Thursday, September 4, 2008
NHL is risking a widespread exodus if it keeps raising prices
By Terry Frei Special to ESPN.com
This year, when NHL teams informed season-ticket holders about the terms of their potential renewals for the 2008-09 season, the letters often broke news of price increases -- but with so much spin control between the lines, fans could get dizzy as they read.
Granted, ticket-price increases are right up there on the shock meter with another young movie star entering rehab.
But wasn't it supposed to be different under the salary-cap system that commissioner Gary Bettman and league owners shut down the league for a year to get? Citing the outrageous ticket prices, didn't the league at least imply that it also was fighting for the fans, too, as it took on the NHLPA?
At the 2004 All-Star Game, Bettman was asked if he really had said teams selling out would drop their ticket prices if the league attained its coveted "cost certainty."
"What I said was it varies from market to market," he responded. "The one thing that would not be sensible to do is lower your ticket prices to enrich scalpers. That doesn't make any sense. But the fact of the matter is, more than a majority of our teams would use the opportunity of economic stability to lower their ticket prices."
That didn't happen.
With the recent spate of ticket-price increases, the NHL is risking having fans stay away in droves.
Someone with a spreadsheet could argue the necessity of higher ticket prices, and that lower-end revenue teams need to at least be in the same pricing world as the high-priced Maple Leafs. But the NHL blew its chance to do what in the long run would have been far better for everyone -- aggressively attacking the ticket-price issue, especially in a troubled U.S. economy.
As an individual, you're a bad hockey fan if you now can't justify paying $7,000 for two decent season tickets? As a company, you're miserly if you cut back from eight tickets to two? No. You're prioritizing.
The stunning thing about all this is not that there are many empty seats at NHL games, but that there aren't more. Fans maintain interest, but instead watch more games in front of the big-screen sets. Winning still creates demand, but the price of tickets lessens the margin for error. Exoduses have a way of gaining momentum. The fewer season-ticket holders, the less incentive there is to buy season tickets, even for decent teams. And the slide is difficult to stop.
At least to some extent, the increase in the salary cap in the four seasons of its existence mocks the fans. The cap, tied to revenues, is $56.7 million per team for the upcoming season. It was $39 million four years ago, coming out of the lockout. The money is there, whether it comes directly to the team, or via the league, or through revenue sharing.
Ticket prices keep going up, in part to keep up with the payroll demands created by the rising cap, which includes a floor and also pressures to at least get in a "competitive" payroll realm; and the cap goes up in part because of the additional revenue generated by the increased ticket prices; and
Or is it the other way around?
What matters is that it's a continuing cycle, and the NHL didn't do much to try to stop it after it got its alleged idiot-proof cap system.
The cap has gone up at a far higher rate than ticket prices, but ticket-buying fans have funded at least part of that raising of the ceiling. Teams' short-term quests for increased box-office revenue in the long run can turn out to be counterproductive for the league, in ways both tangible and intangible.
Teams haven't raised prices every year, and I haven't gone back and charted every team's prices in 2003-04 and 2008-09. It also can be tricky because the price per game for season-ticket holders includes a discount on single-game prices. There is a wide disparity of prices around the league. Even that range is part of the problem. One ticket scale can't fit all, and attacking the ticket-price issue with leadership from the league office in the era of revenue sharing would have required more innovation and courage.
But the NHL didn't seem to give that much of a try.
The following is a grab bag of apples (dollar figures) and oranges (percentages), but it gives you an idea. The Los Angeles Kings raised prices roughly 5 to 16 percent. Colorado's prices went up roughly $3 per ticket; for example, a corner loge seat went from $91 to $94. A similar seat costs about 15 percent less at Columbus, but Blue Jackets fans are up in arms over an increase. Calgary gets into triple figures for everything in the lower bowl, but significantly discounts season tickets. Vancouver's prices are going up 7.5 percent, after going up 12 percent the year before. Anaheim announced that its increase was 6.6 percent on season tickets, 7.2 percent for single games. Carolina has eminently "reasonable" prices, especially for a recent Stanley Cup champion -- a lower-level seat at the prime south end of the arena is $55 for season-ticket holders and about $70 on a one-night basis -- but the Hurricanes' prices have gone up roughly 20 percent since 2003-04.
I'm not picking on those teams but picking them out as examples.
Plus, there is the relatively new concept of "premium" games, or having a sliding per-game cost depending on the opponent. Florida, Buffalo and Chicago are among the franchises in that realm, and the Sabres have Value, Gold, Silver and Platinum category games, with the latter being the three games against Toronto and the one against Montreal.
The NHL keeps finding ways to raise prices -- and justify it.
Bettman's stance at the 2008 All-Star Game in Atlanta was that the league hadn't failed to follow through on an implied promise. "What we said was we were in an inflationary system, and the system we were trying to get would mitigate the inflation," he said. He argued that ticket prices had risen minimally in the NHL, but far more in other sports.
But think of the mileage the NHL could have gotten up by backing up its talk with, at the very least, a holding of the line on ticket prices -- or, perhaps more eye-opening, an aggressive rollback in recognition that prices in the NHL were completely out of whack and one of the league's biggest problems.
I never have joined in the chorus of denunciation when teams in "non-traditional" NHL markets don't sell out for rotten products. It seems the folks most often making 100 percent, automatic-sellout support of a hockey team a litmus test for a market's passion often have a press pass hanging around their neck or are eating potato chips and drinking beer in front of their televisions as they watch games, rather than paying the high cost of attending the games themselves.
I get in the games free, all around North America. Still, when I run into or meet acquaintances at the arenas, or buy single-game tickets for friends and family, I see the prices and can't help saying: "How can anybody do this?" Fans are paying circle-the-date, highlight-of-the-entertainment-year prices for a nondescript game in November. And season tickets? It's far beyond an arm and a leg; it's more like having to decide between an ARM and a 30-year fixed.
The Canadian dollar has been strengthened considerably, and that's had a lot to do with the cap going up. Other issues are at work, too, so it is virtually impossible to specify what the 2008-09 cap would be if Bettman and his supporters had carried through on their implied promises.
I know this much. The cap wouldn't be $56.7 million. The benchmarks for everything, from extensions to UFA deals, would be lower. The owners wouldn't be getting as much revenue, but they wouldn't be paying as much in salaries. And wasn't that supposed to be the foolproof aspect of this system?
The NHL went dark for this?
Terry Frei is a regular contributor to ESPN.com. He is the author of the just-released "'77" and of "Third Down and a War to Go."