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SBJ/September 30 - October 6, 2002/Special Report
Canucks singing loonie tune despite progress
Published September 30, 2002
The Vancouver Canucks seem to be doing everything right. The team owns its arena, has solid season-ticket and walk-up sales, and sports widespread local media carriage. The franchise has managed to put a competitive team on the ice for a knowledgeable and rabid fan base while keeping a lid on its player payroll.
So why is Vancouver hockey on shaky ground?
"Taking in loonies and paying out U.S. greenbacks has gone from a challenge to a near impossible task," said Canucks President Brian Burke.
Loonies are what the locals call the Canadian dollar, and it is worth less than two-thirds of an American singleton, an equation that plagues all but one of the NHL's six Canadian franchises.
The league has tried to address the currency disparity through the Canadian Assistance Program (CAP), which since the mid-1990s has funneled around $3 million a year to cash-strapped teams north of the border, but it hasn't been enough. Only Toronto has avoided the losses that have plagued the Canucks, Calgary, Ottawa, Edmonton and even the Montreal Canadians during the last decade.
The Canucks have lost about $70 million U.S. since 1996 but broke even or made a slight profit in 2001-02, the team said. Canucks COO David Cobb estimates the low Canadian dollar costs the team about $15 million U.S. a year.
"While our margin for error is small, we can compete reasonably well with a 80- to 85-cent loonie," Burke said. "At 60 to 65 cents, we need help to survive, pure and simple."
There is little public support for direct government assistance, so Vancouver and other Canadian clubs have begun to apply their own heat for a series of subsidies.
The team is seeking a percentage of lottery revenues currently generated from public wagering on NHL games, municipal property tax relief on the club-owned GM Place arena, and some form of tax on visiting team players similar to what exists in many other major pro league jurisdictions.
All in all, the measures could add $4 million to $6 million a year to team coffers.
Rick Thorpe, the provincial minister of competition, science and enterprise and the government's point man on hockey, said he is sympathetic to the team's plight but must balance its needs with public concerns.
"We are committed to finding creative ways to better level the playing field so that we can keep a world-class, professional hockey team in British Columbia," Thorpe said. "But those solutions cannot be seen as subsidies to million-dollar hockey players."
Michael Milke, a member of the Canadian Federation of Taxpayers, warns that the political consequences of any bailout would be difficult to swallow. "Any other business with average salaries of $1 million-plus going cap in hand asking for help would get the bum's rush out of the finance minister's office."
With most public opinion running against a government bailout, Thorpe and others have gone increasingly quiet, leaving the Canucks to try to make ends meet on their own.
To increase revenue, the team has created a premium-pricing plan that will jack up the cost of tickets for six high-demand games by between 10 percent and 20 percent. The package includes both visits to GM Place by Toronto and Detroit, a mid-February tilt against division rival Colorado, and the return of former Canucks superstar Pavel Bure with the Rangers.
The Canucks are not alone in pursuing a variable pricing policy. Ottawa and Pittsburgh have created a tiered ticket pricing policy, with all three clubs taking their cues from similar plans in effect across Major League Baseball.
While the market ultimately will determine the success of the new strategy, the demand for Canucks tickets is the strongest in years. Season-ticket sales are up 20 percent from last year to 10,000 and are expected to top the 12,000 mark.
Combined with game-day sales, that should translate into more than 30 sellouts at GM Place, capacity 18,422, up from 25 a year ago.
Cobb said that despite a tough economic climate, season-ticket renewals are at near record levels, and that "speaks volumes about Vancouver as a hockey town."
The team also is aggressively trying to mine other added-value revenue streams, once again packaging a limited schedule of 10 regular-season games on pay-per-view, available in a package for $51 or for $6.50 a game. Cobb said he is confident the club will exceed last year's average of 12,500 buys per game.
While the additional revenue is welcome, the team will probably still have to make the playoffs to turn a profit.
In the meantime, Seattle billionaire and owner John McCaw has put both the club and GM Place for sale. Although the preference is to find local ownership that will keep the team in Vancouver, no buyers have surfaced yet.
Brian Schecter is a writer in Vancouver.