The NHL regular season concludes on April 9th, which means that the most exciting time of the season is almost here: the playoffs. Last year, the NHL experienced a playoff picture with no Canadian teams, but this year there is a possibility that five of the seven Canadian NHL teams will be back in Stanley Cup contention. Canada is the world hub of hockey; therefore, it impacts the everyday aspects of life, but will the inclusion of these teams in the playoffs bring economic prosperity to their city?
In the short term, there is no denying that consumption will boom, but when the playoffs are not reached an economy will not falter significantly. Let’s take the Winnipeg Jets for example. This year, they will unfortunately miss the playoffs leaving hometown fans at a loss for springtime hockey. For the most part, regular attendance at a Jets game comes from the people that live in and around the area, so there is not a huge influx of consumption by foreigners. These local fans, to keep busy, will most likely divert their ticket purchases to other forms of entertainment around the beautiful city, and it will not be significantly less than normal. For Winnipeg this spring, people will spend on their everyday lives and the economy will not bust.
During a playoff run, individual teams will increase their ticket sales, concessions, and merchandising. Ticket prices are escalated in the playoffs and teams can expect around $16 million for a seven-game series, or about $4 million per home game. Local bars and restaurants will be at full capacity eating and drinking for all the games. Hotels will also experience and increase in capacity from opposing team fans. In some instances, businesses will have to hire more employees in order to cover shifts and accommodate the burst in attendance to their business. Each city will be buzzing at game time and for the duration of their teams stay in the playoffs.
Possibly the biggest beneficiary from Canadian hockey teams making the playoffs once again will be Rogers Communications. Last season with no Canadian teams in the playoffs, their viewership was estimated to drop around 30%. This year, their ratings will spike for playoffs, especially if we have 5 Canadian teams, and this spike will come with great implications. The company can raise its rates on television advertisements where they can make an estimated $5 million per game. Expect Rogers Communications to experience a huge increase in revenue and ratings in the craziness that will ensue if five Canadian teams make the playoffs, and expect even more if they find success in the early rounds.
The effects of the playoffs will not show up in GDP measurements very much, but will show up in small business performance. Revenues will increase for those included, and those excluded will most likely remain the same. In the short run, aggregate demand will increase, but by the end of the playoffs, those lucky enough to have experienced a playoff run, will fall back to a normal rate for the hockey-less summer months.