Nashville Predators
Nashville Predators hockey team based in Nashville - the capital of the state of Tennessee. The team entered the NHL in 1998 and since that time show good results as “NHL’s top on-ice performing teams” (Dunkan, 2009). The most important information about the team include the location of home stadium - the Sommet Center, with a capacity of 17,133 and 70 luxury suites, the average ticket price – $45,75 what is a bit lower than average NHL ticket price.
The revenuer per game in 2008/2009 – $600,000.
The financial situation of the team seems to be dramatic. In 2007, the team occupied 23rd place in tickets sold in the league and 24th place in gate revenue per game. As a result, the team was seeking for additional investments and on 29 November 2007, the team was sold to William Del Biaggio. Nevertheless, it did not bring much benefits. In 2008 the average attendance was less than 14,000 paid tickets per game and annual profit was less than $20 million. Moreover, 70% of tickets was sold for individuals and only 30% for corporations. This statement is very different from the average index of the league.
The main goal of this report is to make three key decisions:
The best location for Nashville Predators;
Ticket price;
Elements of effective strategy.
In order to choose the best location next criteria should be taken into consideration:
Concentration Of Large Companies
Existence Of Ice Arena And Its Capacity.
Nashville:
1,5 Million Citizens
Headquarters Of Nissan North America, Hospital Corporation of America and Dollar General Corporation
National Football League (NFL) franchise (the Tennessee Titans), professional baseball team (the Nashville Sounds)
the Sommet Center, which is only 12 years old with a capacity of 17,113.
Hamilton:
647,000 residents – Canadian 8th largest city ! Close location to Toronto!
Headquarters of telco Inc., Dofasco Inc., Siemens Canada, John Deere, Lakeport Brewing and BDO Dunwoody
the Canadian Football League (CFL) Hamilton Tiger Cats, the American Hockey League’s (AHL) Hamilton Bulldogs
Copps Coliseum – capacity of 17,500 ! Has no restaurants and luxury seats!
Need to get a permission from both the Toronto Maple Leafs and the
Buffalo Sabres ($10million) because Hamilton “lays in their protected territory and NHL rules protected teams from cannibalization in their geographic area” (Dunkan, 2009).
Winnipeg:
641,000 residents - Canada’s ninth largest city;
Headquarters of the Canadian Wheat Board, Monsanto Canada, CanWest Global Communications Corp., Manitoba Telecom, CanWest and Investors Group;
CFL team, the Winnipeg Blue Bombers;
the MTS Centre -a capacity of 15,015.
Kansas City:
2 million citizens;
Headquarters of Hallmark Cards and four Fortune 500 companies: Sprint Nextel Corporation, H&R Block, Embarq Corporation and YRC Worldwide Inc. and of Fortune 1000 companies: Interstate Bakeries Corporation, Great Plains Energy, Aquila, AMC Theatres and DST Systems;
The Kansas City Chiefs of the NFL, the Kansas City Royals of Major League Baseball (MLB), the Kansas City Wizards of Major League Soccer (MLS), the Kansas City Explorers of World Team Tennis and the Kansas City Brigade, an NBA franchise, the Kansas City Kings;
the Sprint Center -a capacity of 18,500.
Las Vegas:
1.7 million citizens;
Headquarters of Bigelow Aerospace, Yellowpages.com, MPower Communication, SkywireMedia and ComPartners;
the Las Vegas Wranglers of the ECHL (formerly the East Coast Hockey League, one league below the AHL);
the MGM Grand -a capacity of 14,000.
Houston:
5.6 million citizens – 4th largest in the USA;
headquarters of numerous Fortune 500 companies: ConocoPhillips, ExxonMobil,
Shell Oil, British Petroleum, Chevron, Minute Maid, Marble Slab Creamery and Apache Corp;
the Houston Astros (MLB),Houston Texans (NFL), Houston Rockets (NBA), Houston Dynamo (MLS), Houston Comets (Women’s NBA), Houston Aeros (AHL) and the Houston Wranglers (World Team Tennis);
The Toyota Center – a capacity of 17,800.
Next, I would like to count the break point ticket price for each location. (Figure 1). *41 plays in a season.
Hamilton - 17,500 capacity - lease $7million
7 000 000 (41*17,500)= $9,75
Winnipeg - 15,015 capacity - lease $8million
8 000 000/ (41*15,015) = $12,9
Kansas City - 18,500 $ - lease 8,5 million
8 500 000/(41*18,500)=$11,2
Las vegas - 14,000 capacity - lease $5million
5 000 000/(41*14,000)=$8,7
Houston - 17,800 capacity - $3,5million
3 500 000/(41*17,800)=$4,7
Figure 1. Break point ticket price.
It is necessary to mention, that this data is conditional because it does not include any expenses and it comes from the condition that 100% of tickets will be sold.
My marketing strategy consists suggestion not to relocate and stay in Nashville. There are many reasons for that:
Home city;
Modern stadium the Sommet Center with all the necessary attributes;
One of the most technologically advanced control rooms in the NHL;
High median-per family income;
A large university population.
Other aspects include:
Develop new forms of fan giveaways
Right implementation of these recommendations will result in improving team’s financial situation. On Figure 2 we can see basic financial statement of the team in the season 2007/2008 (Combination of AHL/ECHL team websites).
Figure 2. Basic financial statement.
EBITA shows negative index in this case the main goal of the marketing strategy is to make it positive.
Marketing plan costs consist of:
TV/RADIO MARKETING INFORMATION – $2,000,000
Corporate Mailouts - $300,000
Fan Giveaways - $1,000,000
Player Appearance - $400,000
Online Advertising - $700,000
The total sum is $4,400,000. This sum is average for the hockey industry. It is necessary to at least double thus sum of money in order for Nashville Predators to attract new audience and to improve its business.
References
Dunkan, J. (2009). Nashville Predators: Marketing Strategy For An Nhl. Franchise. Richard Ivey School of Business Foundation.
Combination of AHL/ECHL team websites. Retrieved from http://www.chron.com/disp/story.mpl/sports/5488904.html.
