The common argument in defense of Americanization of professional hockey is that the Canadian “market” is too small to support professional hockey in cities other than Montreal, Toronto, Vancouver, and, in a minor league, Quebec City. Unfortunately, these economic arguments are never backed up by facts. The principal reason is that no facts on financial operations of the various teams are ever published. I propose to examine the feasibility of establishing a professional Canadian National Hockey League that would offer a calibre of hockey equal to that prevailing in the present NHL, making the following assumptions:
□ That franchise arrangements of the present NHL are not enforceable in Canadian courts.
□ That Canadian citizens as well as Cahadian governments — federal, provincial, municipal — have the right to establish professional hockey clubs in any city in Canada.
□ That contracts between present NHL clubs and Canadian players are not enforceable in Canadian courts.
□ That an average salary of $20,000 per year per player is sufficient to keep most of the hockey players of NHL calibre in Canada.
□ That no payments will be made to the present owners of the NHL teams to obtain a franchise.
□ That the new NHL and the clubs that
continued on page 27
compose the league will essentially operate on a nonprofit basis.
□ That NHL teams may operate in Vancouver, Edmonton, Calgary, Regina, Winnipeg, Ottawa, Toronto, Montreal, Quebec City and Halifax.
□ That each team has:
— 20 players with an average salary of $20,000 per year (which is higher than the latest reported average in the present NHL, namely, $19,000 in 1970);
— 20 other people on staff in various capacities with an average salary of $10,000 per year;
— there will be a 76-game schedule;
— each team rents the arena facilities at $1,000 per regularly scheduled home game or $38,000 per year if the team does not make the play-offs.
38 games on the road, 25 persons Airfare 38 x 25 x $100 $95,000 Hotel and meals
76 x 25 x $25 47,500
ARENA RENTAL $1,000 per game 38,000
EQUIPMENT, $500 per player 10,000
TOTAL ANNUAL OPERATING COSTS 850,500 ERRORS AND CONTINGENCIES* 149,500
TOTAL OPERATING COSTS $1,000,000
*A very large margin of error is provided for In this example because requests for information from the NHL on actual operating expenditures remained unanswered.
What is assumed, in essence, is that the Canadian people can, if they choose to do so, make the decision to remove Messrs. Smythe, Molson, Norris, Adams, Cooke, et al from their position of absolute control over all professional hockey in North America, with the object of repatriating hockey as the national game in Canada. An NHL franchise has proved a profitable enterprise in Toronto and Montreal. In Vancouver there should be no serious financial difficulties. The “problem cases” would be in the smaller cities. The following assumptions are based, roughly, on the Winnipeg situation: each of the cities has a 10,000-seat arena. To keep it a “people’s sport,” the average admission price is two dollars per seat — possibly ranging from one dollar for the “top greys” to four dollars or five dollars for the “mid-rink reds.” At these prices the arenas can be filled for every game, giving each of the clubs in the smaller cities admissions revenues of $20,000 per game in the regular schedule, for a total of $760,000 per year. Net revenues from exhibition games and, where applicable, play-off games are ignored. Television continued on page 28
rights to the CNHL total one million dollars annually and are distributed evenly among the clubs, or on the basis of greatest need where deficits occur.
The total revenues per team in the smaller cities would be $760,000 from gate receipts plus $100,000 from television rights for a total of $860,000 per year. Assuming that the annual operating expenses are one million dollars, the average annual deficit per club in the smaller centres would be $140,000. It seems that Canadian cities other than the “big three” cannot afford NHL hockey. However, each of the teams in the new CNHL cities would, we assume, repatriate from the U.S. 20 hockey players, who at present pay their income taxes to the U.S. government. When playing in Canada they would pay their income taxes here. The 20 other jobs that we had assumed at an average salary of $10,000 would also be new jobs and the persons holding them would pay taxes as well. On average, each of the players (assuming no income from other sources) would pay about $5,650 annually in income taxes — $4,000 to the federal government and $1,650 to the province. On average, each of the other staff members would pay about $1,750 in income taxes — $1,317 to the federal government and $433 to the province. Total income taxes paid by the personnel
of each team would therefore amount to $148,000 (say $150,000) per year. The federal and provincial governments could afford to subsidize each of the teams in the smaller cities by an average of $150,000 per year without incurring a net loss. Since the average net annual operating deficit runs at $140,000 per team in these smaller centres, this subsidy would put them in the black.
Admittedly, the analysis is incomplete, because no figures on operating expenditures of professional clubs were available. However, the burden of proof that it cannot be done now rests with the NHL and the defenders of the status quo. Let them supply the figures and we can proceed with a more accurate assessment. Furthermore, the analysis has not taken into account any of the indirect economic and social benefits (nor the strengthening of our national identity) that would flow from the operation of the CNHL. If one pauses to reflect on the public expenditures made on the Pan American Games in Winnipeg, Expo in Montreal, and the 1976 Olympics in Montreal (all one-shot affairs), one wonders why no concerted national effort has even been made to keep Canadian hockey at home. All that is required to repatriate our national sport is an act of will.
W. P. JANSSEN, HEDLIN MENZIES (ECONOMIC CONSULTANTS), WINNIPEG
CHEZ US: The eagle chase
AN EAGLE was captured by town police Monday morning and his appearance created wide interest from local residents and visitors to town. Complaints were received that the eagle was frightening children and chasing dogs and cats and even baby carriages. Police Chief Bernie Kelly and Officer Dan W. Maclnnis caught the eagle on Cottage Avenue. He was shot and viewed by many as they passed the Town Hall. The eagle weighed about 25 pounds and measured seven feet from tip to tip. His capture was something unusual for town police. CAPE BRETON POST, NS, August 18
THE GRAVENHURST Town Council may end up in the souvenir business. David Clark wrote to council suggesting it sell $265 worth of unneeded police crests “as a memento of our once-active police force.” Council considered this “not such a silly idea” and plans to see if selling the crests as souvenirs would be legal.
THE GRAVENHURST NEWS, ONT.,
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