Professional basketball could rebound in Vancouver

VANCOUVER, June 9, 2014 /CNW/ - Vancouver has the size and wealth to support another major professional sports franchise within the next 20 years. But the sport would be basketball, not a second team in the National Hockey League (NHL), according to Power Play: The Business Economics of Pro Sports, a recently-published Conference Board of Canada book that examines the Canadian pro sport marketplace.

"Although Vancouver's previous basketball experience ended with the Grizzlies franchise moving to Memphis and some ill-will in the city toward the National Basketball Association (NBA), the market conditions exist for another franchise to be successful," said Glen Hodgson, Senior Vice-President and Chief Economist. "With Vancouver's  steady rise in population, high income levels, and a strong corporate presence, the NBA could return one day, especially if the Canadian dollar remains strong."

HIGHLIGHTS

• Vancouver's population is expected to increase by more than one million over the next 20 years and could support another professional sports franchise.
  
• While Vancouver could support franchises in hockey, basketball, soccer and Canadian football by 2035, the market would not be large enough to support a  Major League Baseball franchise or a second National Hockey League team.
  
  

The Conference Board's analysis assesses conditions for successful franchises on three levels:

• market pillars: market size, income, corporate presence, and economic conditions (notably the exchange rate)
• league competitive conditions: including caps on player salaries, revenue sharing, and access to player talent
• franchise specific factors: ownership and management strength, playing facilities, and fan support

When the Grizzlies left following the 2000-01 season, the population of the Vancouver CMA at that time was barely 2 million and the Canadian dollar was on its way to an historic low. In 2012, the Vancouver region had almost 2.5 million people, disposable income per capita was fifth among major Canadian cities, and Vancouver had 94 of Canada's 800 largest corporations (behind Toronto, Calgary and Montreal).

Vancouver's population is projected to increase by more than 1 million over the next 20 years, and it should attract more corporate headquarters in that period.

In addition, competitive conditions in the NBA are relatively favourable for a Vancouver franchise, due to some—albeit modest—constraints on player salaries. The major challenge will be to find committed ownership and astute management. Given that the departure of the previous NBA franchise left hard feelings among many fans and community leaders, new owners would need to rebuild support for professional basketball in the Vancouver market.

By 2035, with a projected population of 3.5 million, the Vancouver market would be large enough to sustain a franchise in each of the NHL, NBA, Major League Soccer, and the Canadian Football League. Even a market of that size, however, would not be likely to maintain support for a Major League Baseball franchise, or second NHL team in the region.

Released in March, Power Play: The Business Economics of Pro Sports is authored by economists (and passionate sports fans) Glen Hodgson and Mario Lefebvre. It examines the economic conditions of the communities that host professional sports franchises, looks at the operating conditions for pro sports leagues, discusses franchise ownership and management, and addresses the politically hot topic of who should pay for new pro sports facilities. It is available in printed and e-book formats.

Join a live webinar by Glen Hodgson and Mario Lefebvre June 18, 2014 at 12:30 p.m.  EDT.

For more information, visit http://www.conferenceboard.ca/powerplay.

SOURCE: Conference Board of Canada

Brent Dowdall, Media Relations, Tel.: [phone] ext. 448
E-mail: [email protected]