PROFESSIONAL TEAM SPORTS IN CANADA MORE THAN A PASSION - IT IS A BIG BUSINESS

OTTAWA, Feb. 25 /CNW/ - Professional sport is a big business in Canada, not just a passion for fans. Revenues for Canadian professional sports teams could easily exceed $1.5 billion annually, according to the first in a series of reports assessing the professional sports market in Canada. The Conference Board of Canada series is entitled: Playing in the Big Leagues: What Makes a Professional Sports Team Successful in Canada?

"Like sport fans everywhere, many Canadians individually and collectively hold a deep emotional attachment to "their team" or teams," said Glen Hodgson, Senior Vice-President and Chief Economist.

"These teams, however, are not just sources of civic and personal pride - or misery. They are businesses. The emotion of fan support can sustain a team in the short term, but with few exceptions, economic forces rule and a franchise must be financially viable over the longer term."

In the initial briefing, entitled The Pro Sports Market in Canada (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-1.aspx), The Conference Board of Canada provides an assessment based on the estimated revenues of six National Hockey League (NHL) teams, eight Canadian Football League (CFL) franchises, and one team each in Major League Baseball (MLB), the National Basketball Association (NBA), and Major League Soccer (MLS).

The available data suggest that the six Canadian NHL franchises generate about $750 million in revenue within the Canadian economy, although there are sharp differences among the teams in terms of operating income.

Public financial reporting from three community-owned CFL franchises (Edmonton Eskimos, Saskatchewan Roughriders, Winnipeg Blue Bombers) suggests that league generates annual revenues between $120 million and $150 million. Again, the revenues and earnings vary significantly among the eight teams.

The Toronto Blue Jays (MLB) and Toronto Raptors (NBA) also generate significant annual operating revenues. Forbes magazine indicates that these two franchises together generate $300 million in annual revenue, and both operate profitably.

The three MLS franchises - one currently in operation, with two more to join the league over the next two years - will generate additional pro sports revenues in the future. The three National Lacrosse League franchises in Canada and various minor-league teams also generate revenue. Curling could be added to the list of team sports that generate significant revenue and local economic benefits. And the World Junior Hockey Championships have almost become an annual event in Canada.

Non-team pro sporting events like golf, tennis, motor sports, boxing and mixed martial arts also generate significant revenue in Canada. The most lucrative once-a-year professional sport event in Canada is almost certainly the annual Formula One (F1) event in Montreal. The Conference Board estimates that ticket sales alone to attend the F1 event in Montreal might reach $40 million, even before the significant economic multiplier benefits for the community.

An estimation of economic multipliers from pro sports would add to the impact on the broader Canadian economy, although "leakages" occur from any business sector in the form of money that leaves the economy, such as through imports. Deeper economic analysis would be required to assess these impacts for communities, regions, and for the economy as a whole.

Throughout 2011, two senior members of The Conference Board of Canada's Economic and Forecasting Division, (Hodgson and Mario Lefebvre, Director, Centre for Municipal Studies) will publish a series of briefs to examine the professional team sport market in Canada. Using both economic analysis and extensive personal knowledge and interest, the publications will address topics such as:

  • What it takes for a city or region to be home to a successful professional sport franchise;
  • The politically-charged question of who should pay for new playing facilities - and the possible role for the public sector;
  • The emotional issue of why the Montreal Expos (MLB), Quebec Nordiques (NHL) and Winnipeg Jets (NHL) franchises moved south of the 49th parallel - not always to greener pastures;
  • Whether these franchises could realistically come back to a Canadian home; and
  • The underlying conditions for business and competitive success for a pro sport franchise in Canada. 



SOURCE CONFERENCE BOARD OF CANADA

For further information:

Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448
E-mail: corpcomm@conferenceboard.ca

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