Editors Note: The following was submitted by VcB reader Jason Bains. It was so good we had to post it.
Vancouver’s best shot at NBA basketball rests with Vancouver Canucks owner Franesco Aquillini, who according to reports has previously explored the viability of the Vancouver basketball market. Reports surfaced in 2009 that he was a potential buyer of the Indiana Pacers and again last February when David Stern confirmed he had received interest from the Canucks’ owner involving the New Orleans Hornets. As owner of Rogers Arena, a second franchise would occupy a minimum 45 vacant nights at the facility and produce additional concession, merchandise and parking revenue without adding any additional building expense.
The Ideal Model:
A Vancouver ownership structure that includes the Canucks, Rogers Arena and a future NBA team can be modeled similar to the Maple Leaf Sports and Entertainment Group which includes the Toronto Maple Leafs, Raptors, Air Canada Centre and the Toronto FC. Through a sports monopoly, ownership can leverage a dominant franchise with a less established one to capture full market share. The Vancouver Canucks currently have a season ticket wait list of over 10 years, a sellout streak of 400 consecutive games (third longest active streak in professional sports), a solid regional TV contract and merchandise sales in the top 5 of the NHL.
The average ticket price for the hockey team in 2011 was $68 and the club has reaped annual profits in excess of $24 million. The value of the franchise has nearly doubled since the Aquillini purchase in 2005 to $300 million according to Forbes. The club has exhausted all possible revenue streams and the growth of the Canucks seems to have peaked due to capacity issues.
By adding a NBA franchise to Vancouver, the NHL team can leverage its success with its corporate sponsors, TV partners and fan base by creating packages involving both franchises. It can be packaged in a way where fans and corporate sponsors get quicker access to the Canucks by purchasing corporate boxes and/or season ticket packages for the NBA team. Not only would this increase overall revenue, it would also allow Aquillini to appeal to a sport fan base which has been priced out of the Canucks for a number of years. A return of the NBA would allow families to take their children to games, the same children which will grow to become important NBA fans for the next generation.
This model has had remarkable success in Toronto where all three sports franchises in the city have suffered long playoff droughts and poor on-ice/on court performance yet strong business results. The Toronto Raptors, playing in a non-traditional basketball market, with a team that has not made the playoffs since 2008, has the 10th highest NBA valuation according to Forbes at $399 million, $99 million dollars more than the Canucks. Profits from 2011 exceeded the Canucks’ at $25 million which surprisingly did not include any playoff home games. The Raptors thrived on the success of the Maple Leafs and provided an option for priced out Leafs fans.
An NBA team in Vancouver is what Francesco Aquillini needs to do next to continue the strong momentum growth of the Vancouver Canucks and the beneficiaries of his next big purchase will be British Columbian basketball fans.
http://www.forbes.com/teams/vancouver-canucks/ – Canucks team value, average ticket price, operating profits etc.
http://www.forbes.com/lists/2010/32/basketball-valuations-11_Toronto-Raptors_321933.html – Toronto Raptors team value, operating profit, ownership etc.
http://www.thesportmarket.biz/charts/sellout%20streaks/ranktop.html – active sellout streaks
http://bleacherreport.com/articles/170615-pacers-to-vancouver-canucks-owner-makes-pitch-to-simon – Rumour Pacers to Vancouver
http://blogs.canada.com/2012/04/16/nba-coming-back-to-vancouver/ – recent rumour of NBA coming back to Vancouver. Spurred by ESPN analyst Ric Bucher on Seattle’s Jim Moore show.
http://blogs.vancouversun.com/2011/12/14/canucks-season-tickets-are-they-really-affordable-anymore/ – season ticket wait list. However this is not accurate as I have been on the wait list for 9 years now and am 300th on the list.