AN ALL AMERICAN PLAYOFFS FOR CANADA’S NATIONAL PASTIME

 

This year marks the first time since 1970 that the NHL playoffs will have 0 Canadian teams. While some

Americans will joke that 7 of 16 playoff teams hail from warm-weather climates (ANA, DAL, FLA, NSH, LA & SJ) it is no laughing matter for Canadian broadcaster Rogers. Before the 2014 season the company purchased exclusive rights to broadcast NHL games in Canada for $5.2B CA for 12 years. Things were looking good last year when 5 Canadian teams made the post-season and ratings were up 36% from 2014. No Canadian however, team made it past the 2nd round however, and ratings began to slip. Detlev Zwick, a marketing professor at York University projected a 30%40% drop in viewership this year (CBC.ca 2/24/16). In actuality, Canadian ratings for the first round of the playoffs were down 60% (Bleacherreport.com 4/28/16) Canadian tradition Hockey Night in Canada opened the playoffs with 721K viewers, down from its avg of 2 M. It is estimated that this will cost the company $10 M in ad revenue (Yahoo, 4/13/16). Rogers has been cutting jobs since January when it laid of 200 employees and are preparing to cut another 110 this month. Rogers’ subsidiary Sportsnet president Scott Moore says that they are hopeful that rebuilding franchises like TOR and EDM will soon be cup contenders and thus boost TV ratings (theglobeandmail.com 4/12/16) and the ad revenue that goes with it.

 

T-1 Economic Impact of 2015 NHL Playoffs CAN

Home            Economic Impact

Team            Games                         $M

CAL 2 $6
MON 6 $18
OTT 3 $9
VAN 3 $9
WIN 2 $6

Total                 16                              $48

 

 

Aside from losing ad revenue, the host cities are deprived of playoff action and all the benefits that go along with it as the Pittsburg Penguins and San Jose Sharks found out OUCH! WSJ estimated the economic impact of a playoff game is about $3 M, which worst case scenario (a 4 game sweep in the 1st round) is still $6 M. As T-1 above shows, missing the playoffs cost these 5 Canadian cities an estimated $48 M! WOW!! Further, the Stanley Cup Finals accounts for $5 M in economic impact per home game (NBC Sports). An optimal Stanley Cup run could result in $56 M in economic impact if every series went 7 games and the winner had home-ice advantage throughout.

 

Congrats to the Pittsburg Penguins for their Stanley Cup win, and to the San Jose Sharks for a hard played series, and bringing in $15 M to their city.

 

Importance of Hockey to Canadians

82% of Canadians think hockey is important to their culture, less than 5% think hockey is not important at all. Toronto is the largest market in NHL with its 9.70 M population 5.1 M are avid fans (52%) followed by USA’s top market of New York/New Jersey a 19.80 M population with 2.5 M avid fans (13%). Montreal (2.28 M fans) and Vancouver (2.26 M fans) are the 3rd and 4th NHL Market. In the 7 Canadian markets with teams they account for 13 M+ fans over half of the 27 markets.

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About bernacmd

For over 24 years, University of Detroit Mercy Marketing Professor Michael Bernacchi, Ph.D., J.D, has produced "uNDER tHE mIKE-rOSCOPE", a newsletter discussing current "marketing and advertising¹s bends, trends & ends." A well-know fixture in Detroit and national media, UDM's marketing guru has made several appearances on CNN's "Talk Back Live," the Voice of America worldwide radio network (VOA), ABC, CBS, NBC, MSNBC and on the pages of Sports Illustrated, Time, TV Guide, the New York Times, USA Today, the Wall Street Journal and the Washington Post, to name a few. At University of Detroit Mercy, he has taught courses in Marketing Management, Consumer Behavior, Marketing Communications, Research and Corporate Social Responsibility and Sports and Entertainment Marketing. Michael Bernacchi can be reached at 313-993-1116 or bernacmd@udmercy.edu. Please appropriately attribute the following for their work on uNDER tHE mIKE-rOSCOPE: Yen Ju Lee Robert Rouse Vidhyasagar Natarajan Eric Baumgardner & Ian Young
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