The New Economics of the NHL: Why Canada Can Support 12 Teams
April 11, 2011
The paper finds that Canada can likely support 12 NHL teams—double the current number of Canadian franchises. Southern Ontario can support two more teams—one new team in the Greater Toronto Area and another in Hamilton, London or Kitchener-Waterloo. Vancouver and Montreal can each support a second team, while Winnipeg and Quebec City would also be successful homes to NHL franchises.
The paper estimates that a team located in Canada can expect to take in roughly $23 million per year in extra gate revenue relative to an American market of the same size. The NHL has so few Canadian teams due to its monopoly structure, not due to a lack of local demand or economic viability. The paper raises public policy issues related to anti-trust questions and whether Canadian tax dollars are being used to subsidize unprofitable American teams through the NHL’s television contracts.
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