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Playoff success for Canada's NHL clubs a boon to the economy

Playoff success for Canada's NHL clubs a boon to the economy

Studies on the economic benefits of playoff success in pro sports show varying results.

Some say they simply move money from one pocket to another as fans spend their dollars on playoff tickets instead of movies -- or groceries. Other say a long playoff run can pump millions of dollars into the local economy.

But regardless of which side you're on, there's no denying that some players are in for a big payday seeing that an uncommonly high number (five) Canadian teams are in the Stanley Cup tournament. And while that boost may not last long, we can say for sure there are some winners.

Obviously, the five Canadian teams will benefit from having at least two playoff home games, guaranteed sellouts at playoff prices. While ticket prices vary, that works out to about $4 million per game. A seven-game series could produce as much as $16 million -- and those numbers will rise along with ticket prices in the second and third rounds.

There won't necessarily be any more tickets sold, but they'll be going at a much higher price.

Next on the list are the TV broadcasters - in this case, Rogers Communications.

Seeing that only one Canadian-based team made the playoffs last year and there haven't been this many in a decade, Rogers shouldn't have much trouble meeting ratings targets. Ad rates are generally determined by the ratings averages of the previous three seasons, so a ratings increase is a given.

That could translate into as much as an extra $10 million for Rogers for the first two rounds alone, said Scott Moore, head of Rogers NHL properties.

``I would have been happy with three (Canadian team), ecstatic when it got to four and thrilled and somewhat incredulous when it got to five," he said. "Financially, this has the potential not only to make our year, but exceed (what we expected)."

And having two of the country's biggest draws -- the Montreal Canadiens and Vancouver Canucks -- in the mix will boost ratings even more. (TV executives dream of what a Toronto Maple Leafs playoff run could do, with some estimates running as high as $5 million a game in ad revenue. But nobody's holding their breath on that one.)

Rogers also has an opportunity to cash in even more. Networks hold back a percentage of ads in hopes they can raise the rates as audience numbers take off in the event of a long playoff run by a Canadian team. In fact, Rogers has already increased rates on unsold inventory and will probably raise those again.

A successful playoff will also help take some of the sting out of what hasn't been a banner rookie season for Rogers. Since the playoffs is where the networks make their money, a strong post-season will likely help overcome the decreased ratings Rogers experienced in the first year of its 12-year, $5.3-billion broadcast deal. Ratings were off 1 per cent on the early Hockey Night In Canada game and 16 per cent for the late game. The Wednesday night package was down 3 per cent from what TSN produced last season.

But those decreases could quickly become increases, especially considering that at least two Canadian teams are guaranteed of advancing to the second round. Moore is also expecting some big numbers from GameCentre Live, which helps boost the company's substantial cellphone data profits.

But there are plenty of others ready to collect all those puck bucks.

Everybody from street vendors to program hawkers to scalpers will adding to their retirement funds during the playoffs.

“The hot dog vendors, and all the people that supply to the stadium, to the franchise to the arena are going to get more business,” Ian Lee of the Sprott School of Business told Ottawa's 1310News. “It’s not going to make the GDP of Ottawa go up measurably, but there will be some small businesses that are going to benefit.”

That would include the businesses along the city's self-proclaimed Sens Mile.

In Winnipeg, the day after the Jets clinched a playoff spot last week, fans made a bee-line to the Jets Gear outlet at a suburban shopping mall -- so many that staff had to limit the number of people shopping at one time.

Then, of course, there are the watering holes and restaurants near the arenas that do a booming business whenever the home team makes the playoffs. The Back 40 bar in Vancouver estimates that on a normal Saturday night, it does about $8,000 to $10,000 in business. A playoff game will double that amount.

Charles Gauthier, president and CEO of the Downtown Vancouver Business Association, told Global News that each playoff game is responsible for about an extra $1 million landing in the pockets of downtown merchants.

``If I’m a bar owner on the Red Mile, this is a great thing because my bar will be full every game night,” said Mount Royal University's Bissett School of Business associate professor David Finch.

“If the Flames weren’t playing and Vancouver was playing San Jose, you’re going to have 10 people in a bar on the Red Mile watching it and those 10 people would … have likely been there anyway,” he told Metro.

“Now, that bar will be packed at 5 p.m., you’ll have 100 people there and they’ll stay there from two hours before the game to two hours after the game.”

No matter how much sipping goes on, as compared with chugging, that's still a lot of revenue.