Montreal is jumping, Prairies are slumping as hockey-less cities feel the pinch

In six of Canada’s seven NHL hockey markets, the arenas have gone dark for another season.

The lone team standing north of the border, the Montreal Canadiens, began their playoff series on Wednesday evening with a dramatic overtime win against the Tampa Bay Lightning.

For the remaining hockey-less markets (including Ottawa, Toronto, Winnipeg, Calgary, Edmonton and Vancouver), the economic impact is already being felt. McMaster assistant professor Hannah Holmes (Economics) weighs in on what a lack of Canadian playoff games means for local and national economies:

How do Canadian cities benefit when their hometown NHL team is in the playoffs?

Every home playoff game can generate upwards of $3 million in spending, impacting local hotels, bars and restaurants, parking and transit, tourism and so on.

Will a lack of Canadian playoff games affect small businesses, large businesses or both?

Small businesses, such as bars and restaurants, will really miss the revenue – and not just from not having games in town. The local bars would have been packed by fans who also watch away games. Large businesses whose advertising is directly tied to the playoffs (for example, TV ads during the game) will receive less exposure, as Canadian viewership drops if there are no Canadian teams left. For example: during Game 6 of last year’s Stanley Cup final between Chicago and Boston, only 3.4 million Canadians tuned-in. By comparison, 8.76 million Canadians watched Vancouver and Boston in Game 7 in 2011.

For smaller markets such as Winnipeg, Edmonton and Calgary, what is the immediate economic impact of not having a team in the playoffs?

Those cities would have benefited from the influx of money and visitors. Smaller markets also lose out on a chance to show off their city and maybe attract new businesses or expand their tourist industry. Montreal (and of course Toronto) are already international cities, so hosting playoff games is not as big a deal to them. However, we need to keep in mind that for a market of any size, a big sporting event like a playoff game might only cause a reallocation of spending and not generate new spending. It’s new money injected into a local economy that creates a net economic benefit.

On a national level, how does having only one Canadian team in the playoffs affect television ratings and other revenue streams?

Here’s a factoid I gave to the Toronto Star this week: Canadian sports fans are 40 times more likely to watch the NHL playoffs compared to American fans, and Quebec residents are 90 per cent more likely to tune-in. So yes, TV ratings will likely decline and there will inevitably be some Canadian advertisers who opt out of buying TV ads. Thankfully, the lone Canadian team is Montreal, and they have a sufficiently large national fan base. If it were the Winnipeg Jets or Edmonton Oilers, there may be less interest outside those markets.

If all seven Canadian teams made the playoffs, would there be a noticeable economic spin-off?

If a Canadian team makes the Stanley Cup final, there is an estimated economic spillover which would increase GDP by 0.1 percentage points. If all seven teams made the playoffs, CBC, Bell Canada Enterprises (BCE) and Rogers would benefit tremendously. As it stands now, they are all projecting lost revenues. Also, bars and breweries across the country would see revenues increase more than usual.

This article was initially published at dailynews.mcmaster

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