The Puck Stops Here

I was emailed by Mojo Tooth and asked my opinion of this article where the NHL raves about setting attendance records in the regular season this year. Apparently 21,236,255 people "attended" an NHL game this season compared to 20,861,787 last year. The main reason to take these numbers with a grain of salt is that the NHL uses tickets distributed as a proxy for attendance. For example, if a team gives away tickets to the local YMCA so that underprivileged youths can attend games, it counts in the attendance figures whether or not all the people who were given free tickets actually attend a game.

This leads one to add is the NHL really up in attendance? Does it matter if it is? What really matters is that the NHL is up in revenue, which they undoubtedly are. This will be shown when the salary cap for next season is announced as a larger one then we have this year. But ultimately why does it matter to me if the NHL attendance and revenue is up? It really doesn't. It probably means that more money is being taken out of my pocket by the NHL. I don't see why that is a good thing for me. It means it is harder and more expensive for me to get tickets to go to a game. I don't see why that is a good thing for me. Ultimately, the fan is best served when tickets are cheap and plentiful. This would happen when the NHL does poorly. Not so poorly that it folds up shop, but when attendance dips asomewhat.

From a business standpoint, the NHL sees it as a basic sign of competence of leadership if it grows every year. Growth means growth in revenue and not necessarily attendance. Attendance figures can be controlled a bit by distributing less giveaway tickets which count in attendance whether they are used or not, without any significant change to overall revenue. The NHL publishes its total attendance by season going back to 1960/61 in the NHL Guide and Record Book. Attendance has grown annually every year except for 1975/76 through 1978/79 (it declined each of those seasons), 1981/82, 1985/86, 1990/91, 1994/95, 2002/03 and 2003/04. That is 37 of 47 years when the NHL played (meaning 2004/05 is not included in the analysis). About 79% of the time, the NHL attendance rises. This can be used as a marker for basic competence of the NHL marketing staff. Things are not doing too badly if attendance rises.

What caused the NHL's downturns in attendance? The late 70's one was probably caused by a downturn in the economy coupled with the existence of the WHA. For many fans it was enough to go to a pro hockey game. It didn't matter if that game was NHL or WHA. 1981/82 also corresponded with a recession in the US, as did 1990/91. 1994/95 is easily explained by the lockout that shortened the season to 48 games played (the previous year had an 84 game schedule). Fewer games mean less attendance. The final two years of 2002/03 and 2003/04 were likely caused by the NHL de-marketing itself in preparation for the lockout. This may have been a decrease in tickets distributed without being an actual decrease in attendance. That is an interpretation consistent with the increase in revenue in the NHL at the time. The only year I have not accounted for is 1985/86, which I do not have a simple explanation for.

What this means is that NHL attendance can often decline during recession. The US is probably in a recession right now (probably must be used because recessions are not forecast, they are only known after the fact when economic numbers are available). It will be interesting to see if the NHL can keep its revenue growth (that is what really matters and not attendance growth) through a prolonged recession that stretches into next season. That will be a test of the "new NHL".

The NHL is growing. Throughout most of its history it is growing. It is a basic expectation that it should grow. When this does not happen, something is drastically wrong (although it often happens because of larger economic factors the NHL has no control over). The upcoming recession may be one such factor. The reports of record attendance are not a sign that the NHL is doing well, it's a sign that it is not doing badly as a business.

For more on the business of the NHL read this post.