The risks and rewards of hosting the world junior tournament amid Hockey Canada scandal

Despite numerous sponsors pulling out, community leaders in Halifax and Moncton, N.B., expect to generate economic benefit from the world junior men's hockey championship next month — and maybe help Hockey Canada turn the page on a scandal that has left December's event under a dark cloud.

"I think that there's an opportunity to look at hockey in a new way and I think there's no better place than here in Maritime Canada," said Halifax Mayor Mike Savage.

"We have strong hockey traditions, but also really strong activities by the hockey associations to promote diversity and to make sure that people realize hockey belongs to all of us, not just to a few."

Hockey Canada invited Halifax to bid after the International Ice Hockey Federation (IIHF) pulled the tournament from Russia following its invasion of Ukraine. In May, Halifax, in a joint bid with Moncton, won the rights to host the event.

At that time, intense pressure began to mount against Hockey Canada following revelations it had quietly settled a lawsuit after a woman claimed she was sexually assaulted by eight players, including members of the world junior team, following a 2018 gala in London, Ont.

WATCH | What's at stake for the world junior host cities? 

After a summer filled with disastrous news for the scandal-plagued national sport organization, Hockey Canada announced last month its CEO and board of directors would step aside.

A recently de-classified report to Halifax city council shows a $1 million investment as part of the city's bid for the world juniors, while the province of Nova Scotia has committed $2 million.

New Brunswick and Moncton haven't shared their individual commitments, but their total comes to $2 million.

Officials confident of economic success

Halifax Coun. Tony Mancini has said the tournament will bring a $50 million economic boost to the two cities, with $35 million of it being in Nova Scotia.

Savage doesn't think there's a financial risk, even with major sponsors Canadian Tire, Tim Hortons, Telus, Sobey's and Esso pulling out in the wake of the Hockey Canada scandal, and the cost of everything going up.

"We're told that the risk for us is pretty low," he said.

The head of Moncton's Chamber of Commerce is a little more cautious because of the "uncertainty" over sponsorship dollars.

LISTEN | Hosting world juniors in the wake of the Hockey Canada scandal:

John Wishart says the city will use money from a local tourism hotel levy to organize fan events.

"I think from the local perspective, we need to do the best we can to separate what's happening with Hockey Canada from the product that's going to be on the ice and the experience when people are here," he said.

"We have really no control over what's been happening with Hockey Canada, so I think we have to put our best face on for the tournament itself, showcase what we're offering, try to inject a little bit of Maritime flavour into the event."

Isabelle LeBlanc, Moncton's communications director, said there will be economic spin-offs, though she admitted it was an "unusual year."

The tournament moved from Russia to Canada and the situation with Hockey Canada may have an impact," she said.

Sponsor pull-outs may affect broadcast rights

Experts also say there is a downside for an event usually a boon for any Canadian city involved.

"The world juniors are one of those events that should be profitable for any host city," said Moshe Lander, an economics professor at Concordia University in Montreal.

There's not a lot of need to build new infrastructure — junior hockey-calibre arenas and the ability to broadcast the games already exist, he says.

Ticket sales are going strong in both cities, in contrast with the tournament in Edmonton this past summer after it was rescheduled due to the pandemic and tickets were still available on the eve of the tournament.

IIHF officials said the high price of admission, the tournament's odd timing and the then-growing Hockey Canada scandal were to blame for low attendance.

The Halifax/Moncton event is back to its usual time from Boxing Day to early January, a holiday tradition for many hockey fans.

Though sponsorships are a major revenue source that have diminished, Lander doesn't think the local economy will suffer.

"They should still find a way to be profitable, but instead of being very profitable, it's just going to be modestly profitable," he said. "Better than Edmonton, but maybe not what we're used to seeing from this type of event."

However, Lander says there may be an impact as Hockey Canada could get less from TSN for the rights to broadcast the games, since the network counts on big sponsors to buy commercial time. there will be a trickle-down effect.

Hockey Canada may get less from TSN for the rights to broadcast the games. TSN counts on big sponsors to buy commercial time.

"Commercial times are still going to be sold … but it's just not going to be the same competitive space of Tim Hortons, Canadian Tire and Telus competing for that advertising space," Lander said.

"It might be like Apple Auto Glass or these smaller companies, which means they might get a better price and TSN doesn't get as much money."

Lander said TSN may try to renegotiate its rights deal with Hockey Canada. As a result, the IIHF may get less compensation from Hockey Canada for hosting the event.

"It's probably Hockey Canada and TSN that are combined to eat a lot of the losses that come from this. They're just going to have to figure out who's responsible for what."

Some sponsorship money already redirected

Bauer is one of the companies that has "paused" its support, meaning it is no longer the official equipment supplier for the men's national team, although Hockey Canada can continue to purchase its equipment.

The company also pulled its sponsorship for the IIHF tournaments for both Edmonton in the summer and Halifax and Moncton this December, said Mary Kay Messier, Bauer's vice-president of global marketing.

Bauer is redirecting sponsorship dollars from the men's program to women's and grassroots programs.

As well, any profits from the men's hockey equipment purchase program will go toward the women's and para-hockey teams and underrepresented communities, she said.

"I think whenever you make these decisions, there's always some consequences that are difficult to deal with."

The sister of former NHL star Mark Messier, said Bauer's focus is on what's best for the game and Canadians. That includes looking at the changing demographics of young hockey players and providing equipment, programs and opportunities at a grassroots level.

"This is really a focus on a response to the crisis that's happening in Canada and the need for change and the need to begin to move forward, allow Canadians to heal and regain confidence in the sport of hockey," she said.

WATCH | Bauer marketing executive on decision to pause support:

News around tourney will focus on scandal

International media is usually a good thing, but Lander said the actual competition will have to share headlines with the Hockey Canada scandal surrounding the tournament.

An earlier case allegedly took place in Halifax.

Police are investigating after a source provided names of at least two members of the 2003 world junior hockey team who may have appeared in a video of an alleged group sexual assault in Halifax nearly two decades ago.

"It's going to be impossible for any country to not broadcast back to its home country that Hockey Canada is embroiled in scandal," Lander said

"And not only here's what happened, but it actually happened here where the event is currently taking place. And so, you know, the implication for Halifax is, this is a black eye for the city that's going to be broadcast around the hockey world," he said.

"It's going to be two weeks of repeatedly bad press broadcast around the world and it's going to be really difficult for TSN to try and take that objective distance and say, 'Let's just focus on the hockey, and let's not focus on exactly what happened in the city a few years ago.' "

Savage, Halifax's mayor, doesn't believe it will be an issue.

"A lot of the kids who will be playing in this tournament weren't even alive in 2003," he said.

"The allegations are against the hockey players, not against the community. We've always been a great hosting community. We have a great reputation for treating people with respect, making sure that it's a safe community, and that's certainly what we intend to do."

"We have to rectify the mistakes of the past and we have to do better and I think that there's an opportunity to showcase that," Savage said.

Wishart agrees. The CEO of Moncton's Chamber of Commerce says the city has an opportunity to position itself as part of the world juniors reset.

"And, with Halifax, show that we can put on a tournament safely, that the fan experience is good, that the product on the ice is good, and maybe start a new chapter in this storied history of this tournament and what it means to host communities," he said.