Isaac Lodise
Mr. Reuter
Econ
30 March 2015
Explosions, Dinosaurs, and Hockey
By: Isaac Lodise
Imagine for a moment, a game of hockey where every time a goal is scored there is an explosion somewhere on the ice rink so the skaters would have to skate around the holes. There would also be dinosaurs that eat players every time there aren’t being points scored. Now that would be incredibly cool but the economics of the National Hockey League are currently taking a turn for the worse. With the Canadian loonie’s value dropping, and the turnout for most American clubs so low, hockey may be seeing it’s final few seasons.
Anyone who doesn’t live under a rock, excluding anyone from a popular kids show that looks like a starfish, knows that the gas prices have been at a low in the recent months. As this puts more money into the pockets of consumers, it destroys the export value of other countries who rely on oil for their economy, such as Russia, Iran, and of course, Canada. This led to the Canadian dollar, commonly referred to as the loonie, dropping from $0.98 to $0.85 meaning that revenue for Canadian hockey teams is 14% less than their American counterparts. What does this mean for the United States? Well, Canada is home to 7 of 30 NHL teams, yet it rakes in 55% of the total profit. This makes for a disturbing future for North American hockey, which is already struggling along. The turnout for some southern teams is absolutely abysmal with only 11,000 fans filling a 17,000 seat arena for the Florida Panthers for example. This means that many of the American teams won’t be making up any ground for the loss in coin from its northern neighbors. 
Well the Florida Panthers suck so they shouldn’t be making that much money anyway right? It actually doesn’t matter how well a team is doing as the top three teams in the league are actually losing a combined $14 million a year. The fact is that hockey is just not the prominent sport anymore. Especially with March Madness season nearing its climax, consumers don’t want to make the tradeoff to watch a regular season hockey game. Even baseball interferes with the long hockey season as the playoffs for the Stanley Cup go until mid June. This makes it extremely difficult for hockey to draw in a new crowd. Consequently the revenue won’t increase and struggling teams can’t get back on their feet. The solution is to simply kill all of the star Major League Baseball players and blackmail the college basketball kids with failing classes! Just kidding, instead there could be an induction of a new team. The NHL has done it before where they created new hockey teams in the southern regions of the United States in order to increase their revenue so why wouldn’t it work again? Sure maybe the team would struggle to get on its feet at first but the novelty of it would hook audiences into watching more hockey. There could also be the induction of the dinosaur, explosion hockey but the NHL has sadly already shot down that idea. Ultimately, unless the loonie returns to its original value or some kind of miracle occurs, the National Hockey League might be reaching new lows. 
Works Cited
"20 NHL Players Filing for Salary Arbitration." The Pink Puck. 7 July 2014. Web. 31 Mar. 2015.
"Frozen Finances." The Economist. The Economist Newspaper, 8 Jan. 2015. Web. 31 Mar. 2015.
"NHL Daily Picks: Red Wings Look to Stay Red Hot against Penguins." CBSSports.com. Web. 31 Mar. 2015.
It's almost not surprising that hockey has hit this all time low because some of the other sports like you mentioned are gaining so much popularity. I don't think that creating a new team would help their situation though. I think that it would maybe peak the interest of a couple thousand but eventually die off again once March Madness and the Stanley cup are in full swing again. Then they would be left with another team unable to fill such large stands. It would make more sense to decrease the number of teams if the demand for hockey is decreasing, especially if it's trying to compete with some of the more prominent sports.
ReplyDeleteI personally think that dinosaurs and explosions should occur during a regular season hockey game as that might make more people who aren’t avid hockey fans more inclined to watch it. As the Canadian currency pulls behind from the value of the United States dollar I think it would be an important trade off for the NHL to start increasing what they offer at hockey games in order to increase the amount of revenue they could start bringing in. The world of sports is dominated by a select few (such as baseball, basketball and football) and because most of each other’s seasons don’t overlap there isn’t too much need to change anything about these games or what they can offer; yet because of these larger, dominating sports it might be in the NHL’s best interest to compete with the major sports by doing something completely radical like adding dinosaurs and explosions.
ReplyDeleteThis post was a little confusing as it went from explosions to dinosaurs to gas and then to the loonie and then back to hockey. It was just a little too much to follow and on the other hand you are right people don't want to make the tradeoffs for hockey because it is an elastic good. Now the part about the loonie really confused me but I think I understand. As the price or quality of their money actually goes down the hockey teams can't really get under way making them lose profits. This also means that the US will be in jeopardy because some of their teams come from Canada. While I am still struggling to make connections to economics from your post, one thing can be said about economics in general. Supply for an object doesn't always reach it's demand and vise versa meaning that right now hockey teams are in a surplus and hockey fans are in a shortage. All in all hockey just isn't that popular anymore and I don't think they will incorporate explosions. They might recruit players from other countries or have a worldwide hockey tournament and promote the heck out of it to receive profits.
ReplyDeleteThe value of currency tends to fluctuate, so the value of the loonie will not necessarily remain low in value, especially since the current decrease in value is based on something as volatile as oil prices. In addition, I think dinosaurs playing hockey would present a great new marketing strategy to really rack up the profits.
ReplyDeleteIf the NHL has already tried to stay a couple more years be utilizing a southern expansion team, what makes them think that this time will be any different than before? Hockey is the least prominent of the Big 4 sports (NBA, NFL, MLB and NHL) therefore, it is logical that they would be losing money and may run into bankruptcy.
ReplyDeleteThe depreciation of the Canadian dollar, or the loonie as it apparently is called, is really hurting Canada in regards to hockey. This depreciation reduces Canada's imports of goods and services from other nations, yet increases exports. The good news, however, is that with this depreciation will come increased tourism, which may in turn benefit the National Hockey League. It will be interesting to see how the future of the NHL plays out.
ReplyDeleteIt's interesting to think of how the NHL could possibly change if explosives and dinosaurs were introduced to the sport. I didn't know the NHL season extended that long into the year, and conflicted with that many other sports. But you brought up a good point, with the possible introduction of a new team into the league. I know other sports around the world that introduced new teams to the league, and they're becoming very popular, so I also wonder if that would work or not.
ReplyDeleteIsaac, I thought that this topic was very interesting as a Chicago Blackhawks fan. I had no idea that the NHL was losing so much money, or that so much of their profit was from Canada. I was also really surprised to see how much the depreciation of the Canadian dollar affected the outcome of the NHL. It will be interesting to see what happens to the NHL in the future, as it seems the demand for this sport is going down. I know that NHL games cost a lot of money and so does the appeal so maybe for some fans the marginal benefit is not greater than the marginal cost. So perhaps the opportunity cost of the hockey games are not worth the cost, so maybe like you suggested people are going to other sporting events as a tradeoff. I thought that your blog post was very coherent but I felt like it would’ve been a little bit more persuasive if you had more graphics or a video or any other form of media to compliment what you were arguing.
ReplyDeleteIsaac, this is a really interesting topic and I never would have assumed that NHL would be losing so much money each year. I would have liked to of seen perhaps a little more on how well each player makes or if how much each team makes/loses each year compared to another team in a different sport. With that, would you agree that there are perhaps other sports that aren't entirely worth paying attention to (i.e. golf, tennis, etc.) as other sports surely aren't doing quite as well as say football or basketball given the time period. Also, do you believe that NHL teams are losing money due to the changes in temperature? Hockey is a winter sport but with the frequent climate changes perhaps people aren't as inclined to go to a hockey game.
ReplyDeleteThe dinosaurs and explosions seam to bring up a interesting point. As if there was something new that was added into NHL it might bring the crowed back again. With the all time new low they are in need of a boost which may come from interducing a new team or maybe even other options into the sport.
ReplyDeleteThe dinosaurs and explosions seam to bring up a interesting point. As if there was something new that was added into NHL it might bring the crowed back again. With the all time new low they are in need of a boost which may come from interducing a new team or maybe even other options into the sport.
ReplyDeleteI like how you make this topic humorous and entertaining. By talking about the dinosaurs and explosions you definitely draw the audience in and make them wonder what in the world you are going to talk about. I think there are probably a lot of reasons why hockey is suffering, including the prominence of other sports like basketball and football that over power hockey, much like you mentioned in your essay. With such easy access to all sports games online and on TV, the opportunity cost for watching a hockey game is not watching another sports game that you might like better. I guess people are willing to forgo watching other sports for hockey.
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