Sometimes, smaller is better.
For decades, major sports leagues have attempted to place their teams in the nation’s largest markets in hopes of selling more tickets and sponsors, as well as satisfying broadcasters who want to reach the most viewers.
But in recent years, leagues have embraced the allure of smaller markets. Teams have moved to cities like Oklahoma City, Las Vegas, and Winnipeg, Manitoba, in search of financial incentives, new arenas and stadiums, and more devoted fans.
In early April, the National Hockey League approved the $1.2 billion sale of the Arizona Coyotes to tech billionaire Ryan Smyth and his wife, Ashley. The team, which will be renamed, Play will begin at the Delta Center next season in Salt Lake City, which is home to the National Basketball Association’s Utah Jazz, one of Smith’s other teams.
At first glance, this move could be seen as a step back. Salt Lake City's metropolitan area is less than half that of Phoenix; Salt Lake City is the largest city. 29th largest media market While Phoenix is the 11th largest city, Utah has never been home to an NHL team. But the league's decision was less about Salt Lake City's size and more about its demographics. Like Phoenix, Salt Lake City is one of the country's fastest-growing cities. But in Utah, a thriving tech industry has attracted an influx of young workers with disposable income.
“People don't come to Utah just to retire,” Ryan Smith said in an interview. “If you have two states that are growing faster, you're always going to choose the younger state for the future of prosperity.”
Leagues have been “right-sizing” their operations for years to make money from fewer fans. The Mets were one of many baseball teams to build smaller stadiums with more exclusive clubs and suites. Citi Field, which opened in 2009, seats just 42,000, while the team’s previous home, Shea Stadium, had 55,000. Smaller arenas and stadiums are easier to fill — empty seats look bad on television — and teams can focus on more upscale concessions, club seats and exclusive “experiences.”
It typically takes several years for a team to be ready to relocate. But commissioner Gary Bettman said the NHL had to act quickly because the Coyotes needed stable owners and a big-league arena. The team had an option that would make it a better choice. Trouble pulling the fanand its financial condition was so bad that The league temporarily took over the club A decade ago. Since moving from Winnipeg in 1996, the Coyotes have played in a number of venues. Last season, their home was a college arena with just 5,000 seats.
But excitement for the new team in Salt Lake City is high. Fans have paid deposits for more than 30,000 tickets, which are in an arena that has about half the seats. Smith said 64 percent of those who signed up had not seen a Utah Jazz game in the past three years. While the Coyotes lagged behind NFL, NBA and Major League Baseball teams in Phoenix, the new hockey team already stands out in Salt Lake City, where it will compete for attention with the Jazz and two football teams.
“Even though the market is smaller, there can be more innovation, especially if the team is new and there's some buzz around them,” said Frank Hawkins, a longtime NFL lawyer who is now a media consultant. “The other thing is you're moving from a four-team market where your target is snowbirds who may not be from hockey country.”
In contrast, Salt Lake City and its surrounding counties are already a winter sports destination. The area has some of the best ski slopes in the country. The city hosted the Winter Olympics in 2002 and is a great place to be. Try to do this again in 2034Several US Olympic teams train in the area.
The broadcast media landscape is also changing. When the NHL relied on broadcasters to show its games nationally, networks wanted access to the country's largest markets so they could charge more for advertising. Similarly, cable networks like ESPN seek out markets with the most cable subscribers.
But millions of homes are dropping cable connections, hurting sports cable networks. In response, Smith has pushed the Jazz to launch its own direct-to-consumer streaming service and struck new deals with over-the-air broadcasters that reach far beyond traditional cable territories.
“With a large number of people cutting cable connections and not taking the regular cable bundle, the issue now is how many committed fans will pay extra for a streaming product, whereas before the market size was so big that everybody paid whether they watched the game or not,” said Marc Ganis, a consultant on media issues for several sports teams.
The NHL has not ruled out the possibility of a return to Phoenix. Bettman spent decades trying to place a team there, and the league believes a Phoenix franchise could still be successful with the right owner and arena.
Coyotes owner Alex Meruelo will retain the team's intellectual property, including its logo and records. Meruelo could reactivate the Coyotes if he finds a suitable home and pays the $1 billion expansion fee — the amount he originally received to ship the team to Utah — to return to the league.
The league has also considered other markets, reportedly including Atlanta — which has twice been home to an NHL team — and Houston, which had a team in the defunct World Hockey Association.
For now, the league's focus is on Utah, where Smith has just a few months to find a new name for the team, sell tickets and prepare for the franchise's first season in a new city.
“Maybe the fans will look at this as an opportunity to start from scratch with their family and say, 'This is one of those things we're going to do,'” Smith said.