to see them leave Phoenix because I live in Albuquerque and like to watch the Devils live when they play in Phoenix. But if they have to go somewhere Hamilton would be a great fit. It is in Canada and they have a CFL team that is supported well. Canadiens love their hockey and this would bring up good rivalries with Toronto and Buffalo. Also better matchups for hockey night in Canada. I think it would work..

Donald Vasquez

by don_vas on May 12, 2009 5:00 PM EDT reply actions

Large Factual Errors

On top of the apples and oranges comparison problems that destroy your argument, you don’t even have your facts straight.

Hamilton did bid for a team for the 1992 expansion, but didn’t follow up in the later 90’s with the dollar at a low and Bettman determined to get a national TV contract in the U.S.

First off, according to city’s site, the Greater Toronto Area is estimated to contain about 5.5 million people. That’s not a lot. Based on the U.S. Census’ 2007 estimate, the NY-NJ-LI Metropolitan Area includes 18,815,988 people.

Yes, according to the city’s site. Of course, the GTA doesn’t include Hamilton, Niagara, Kitchener-Waterloo, Halton, much of Durham or Brantford. If you want to count the population in the same way you’re counting NY-NJ-LI, there’s roughly 9 million people within a 60 minute drive of the Air Canada Centre. Without counting any part of the official Greater Toronto Area, the population of Hamilton and it’s suburbs is nearly 2 million (that’s Hamilton, Burlington, Niagara, Kitchener-Waterloo & Brampton – all a 30 minute or less trip to Copps Coliseum).

Back to apples and oranges. How does a city like Chicago, whose census metro area is smaller than Toronto’s (now I am including Hamilton, etc), support two baseball teams, when it’s obvious Toronto couldn’t? It’s because it’s a different market, and up here, supporting two, three, or even 4 teams would work out just fine. The NHL’s problem with it, is it would only improve gate receipts – it wouldn’t sell any more merchandise or provide any additional TV revenue.

by Ryan in TO on May 13, 2009 12:26 PM EDT reply actions

As has been said above Hamilton has tried several times to bring an NHL team here, but until recently the low Canadian dollar made it impossible from an economic standpoint. Ticket, advertising and merchandise revenue would come in Canadian dollars while the players were getting paid in American dollars. And back in the 90s when $1 CAD was only equal to $0.6 US, any team would take a HUGE hit financially. Now that our dollar is closer to par with the American dollar that financial disadvantage is reduced significantly.

by HamiltonGuy on May 14, 2009 2:50 PM EDT reply actions

Like others have said, your problem here is the comparison between Toronto and NYC. I could draw a comparison between, say, London (which is soccer mad) and Toronto (which is hockey mad) and point out that Arsenal, Chelsea, Fulham, Tottenham, West Ham United and several lower division soccer teams all play there, and why couldn’t Toronto easily support two hockey teams?

But that would be a ridiculous comparison, wouldn’t it? Because the markets are completely different, aren’t they?

by dzuunmod on May 14, 2009 5:30 PM EDT reply actions