Conference Board Economists Predict Canada Could Support Three More NHL Teams

Article excerpt

Three more Canadian NHL teams: Conference Board

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MONTREAL - The Conference Board of Canada says the economic conditions are favourable enough to have three more National Hockey League franchises in the country within the next 20 years.

The board suggested Monday that in addition to Canada's seven existing NHL teams, Quebec City and Hamilton, Ont., appear to meet minimum requirements to become home to franchises in the near future.

In the longer term, another franchise could eventually find its way to the Toronto area, but a lot of money and population growth would be required for the region to support two teams.

Two economists are making the case for expansion in a new book entitled "Power Play: The Business Economics of Pro Sports." It was published late last month by the Conference Board.

It's not the first time the organization has painted a rosy picture for professional sports in Canada.

In 2012, the same duo of Mario Lefebvre and Glen Hodgson floated the idea of the same three new NHL teams being in place by 2035.

Over the same period, they also foresaw the return of Major League Baseball to Montreal, the resurrection of the NBA in Vancouver and as many as three new Major League Soccer teams and several new Canadian Football League franchises.

Lefebvre, who no longer works for the Conference Board, said in an interview that cities like Hamilton and Quebec City meet basic requirements including adequate income levels, population base and corporate presence.

But potential franchises in these smaller markets would require dedicated owners and would likely face tough times in the event of economic shock waves such as a falling Canadian dollar.

"As has been the case with the Ottawa Senators, there will be deficit years if the team doesn't make the playoffs for a few seasons," Lefebvre said. "The owner can't just pack everything up the first time this happens (a deficit year)."

Lefebvre said he doubts the Canadian dollar will ever fall as low as 62 cents US, which it did in January 2002. He believes the current level of roughly 90 cents US would be workable. Most professional sports teams operate in U.S. dollars.

Quebec City has already begun construction on a new NHL-calibre arena set to open next year. The city has said it hopes to attract a team -- expansion or otherwise -- to play there.

Lefebvre argues that Quebec City residents are better off now than they were when their city lost the Nordiques to Denver in 1995. Lefebvre quoted Statistics Canada figures that indicate the average per-capita income has grown from $17,500 in 1995 to $28,903 in 2012. He says that's better than Montreal, where the income per capita in 2012 was $26,722.

Lefebvre said that suggests Quebec City locals can afford to buy tickets. …