OTTAWA, Feb. 9, 2012 /CNW/ - Québec City and Hamilton have the minimum
market conditions to support National Hockey League (NHL) franchises -
which would bring the total number of Canadian cities that have or
could support NHL teams to nine - according to The Conference Board of
Canada's 12th analysis of the professional sports market.
"Future Hockey Day in Canada celebrations could include up to four
all-Canadian matchups if an eighth or even ninth city acquires an NHL
franchise," said Mario Lefebvre, Director, Centre for Municipal
Studies. "However, nine has to be considered the upper limit.
"Let's also be clear that Winnipeg, Hamilton and Québec City have less
of a margin for error than teams in larger Canadian or U.S. cities.
These franchises can be successful as long as they have dedicated
owners who are invested for the long term, manage their business and
markets carefully, and the Canadian dollar remains a strong currency."
This briefing, How Many NHL Franchises Could Canada Sustain? (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-12.aspx), is 12th in the Conference Board's series Playing in the Big Leagues (http://www.conferenceboard.ca/reports/briefings/bigleagues/briefing-1.aspx). It assesses the NHL prospects for Canadian cities using league and
franchise-specific factors, as well as the four market pillars required
for a professional sport franchise, as developed in earlier briefing in
Population Size: Prior to the 2011-12 season, the six existing Canadian
NHL franchises had more than one million people in their Census
Metropolitan Area (CMA). The return of the Jets to Winnipeg brought a
franchise into a CMA of about 750,000 people, which the Conference
Board considers the minimum threshold for a viable NHL team. This
population requirement makes Hamilton and Quebec City the only
potential additional NHL markets in Canada, at least according to this
Market Wealth: This pillar has grown in importance, given the rapid rise
in ticket prices for professional sport events. In per capita income,
Winnipeg ranked 14th among Canada`s 27 largest CMAs in 2010, Québec
City ranked 10th in 2010 and Hamilton ranked 18th. While these three markets are far from the wealthiest in Canada,
Hamilton's per capita income surpassed that of Montréal. Moreover,
Winnipeg and Quebec City ranked ahead of both Vancouver and Montreal in
per capita income.
Corporate Presence - In 2009, Quebec City was home to 17 of Canada's 800
largest corporations and Hamilton had only 10. However, these numbers
are similar to the corporate presence in Winnipeg (30 corporate head
offices) Edmonton (26) and Ottawa (19). The Conference Board concludes
that possessing relatively few head offices does not necessarily
disqualify Québec City or Hamilton as potential markets - especially if
corporate giants from nearby cities (such as Montreal in the case of
Quebec City, or Toronto in the case of Hamilton) become involved in the
A Level Playing Field - The playing field has rarely been more level for
Canadian franchises playing in North American professional sport
leagues. The Canadian dollar is more or less at parity with the U.S.
greenback and the Conference Board expects that the loonie will remain
in this range for the foreseeable future. Federal and provincial
governments have lowered tax rates in recent years, reducing the tax
spread with the United States - welcome news for Canadian franchises.
League factors can also determine whether a franchise is viable. Smaller
markets such as Winnipeg, Quebec City and Hamilton are particularly
affected if franchises in larger cities can outspend them for players.
However, the NHL is a much more welcoming circuit for smaller markets
since the current salary cap took effect in 2005.
At the franchise-level, modern playing facilities are a key variable.
Quebec City has a business plan for a new arena at an estimated cost of
$400 million. Hamilton has an existing building that provides an
initial home for an NHL franchise, but Copps Coliseum would likely need
considerable renovation and upgrading to meet the evolving standard of
The Conference Board's conclusion is therefore that Hamilton and Quebec
City have to be viewed as the only two additional potential markets
right now in Canada when it comes to supporting NHL teams. The prospect
of additional teams in Canada's largest cities has been circulated
among sports business commentators, but the Conference Board does not
view a second franchise as feasible in any of Vancouver, Montreal or
Toronto. Risk of market saturation for both fans and corporate
supporters, combined with territorial issues with existing teams, would
be difficult hurdles for a second team in these cities to overcome. It
should also be noted that any proposed Hamilton franchise would have to
address the territorial claims of nearby NHL teams in Toronto and
In the next edition of the Playing in the Big Leagues series, the
Conference Board will use the full analytical foundation it has
developed over the past year to forecast what the Canadian professional
sport scene could look like in 2030.
SOURCE CONFERENCE BOARD OF CANADA
For further information:
Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448