I’m not sure if it’s hallucinations due to heat stroke or just another dream of striking it rich on the Strip, but it looks like Gary Bettman and the NHL are seriously entertaining the idea of putting another team in the desert.
Whatever the case, I hope they wind up selling the arena rights to the Mirage Hotel & Casino, because boy is the thought of an NHL franchise thriving in Vegas ever an illusion.
The NHL has always been, and will continue to be, a gate-driven league until such a time as it can command a national TV deal in the U.S. Even then, ticket sales will remain a huge proportion of individual team revenues. This means that any new expansion franchise will need a sizeable and sustainable ticket base on which to build its presence in the local market.
Given the culture, demographics and economic realities in Las Vegas, I just don’t see how this can happen.
Sure, the local population base has grown significantly in recent years and is now over 1.9 million in the metro region, making it the 30th largest city in the U.S. But estimates of hockey fans among local residents are in the 100,000 range. When you consider that a solid season ticket base would need to be in the 12,000 range, over 10% of the hockey fans would need to commit to the team on an annual basis.
Making this even harder is the fact that many of these locals work in the gaming industry, which means they are much more likely to be working evenings and potentially unavailble to attend games. So builiding that ticket base among locals is going to be tougher than flopping a straight when you’re all in against pocket aces.
Now, yes, there are also millions of visitors to Vegas every year and they come with pockets full of entertainment dollars ready to spend, mostly on dreams of winning it all, but ultimately leaving empty handed and dejected…hmm, come to think of it, they sound a lot like Leafs’ fans:
But by definition, those types of casual, transitory hockey fans cannot form part of the season ticket base. They are only there for a weekend or maybe a week. They might got to a game, just like they would go to a show. But that’s it. You can’t rely on them to build a franchise around. You’re talking about a major investment in infrastructure, franchise fees and annual operating costs that need to be supported every year. No savvy business manager is going to do that on spec.
Ah, you say, but won’t the casinos buy up huge blocks of seats to comp and or otherwise attract people to their gaming tables?
Yeah, because casinos want to send their customers to a different venue for three hours.
The entire reason those hotels have entertainment on-site, and comp hotel rooms is to draw TO their gaming floors, not to send them somewhere else and hope that they magically return to their slot machines.
No, if anything, the only way that this model would work is if the arena development includes a hotel and gaming floors, and they are the ones that comp out tickets to the games. But then you’re really talking about a completely subsidized ticket base using the games as a loss leader to boost gambling at their venue.
But if that’s your business model, not sure there’s a great return on the $500 million expansion fee the NHL is asking for…
So yeah. While expansion to Vegas sounds great in concept, like most things related to Vegas, the odds are stacked against it.
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