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

[GioforPM]

Originally Posted by Cleveland Steam Whistle

Not necessarily in this example. If MGM or one of the other casino conglomarates owned the club the business model is completely changed. The most valuable thing one of MGM's Hockey Ticket holders can do that night is actually skip the game, and head onto the casino floor, while also feeling really good that the MGM gave them free tickets to a hockey game, even if they didn't end up using it.

There is no where a casino would rather have a patron than on the casino floor. The same applies when they give out tickets to any other show. The whole point is to make the customer feel valued, whether they use the ticket or not. Now obviously, there is some balance of if no one uses the tickets, then how much client satisfaction or extra business is being driven by comping the tickets, and therefore how much goodwill is being generated for MGM by the give away that translates into more money spent in their casino.

But don't fool yourself, this is not the typical fill the building with paid tickets and have the fans spend as much money as possible at the concessions business model that it is in the rest of the NHL, this is definitely a: can we use "NHL hockey" to attract, keep or make our casino customers happy model so that they spend as much money at our casino business model.

Yes. I went to Paul McCartney at the MGM. Chatted with the older couple next to us. They'd been comped their tickets by the hotel. Sure enough, they left a fantastic concert half way through. Gotta go earn the next comps.

[Jay Random]

Originally Posted by Cleveland Steam Whistle

But don't fool yourself, this is not the typical fill the building with paid tickets and have the fans spend as much money as possible at the concessions business model that it is in the rest of the NHL, this is definitely a: can we use "NHL hockey" to attract, keep or make our casino customers happy model so that they spend as much money at our casino business model.

If you’re not filling most of the building with paid tickets and having the fans spending money at the concessions, you’re not generating enough revenue for the team to break even. There may well be value in giving hockey tickets to casino customers – but not 18,000 tickets per night, 41 nights a year. The technique cannot be scaled up to infinity.

[Weitz]

As has been mentioned there would not be a whole lot of "comped' seats given out from the casinos.

Casinos give a lot of "comps" but almost all of them have some sort of tie back to their business. Whether it be a show at a partner casino, entrance with a table and bottle service at their casino or what have you.

Casinos do not make money by giving comps to their clientele that has them leave the property and not go to another property under the same umbrella (MGM, Ceasers).

This all changes if the casinos are part owners or have some sort of interest or partnership with the owners. In other words there has to be a financial benefit.

[the_only_turek_fan]

This league is starting to turn into a joke.

[Cleveland Steam Whistle]

Originally Posted by Jay Random

If you’re not filling most of the building with paid tickets and having the fans spending money at the concessions, you’re not generating enough revenue for the team to break even. There may well be value in giving hockey tickets to casino customers – but not 18,000 tickets per night, 41 nights a year. The technique cannot be scaled up to infinity.

I agree with you that it would have to be proven it works, and some form of demand needs to be there, but again, casino's spend billions of dollars on creating state of the art pool complexes, spas, bringing in huge concert acts, building and housing permenant shows like Garth Brooks, Shania, Elton John, Britney Spears, etc....., investing in state of the art hotel rooms............and they don't want their customers to spend a single second in anyone of those investments. The whole point of these very costly expensive things is to attract and keep as many people on the premisis as possible so they spend more money on the floor. And it's a business model that works.

Agreed that incorporating hockey into that is definitely a question mark, but to be honest the business economics at least on the cost side of things certainly don't make you blink your eye when you compare it to some of the other things they do (on-going concerts and such). It will be a wait and see on whether hockey can create the interest and desired reaction from their patrons to make it worth while, but at least you can see the business model / environment that could make it work because they do this type of crap all the time.

[Locke]

Originally Posted by Jay Random

Do I really need to spell out for you the fact that MGM is a red herring in this discussion?

I read it. (I do know how to read, you know. You get no points for assuming that I am either illiterate or imbecilic, so I suggest you dial it the hell down.) The post was explicitly talking about the concession sales:

In other words, MGM or some other company may choose to subsidize the team (in effect) by buying empty seats, but those empty seats will not be as valuable to the owner as occupied seats would be.

Thats not necessarily true...

Many large companies purchase businesses that take losses so as to apply those losses against gains accrued by their much more profitable and thus more highly taxed, primary businesses.

In which case, an empty hockey arena with unpaid seats is in fact applying those losses to very lucrative gambling gains.

If the savings rates are right the parent company could actually profit from holding a losing company.

[DownhillGoat]

Originally Posted by Ozy_Flame

Almost two million Canadians per year visit Vegas, with Torontonians, Calgarians and Edmontonians leading the way.

And how many of those are strictly during hockey season? What tiny fraction of those 2 million are going to go to a hockey game vs gambling/drinking/golfing/any thing else Vegas related?

Quoting the number of visitors to the city is a pointless argument IMO since there's no data on how many of that number would spend their dollars on hockey.

And using the Canadian market argument they're banking on being profitable based on what, 20% of the home games in the season?

I trot out likely way too many Dragon's Den references, but it's no different when the better mousetrap startup company comes out and says "The mousetrap industry is worth 8 billion dollars annually. If we can capture 1% of that we'll be an 80 million dollar company" Sure. But what makes you think you'll capture anywhere close to that 1%?

By similar logic, the NHL sold 21.6 million tickets last year so that means a team in Maple Creek Saskatchewan shouldn't have any problem selling out.

This is going to be Phoenix 2.0. Won't that be a fun division rivalry to watch. 6 local fans, 1 away fan, and 3000 people in Edmonton/Roughriders jerseys.

[troutman]

Craig Morgan retweeted Pierre LeBrun @Real_ESPNLeBrun · 5m 5 minutes ago
Bettman says potential Vegas owner Bill Foley has been given the green light to generate season-ticket drive to see what interest there is

[Jordan!]

Vegas is a horrible city, it's not even a city and the mojave desert is a complete wasteland.

[Cleveland Steam Whistle]

Originally Posted by the_only_turek_fan

This league is starting to turn into a joke.

Expand?

[GioforPM]

I would think it could work from a dollars and cents point of view, at least for a few years until the novelty wore off or the NBA comes to town.

It has a lot more difficult task in terms of generating a hometown fanbase. Is that a problem? I kind of think so.

BTW, while casinos would probably comp NHL tickets to a degree, the arena will not be on any hotel/casino site, as opposed to the concerts, shows, fights, spas etc. So the comparison is not exact.

[Weitz]

The real question is why are they thinking expansion?

Some would argue the talent level is watered down in a 30 league team already.

[Locke]

Originally Posted by Bouw N Arrow

Vegas is a horrible city, it's not even a city and the mojave desert is a complete wasteland.

No kidding. That must be why they vetoed the name 'Mojave Rain Forest.'

That said, Phoenix isnt much different. If you pave their golf courses that place is basically a wasteland too.

[topfiverecords]

Video gambling on the back of each seat and you'll make a ton of revenue.

[sureLoss]

Originally Posted by Weitz

The real question is why are they thinking expansion?

Some would argue the talent level is watered down in a 30 league team already.

because they have an ownership group willing to pay the expansion fee and a completely funded arena

not to mention that the last realignment has left an imbalance in the Western and Eastern conferences

[Cleveland Steam Whistle]

Originally Posted by Weitz

The real question is why are they thinking expansion?

Some would argue the talent level is watered down in a 30 league team already.

Money.

Canadians love hockey so much that the watered down hockey level doesn't impact sales, and American's don't know any better so it doesn't impact sales.

[Locke]

Originally Posted by Weitz

The real question is why are they thinking expansion?

Some would argue the talent level is watered down in a 30 league team already.

$$$$$$

If it sells and generates increased revenues they'd have a team exclusively comprised of circus bears on unicycles.

Actually that would be awesome. Can we have that?

[Finger Cookin]

Originally Posted by sureLoss

because they have an ownership group willing to pay the expansion fee and a completely funded arena

not to mention that the last realignment has left an imbalance in the Western and Eastern conferences

I also think it comes down to existing owners who are eager to pocket expansion fees that don't have to be shared with players.

[troutman]

Originally Posted by Weitz

Some would argue the talent level is watered down in a 30 league team already.

I would debate that point. There is more talent available to the NHL now than there was in the 1980s. There has been a big influx of European players, and there are now more minor hockey players in the USA than Canada.

[Cleveland Steam Whistle]

Just out of curiosity, as I don't know how any of this works down in Vegas, but is there not a major tax win here for the owners? If a casino owned the team, as many have pointed out, they likely wouldn't be making much money directly off the team (concession etc...). The revenue would all be indirect from driving up more business to their existing businesses.

IF this worked out, and it was successful, would the owners actually be able to report a loss on the hockey club, gaining tax benefits, even though it would be driving up revenue for their other ventures?