Winnipeg Jets unlikely to fly away again, experts in pro sports say

February 27, 2024 Canuck

There’s little danger of Winnipeg losing a National Hockey League franchise a second time, experts in the business of professional sports say in the wake of comments about low ticket sales from Jets co-owner Mark Chipman.

After selling out almost every game for the first nine seasons after the NHL returned to Winnipeg, average attendance at home games this season is 13,140 fans, which works out to 86 per cent of the hockey seating capacity at Canada Life Centre.

Some of the tickets the Jets are selling are discounted, such as $29 seats the club has offered to university students via text message for Tuesday night’s game against the St. Louis Blues.

Gross ticket revenue for all events at Canada Life Centre — including the Jets, Manitoba Moose and concerts — appear to be down almost 20 per cent since 2019, according to entertainment-funding tax estimates included in City of Winnipeg budget documents.

The most concerning stat concerns season ticket sales, which were capped at 13,500 when the NHL returned to Winnipeg in 2011. Those season tickets now number approximately 9,500, The Athletic reported on Friday.

“I wouldn’t be honest with you if I didn’t say, ‘We’ve got to get back to 13,000,'” Chipman told The Athletic. “This place we find ourselves in right now, it’s not going to work over the long haul. It just isn’t.”

There are many reasons the Winnipeg Jets lost nearly a third of their initial season-ticket base. The drop in demand first became noticeable in 2019, when it suddenly became easy to purchase a ticket to almost any given Jets game.

This phenomenon accelerated during the COVID-19 pandemic, when some ticket-buying fans suddenly found themselves out of a job — and others determined they’d rather spend money in other ways when the cost of living began to skyrocket.

“Whenever the economy slows down a bit, at the margins, you start having the impact,” said Glen Hodgson, an Ottawa-based economist and co-author of Power Play: The Business Economics of Pro Sports.

In Winnipeg, the passion for hockey runs up against economic realities, said Hodgson, a former Manitoban himself.

“Clearly the fan base cares very deeply, but Winnipeg was always going to be a challenging market long-term because of its size of less than one million people, income levels, and also the absence of some big head offices that would buy the boxes and buy the advertising,” Hodgson said.

David Thomson, left, and Mark Chipman give the Winnipeg Jets one of the NHL’s wealthiest ownership groups. (Tyson Koschik/CBC)

But there was another reason for the drop in sales: True North was doing a poor job keeping existing ticket buyers happy, something Chipman conceded in the Athletic interview.

“For 10 years, we weren’t a sales organization. We were a service organization, and I’m not sure we were that good of a service organization, to be honest with you,” he said.

Chipman was not available to speak to CBC News, a spokesperson said.

Winning back buyers

In an effort to win back corporate ticket buyers, the Jets enlisted dozens of young business people in December to help sell tickets to their peers. This was a savvy move for Chipman, said Norm O’Reilly, a sports marketing professor and dean of the business school at the University of Maine in Portland.

“He’s got to be very, very cautious about, you know, putting their feet to the fire,” said O’Reilly, who’s also co-author of Business the NHL Way: Lessons from the Fastest Game on Ice.

“I think it was a very smart and a very casual ask of the business community to step up.”

In a move out of the playbook of Dallas Mavericks owner Mark Cuban, Chipman is also calling up individual former ticket buyers to ask what he could do to win back their business.

“I told him it would be nice to see [Jets winger] Nikolaj Ehlers come around the neighbourhood,” said Doug Hemmerling, a former ticket holder who received a call from Chipman.

Ehlers couldn’t make it, but Chipman himself showed up Monday afternoon at Hemmerling’s front door — with centre Mark Scheifele and defenceman Josh Morrissey in tow.

“They sat around the fire in the backyard with about 20 or 25 people from the neighbourhood,” Hemmerling said. “It’s pretty impressive, from a Winnipeg perspective, just to show his commitment to keeping the team here.”

Reasons to stay grounded

But are the Jets actually in danger of leaving Winnipeg? Hodgson and O’Reilly say that prospect is highly unlikely, even if True North owners Chipman and David Thomson — the latter being one of the wealthiest people on Earth — lose money on hockey operations for several years.

“Right now, I wouldn’t think the risk of departure is serious,” said Hodgson. “I think there’ll be a lot of negotiation, a lot of efforts to try to keep the Jets in Winnipeg for as long as possible.”

For starters, True North and its real-estate wing have invested hundreds of millions of dollars in downtown Winnipeg through its construction of Canada Life Centre and True North Square, and its partnership in the Centrepoint development north of Portage Avenue.

“Having an NHL team gives you an anchor tenant,” Hodgson said.

True North also receives municipal and provincial subsidies, which include a $576,000 property-tax break on Canada Life Centre, a $246,00 business-tax refund, and the ability to collect $6.5 million worth of entertainment taxes on events at the arena.

True North may also collect as much as $5.5 million in annual revenue from 140 gaming machines at the Shark Club inside Cityplace mall. Former premier Greg Selinger’s NDP government said it created this funding arrangement to help True North survive future economic challenges.

The NHL itself chips in through revenue sharing, O’Reilly added.

“That really mitigates the risk for David Thomson and Mark Chipman and company in Winnipeg,” he said.

NHL Commissioner Gary Bettman answers questions from members of the media during a press conference during the All Star break, in Toronto, on Feb. 2, 2024. — NHL Commissioner Gary Bettman is slated to speak to Winnipeg media and fans prior to a Tuesday game between the Jets and St. Louis Blues. (Evan Mitsui/CBC)

The NHL itself also has little interest in seeing any franchise move, added O’Reilly, as relocation fees do not generate as much money for existing team owners as expansion fees do — and may prevent franchises from growing in value.

The Seattle Kraken, the last team to join the league, paid $650 million US for the privilege in 2021.

Winnipeg, the last NHL team to move, cost True North $170 million US in 2011 — $110 million to buy the former Atlanta Thrashers and $60 million as a relocation fee. Forbes now estimates the franchise’s value at $780 million.

“They really don’t want those failed franchises. A stable league is good for the owners’ interests and good for the commissioner’s reputation,” O’Reilly said.

Bettman to speak before Blues game

Gary Bettman, the NHL’s commissioner, is slated to speak at Canada Life Centre on Tuesday, first with reporters and later with fans. The appearance has all the makings of a distraction for the Jets and their fans, given Bettman’s role in both the departure of the original Jets in 1996 and the return of the NHL to Winnipeg in 2011.

“To be candid, this isn’t going to work very well unless this building is sold out every night,” Bettman said on the day Thomson and Chipman announced their purchase of the Thrashers.

“Bettman isn’t coming for information. He has all the information, all the facts, so it’s a bit of a marketing tour,” Hodgson said. “Gary’s going to come be a cheerleader.”

Over the past 15 years, Bettman has stood by the Phoenix/Arizona Coyotes franchise through a series of major financial losses, ownership changes and venue moves. This is not lost on Winnipeg fans.

“He’s always dreamed about growth in the South. That’s been his strategy for almost 30 years now,” Hodgson said. “I think it’s fair to ask the question whether there’s the same level of commitment to a Canadian market as there is to an American market.

“I guess we’re going to find out in the coming months and years.”

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