BY MATT LUNDY FOR SPORTSNET.CA
CanadianBusiness.com, Editor
Few people can compliment millions and still manage to offend. Gary Bettman, however, is one of those people.
Last week, the National Hockey League’s commissioner was asked if he worried about fans deserting the league should it suffer a third lockout during his tenure. First, he answered that cancelling games is a last resort, though it would be inevitable if a new collective bargaining agreement isn’t reached. “And two,” he said, “we recovered well last time because we have the world’s greatest fans.”
Sure, Bettman tried to pay a compliment, but the implication didn’t go over well. The Globe and Mail’s Bruce Dowbiggin said, “An honest reading of this beauty is more like: ‘If you fans weren’t such doormats, I might be worried.'”
Say what you will, but Bettman is right about NHL fans — at least when it comes to their track record in bolstering the league following lockouts. After the two previous labour stoppages, the NHL immediately increased its per game attendance figures, squashing any concerns about fleeing customers.
In the lockout-shortened season of 1994-95, each game averaged 50 more people in attendance compared with the previous season. The results were more impressive for the 2005-06 season, the first full year of hockey under the expiring CBA. The NHL reported an a 2.4 per cent increase in attendance over the 2003-04 season, and in the process, the league averaged a record 16,955 fans per contest. For the next three years, the NHL continued breaking its regular season attendance records.
Of course, ticket sales form a big chunk of the hockey-related revenues that owners and players are currently fighting over. Earlier this year, the Toronto Star received leaked financial data and found that ticket revenues totaled US$1.2 billion for the 2010-11 season, or about 41 per cent of overall revenues, assuming a reported $2.9 billion intake.
Since the previous lockout, Canadian teams have played a big role in ticket revenue growth and currently account for one-third of league-wide ticket sales. For the 2010-11 season, the Montreal Canadiens brought in about $2 million in gate receipts per game, edging the Toronto Maple Leafs for first position.
There are numerous theories as to why the NHL has rebounded from lockouts so successfully. For instance, eight new hockey arenas opened between 1994 and 1996, and generally speaking, new venues lead to increased attendance. Following the 1994-95 season, the Quebec Nordiques moved to Colorado, which kick-started several years of consecutive sell-outs in Denver. After the most recent lockout, the league made several rule changes that helped increase scoring. Not to mention the post-lockout NHL featured a fresh crop of marketable players, like Sidney Crosby and Alexander Ovechkin. All these factors likely had a positive impact on attendance.
Still, some people give credit to the die-hard nature of hockey fans.
“Because of the makeup of the NHL fan base, the league is less volatile than others when work stoppages occur,” said Paul Swangard, managing director of the University of Oregon’s Warsaw Sports Marketing Center, in a 2005 article from ESPN.com. “Baseball lives and breathes off the casual fan that hockey just doesn’t have.”
However, fan devotion isn’t limited to just the NHL.
“If you look at most sports strikes, you really do see a big bounce back right away,” says Victor Matheson, an economics professor at the College of the Holy Cross in Massachusetts. “You don’t really have any lingering resentment on behalf of the fans.”
In The Wages of Wins, a book co-authored by three American economics professors, its writers debunk sports myths, including the notion that spectators desert leagues after labour disputes. One example they use is the late 1990s labour turmoil in the National Basketball Association. In the first full season after the 1998-99 NBA lockout, each team averaged a total of 10,000 less fans in attendance for the year. Naturally, some would blame the lockout for that decline.
“Actually, this wouldn’t be correct,” the authors write. “We really can’t be sure that drop in 10,000 fans was due to a lockout, or just part of the typical pattern we observe in league attendance. Although attendance generally rises, declines do occasionally happen.”
In order to test the impact of strikes and lockouts, sports economists use intervention analysis, meaning they test for disruptions that affect a series of data — in this case, labour stoppages upon attendance figures. After employing intervention analysis to several post-lockout and post-strike environments, the consensus is that fans don’t walk away from the games they love.
That said, there’s some debate about attendance levels following the 1994-95 baseball strike. It took several years for Major League Baseball to regain its pre-strike attendance numbers, and even then, Matheson believes the baseball strike had a more pronounced effect than advertised. In 2006, he published a study in the journal Applied Economics that tested the impact of new stadiums on MLB attendance, and whether the novelty of new venues was the reason for baseball’s perceived recovery.
Matheson notes that by 2004, 19 of 30 MLB teams were playing in stadiums built or significantly renovated since 1989. Of course, new stadiums appeal to consumers. “In the 14 stadiums constructed for non-expansion teams between 1989 and 2004,” Matheson writes, “the increase in attendance (after accounting for strike years) between the debut season and the previous season averaged 780,000 fans or roughly 34 per cent.”
“We should have had big growth in Major League Baseball attendances throughout the (1990s) as you built all these fancy new stadiums. And you didn’t actually see that,” says Matheson. “It looks like we actually did have a pretty significant fall in attendance after the strike that was masked by the huge building boom that got fans back in [stadiums].”
Statistically speaking, Bettman has every right to assume fans would cushion his league once again. But if the current CBA expires on Sept. 15 without a resolution, the resulting lockout would be the third in the last 18 years, all under Bettman’s tenure.
So is it possible that the NHL has run out of recoveries?
After Bettman’s first lockout, it could be argued that the NHL recovered because of the arena boom. After his second lockout, it could be argued the NHL got lucky with its infusion of new talent.
But it might be that sports fans crawl back to the leagues they support, no matter what battles are fought between millionaire players and billionaire owners. The research certainly says so.