[News] Update: NHL green lights season-ticket drive for Las Vegas

[Jay Random]

Originally Posted by Locke

2) Wynn, Ceaser's Ent., MGM, Sands? I think they're worth north of $10B each.

How much their market cap is does not necessarily tell you how big their casino floors are, or how many additional customers they could cater to with comped event tickets. We’re definitely talking about doing things on a much larger scale than anybody is doing now.

If a bunch of casino owners formed a consortium (I almost used the word ‘syndicate’, but let’s not), they could probably soak up the necessary number of tickets. But then the casino attached to the arena would get most of the business from those customers who actually did show up at the games, so it would not be good business for the other members of the consortium.

It’s a thorny problem.

When you come down to it, the expenses of an NHL team are so high that an owner in Vegas will still need a pretty large base of old-fashioned season-ticket holders who actually use their own tickets. If the actual fan base is as bad as Phoenix or Florida, all the comping in Vegas may not be enough to save the franchise.

[Phanuthier]

Originally Posted by Cleveland Steam Whistle

No, because the whole point is to get you to go to Vegas to see the game, and then spend all your money gambling instead. In this business model the price of the ticket really becomes irrelevant.

well my question would be, will the revenue of a NHL team bring in more revenue due to foot traffic to/from a NHL game .... versus the shows they have now?

Maybe I'm wrong here, but I think a decade ago, they banked on things like cheap food / events / themes to traffic through their casino's and increase revenue. The past 10 years, I think they are changing that model of success (or if they are even focusing on Vegas)..... I don't gamble, so I don't know much about comps or the behavior of comps, but I do notice that Las Vegas entertainment is pretty expensive, so they aren't being as charitable with their entertainment as they used to be to generate foot traffic.

Also.... I think they really have to be banking on the Fri/Sat nights to get both (a) attendence, (b) comps for people to go see the shows. Past the weekend, its a lot more dead. And even then, I would think that when you are on vacation to go somewhere, you would want to be doing something different then what you normally do at home..... but I do recognize that I could be entirely wrong and people don't get enough of the 41 games home games as STH that they will travel to go see even more games.

[Jay Random]

Originally Posted by Realtor 1

You won't have to. It will be free to stay at _____ casino's.

You will profit the casino enough over your 3 day stay for them to fully justify free tickets to a panthers game.

But if you don’t want the tickets in the first place, why would you stay at _____ casino just for the sake of getting those tickets? I would rather go somewhere that gave me comped tickets for an event I actually wanted to see.

[Phanuthier]

Originally Posted by Jay Random

How much their market cap is does not necessarily tell you how big their casino floors are, or how many additional customers they could cater to with comped event tickets. We’re definitely talking about doing things on a much larger scale than anybody is doing now.

If a bunch of casino owners formed a consortium (I almost used the word ‘syndicate’, but let’s not), they could probably soak up the necessary number of tickets. But then the casino attached to the arena would get most of the business from those customers who actually did show up at the games, so it would not be good business for the other members of the consortium.

It’s a thorny problem.

When you come down to it, the expenses of an NHL team are so high that an owner in Vegas will still need a pretty large base of old-fashioned season-ticket holders who actually use their own tickets. If the actual fan base is as bad as Phoenix or Florida, all the comping in Vegas may not be enough to save the franchise.

I think the question that is asked by a smart businessman is, will said expensive (NHL team) be able to help me capture more market share then I already have? In the end, will I end up with more revenue or less?

or are their other reasons? are they trying to finance a permanent tenant to pay for a arena to do other things like MMA, etc? or this is their launch pad to a bigger prey, i.e. the NFL?

[Ozy_Flame]

Originally Posted by kunkstyle

Understood, but IMO relying on tourism is a horrible model for an NHL team as I don't think any numbers will be able to support that.

It's not a fallacy to assume that a group of Calgarians would fly out for a game or go to a game when they're there, but it does not make for a solid business plan.

I hope I'm wrong, but I see nothing but failure for a team in Vegas. Cup contenders or not.

There's going to have to be an element of banking on tourism dollars as part of a risk strategy around a new market pro sports team. That is the draw, especially with the location of a new arena being located on the Strip.

There is likely going to have to be some "bridging" going on in ticket sales between tourism and hometown dollars, especially over a projected 3-5 year strategy. And the team is going to have to come strong out of the gate, so as not to fall into that desert-graveyard stigma that Arizona has fallen into.

However, the Las Vegas metropolitan area (Las Vegas-Paradise area) has a population of 1.9 million. And it's sort of an untapped market in terms of pro sports potential. And hockey has shown to be stable there, at least on relatively minor levels.

You have to think though, that with Vegas in the mix, there could be some net benefit for Phoenix too, in that hometown fans may establish a rivalry (especially if they're in the same division). I don't think it's out of the question to assume that, with two competitive teams (reaching high, I know), something couldn't be built on that Vegas/Arizona regional foundation.

I guess I'm just optimistic about Vegas' chances. But I think it's a great idea to try and put a team there, especially with all the ways to deliver/sell tickets and marketing opportunities into that city; worse comes to worse, move them out.

My only concern is that the team should be a franchise move, not an expansion. It cuts into the revenue-sharing pie for each team for TV deals, and dilutes the talent base.

[ExiledFlamesFan]

This has disaster written all over it from a demographics point of view.

Las Vegas is:
-a very small city by American standards
-uneducated, not very white (important predictors of american fans) 47% white, 42% black and hispanic
-poor
-the biggest employer is the service industry with terrible hours

The NHL is really hoping for double zeros on this gamble.

[Cleveland Steam Whistle]

Originally Posted by Phanuthier

well my question would be, will the revenue of a NHL team bring in more revenue due to foot traffic to/from a NHL game .... versus the shows they have now?

Maybe I'm wrong here, but I think a decade ago, they banked on things like cheap food / events / themes to traffic through their casino's and increase revenue. The past 10 years, I think they are changing that model of success (or if they are even focusing on Vegas)..... I don't gamble, so I don't know much about comps or the behavior of comps, but I do notice that Las Vegas entertainment is pretty expensive, so they aren't being as charitable with their entertainment as they used to be to generate foot traffic.

Also.... I think they really have to be banking on the Fri/Sat nights to get both (a) attendence, (b) comps for people to go see the shows. Past the weekend, its a lot more dead. And even then, I would think that when you are on vacation to go somewhere, you would want to be doing something different then what you normally do at home..... but I do recognize that I could be entirely wrong and people don't get enough of the 41 games home games as STH that they will travel to go see even more games.

I don't mean this in a patronizing way, but you are totally asking all the right questions in my mind.

I think there are two worlds that go on in Vegas, one, where they get people to come down and pay extravagant fees for shows, events ect.... and the second where they simply give you the "#### for free" swingers style if you spend on the floor. I'm more like you, I don't gamble that much in Vegas, although enough IMO to help them out but I would pay a decent dollar to see the Flames in Vegas as part of a trip. Then, there are the tickets they are going to give away to the people that do gamble and get significant comps (I have a buddy who is in this category and I've seen it in action) who they use these type of things to entice them back on trips, or keep them happy while they are in town, all so they spend more money.

I think both would be part of the success plan.....IF it was to be successful. Again, I think you are right on questioning it for the reasons you are, that will be the determining factor is how it all plays out, but for me, the fact that this is the business model required to succeed makes me feel like it's got a lot better chance than Florida and Arizona, who bank on actual local fans supporting the team. IF it's going to work in the sunny south, this model has more legs in my mind.

[Cleveland Steam Whistle]

Originally Posted by ExiledFlamesFan

This has disaster written all over it from a demographics point of view.

Las Vegas is:
-a very small city by American standards
-uneducated, not very white (important predictors of american fans) 47% white, 42% black and hispanic
-poor
-the biggest employer is the service industry with terrible hours

The NHL is really hoping for double zeros on this gamble.

They wouldn't be counting on any of those things to succeed though, so it's kind of irrelevant. This isn't going to be a come out and support your local team play.

[Phanuthier]

Originally Posted by Ozy_Flame

There's going to have to be an element of banking on tourism dollars as part of a risk strategy around a new market pro sports team. That is the draw, especially with the location of a new arena being located on the Strip.

There is likely going to have to be some "bridging" going on in ticket sales between tourism and hometown dollars, especially over a projected 3-5 year strategy. And the team is going to have to come strong out of the gate, so as not to fall into that desert-graveyard stigma that Arizona has fallen into.

However, the Las Vegas metropolitan area (Las Vegas-Paradise area) has a population of 1.9 million. And it's sort of an untapped market in terms of pro sports potential. And hockey has shown to be stable there, at least on relatively minor levels.

You have to think though, that with Vegas in the mix, there could be some net benefit for Phoenix too, in that hometown fans may establish a rivalry (especially if they're in the same division). I don't think it's out of the question to assume that, with two competitive teams (reaching high, I know), something couldn't be built on that Vegas/Arizona regional foundation.

I guess I'm just optimistic about Vegas' chances. But I think it's a great idea to try and put a team there, especially with all the ways to deliver/sell tickets and marketing opportunities into that city; worse comes to worse, move them out.

My only concern is that the team should be a franchise move, not an expansion. It cuts into the revenue-sharing pie for each team for TV deals, and dilutes the talent base.

just to clearify (I think you mentioned this before) but are you additionally banking on people from Pheonix to help support (i.e. travel to Las Vegas to support their team in Vegas) a Las Vegas team...?

[Ozy_Flame]

Originally Posted by Phanuthier

just to clearify (I think you mentioned this before) but are you additionally banking on people from Pheonix to help support (i.e. travel to Las Vegas to support their team in Vegas) a Las Vegas team...?

No. It is a pie in the sky idea since neither would be a huge market. But Las Vegas is as good as a "up the road" dance partner as Arizona will ever see, or at least anything resembling a "desert rivalry" that fans can buy into. I don't think they've really had a rivalry since they moved there almost 20 years ago.

[Phanuthier]

Originally Posted by Ozy_Flame

No. It is a pie in the sky idea since neither would be a huge market. But Las Vegas is as good as a "up the road" dance partner as Arizona will ever see, or at least anything resembling a "desert rivalry" as one can get.

I think Las Vegas gets a lot more traffic from LA then PHX.... on a non-long weekend, probably half...?

[Ozy_Flame]

Originally Posted by Phanuthier

I think Las Vegas gets a lot more traffic from LA then PHX.... on a non-long weekend, probably half...?

That's true, but I guess it doesn't really matter. Arizona will not displace the LA/Anaheim or greater California rivalry, and I don't even see Arizona in the NHL anymore within 10 years. Hello Seattle.

[Locke]

Originally Posted by Ozy_Flame

That's true, but I guess it doesn't really matter. Arizona will not displace the LA/Anaheim or greater California rivalry, and I don't even see Arizona in the NHL anymore within 10 years. Hello Seattle.

No Kidding. To this day I dont see how Atlanta got moved so easily but the NHL will scratch and claw to keep Phoenix in the league.

[Phanuthier]

Originally Posted by SofaProfessor

A $500 million expansion fee seems steep, but they'll make it back from Vanek the first time the Wild roll through on a road trip.

you may joke, but other things like this are what I might be able to see as reasons for both sides to do it

For Las Vegas? maybe players gambling at the local facility, or other things : a permanent resident to help finance a team (tougher financing due to 2009? remember those hotels got into major financing problems)....a pathway to one day entering the NFL....

For the NHL? Just a trial run to try and extend the fan base, if it fails, they'll just move the team....

For reasons like above, OK I can see it and understand where they are going....

[MisterJoji]

Originally Posted by Jay Random

Again, the Phoenix Roadrunners’ attendance record was fairly steady for the six years (1991–97) for which hockeydb.com has data. And it was better than Las Vegas has now: an average of about 6,000 per game. Sure enough, the Coyotes managed to attract double those numbers after they came to town – but that was not enough fans, nor at high enough ticket prices, to save the team from a financial bloodbath.

I don’t get why hockey in Phoenix is doomed because it can’t work in the desert, but hockey in Las Vegas is a sure-fire success.

Phoenix had a good attendance when they still played at America West Arena due to its actual location in Phoenix. Despite having terrible sight lines for a hockey game, the proximity of its downtown location drew a minimum of 88% capacity for its first 5 years. Moving them 90 minutes away, on the outskirts of Glendale, is what really hurt the attendance and thus their finances. Given that the new Vegas arena is in a central location and not say, in Henderson, they should be able to fill the seats.

[Phil Russell]

The NHL will milk "first in to Vegas" for everything its worth. The expansion revenue and novelty will wear off in a year or two and then we will be stuck with Phoenix 2.0 minus the suburbanites and snowbirds. Bad idea.

[ExiledFlamesFan]

Originally Posted by Cleveland Steam Whistle

They wouldn't be counting on any of those things to succeed though, so it's kind of irrelevant. This isn't going to be a come out and support your local team play.

The NHL isn't counting on any local fan base at all? And you don't see a problem with this!?

Sports teams do not succeed without a local fanbase

[Resolute 14]

Originally Posted by Locke

No Kidding. To this day I dont see how Atlanta got moved so easily but the NHL will scratch and claw to keep Phoenix in the league.

Because there were always groups interested in operating a team in Phoenix.

There was no serious interest in Atlanta.

The same situation played out in Winnipeg in the 90s. 1994-95 was supposed to be the last year before the Jets moved to Minnesota. But when a credible opportunity for ownership opened up, the league held off. When that opportunity failed and no serious interest had replaced it, off to Phoenix the Jets went.

The other large difference is merely optics. the NHL was working behind the scenes for a long time to find an owner for the Thrashers. Atlanta Spirit never wanted the hockey team in the first place, and it was seven years from that purchase until the team relocated. Phoenix would have played out the same way except for Jim Balsillie's bankruptcy stunt. Much of the NHL's public fight for the Coyotes had to do with quashing the threat Balsillie's plan represented to every league's ability to control where their teams operate.

[Resolute 14]

Originally Posted by ExiledFlamesFan

The NHL isn't counting on any local fan base at all? And you don't see a problem with this!?

Sports teams do not succeed without a local fanbase

I think the NHL would be counting on a local fan base. But they might be thinking the tourists would supplement what would likely be a base similar to Phoenix. Dunno.

For my part, if this gets off the ground, I'm trying to get to their first home opener, and I am definitely going to a Flames game there. So that's one or two times the hockey team would draw me down - where I wouldn't make any plan to otherwise - but unless they draw a couple hundred thousand such fans a year, could be interesting.

[Vulcan]

Originally Posted by Resolute 14

Because there were always groups interested in operating a team in Phoenix.

There was no serious interest in Atlanta.

The same situation played out in Winnipeg in the 90s. 1994-95 was supposed to be the last year before the Jets moved to Minnesota. But when a credible opportunity for ownership opened up, the league held off. When that opportunity failed and no serious interest had replaced it, off to Phoenix the Jets went.

The other large difference is merely optics. the NHL was working behind the scenes for a long time to find an owner for the Thrashers. Atlanta Spirit never wanted the hockey team in the first place, and it was seven years from that purchase until the team relocated. Phoenix would have played out the same way except for Jim Balsillie's bankruptcy stunt. Much of the NHL's public fight for the Coyotes had to do with quashing the threat Balsillie's plan represented to every league's ability to control where their teams operate.

The only groups interested in buying the Coyotes were hoping to get something for nothing because they knew staying in Phoenix had gotten personal for Bettman. Eventually yeah, someone stepped up with some strange financing but it hasn't taken long for them to try and get out.

As for Balsillie, all Bettman had to do was okay the move, other leagues didn't take it to court, but he chose to fight even though it made no business sense. Like most sports ownership it comes down to stroking egos and the Coyotes are all about Bettman's ego.