Arena Football in London, Ontario

Group Research Report

Carleigh Lewis

Danielle Greene

Kyle Wingrove

Sean Wood

Chris Perrin

Daniel Rahman

Secondary Market Research

Darren Johnson

November 19, 2010

Table of Contents

Table of Contents…………………………………………………... 2 Executive Summary…………………………………………………3 Introduction………………………………………………………… 9 Detailed Findings and Marketing Implications……………………..10 Category Analysis………………………………….. 10 Consumer Analysis………………………………….14 Porter‘s Analysis…………………………………….20 Competitor Analysis…………………………………26 London Knights……………………………………………. 26 Western Mustangs………………………………………….. 27 London Beefeaters…………………………………………. 28 Toronto Argonauts…………………………………………. 29 Hamilton Tiger-cats………………………………………... 30 Detroit Lions……………………………………………….. 31 Buffalo Bills………………………………………………... 32 John Labatt Centre…………………………………………. 33 London Music Hall Entertainment Complex………………. 34 Grand Theatre……………………………………………… 35 London Ski Club – Bolar Mountain……………………….. 36 OLG – Western Fair Raceway…………………………….. 37 Cineplex Odeon……………………………………………. 40 Mustang Drive-in Theatre………………………………….. 41 Fleetway……………………………………………………. 42 PEST Analysis………………………………………43 Limitations…………………………………………………………..45 Conclusions and Recommendations……………………………….. 46 Appendices…………………………………………………………. 47 References………………………………………………………….. 53

Executive Summary

Before completing conducting research to complete this report, five research objectives were determined:

- Researching the size, growth rate, profitability, product life cycle stage, sub- categories, and seasonality/cyclicity - Research specific consumer needs and effective ways to segment the consumer market - Research the risks associated with new entrants, substitutes, customers, suppliers, and rivals - Research the specific competitors of an AFL expansion franchise in London, Ontario - Research the political, economic, social, and technological factors affecting the proposed business environment

It was also determined that this research would be conducted primarily through print and web based resources.

Through completing this report, many topics were discussed:

In this report, a category analysis was conducted. In this analysis, category measures relating to the size, growth rate, profitability, product life cycle stage, sub- categories and seasonality/cyclicity were studied. In these, it was found that the John Labatt Centre‘s seating capacity in comparison to the average attendance of an AFL game. This however, could present a benefit, as it could influence a demand for the product, which will raise the value of tickets and potentially aid in expanding the consumer base. There are also a variety of sub-categories that the entertainment industry has to offer, which defines the competition that an AFL expansion franchise in London, Ontario is to face. The growth of the AFL is a positive indicator of further expansion, as the only way to reach more consumers is to expand to untapped markets, such as London, Ontario. Another encouraging stat is that the population of London, Ontario far exceeds the population of Spokane, Washington, which suggests that London, Ontario is an appropriate market size for this form of entertainment.

In this report, a consumer analysis was conducted. In this analysis, the consumer needs relating to customer and customer segments, substitutes, and competitors, and how this market can be segmented (geographic, demographic, benefit, behaviour/usage, buying situation, and psychographic) were studied. In these, it was found that the success and failure of this venture is based on the ability for this service to satisfy the entertainment needs of the target market, influencing them to spend their disposable income on means of entertainment provided by the AFL over the other options available to them. An important trend to consider is how the target market seeks information, where web-based resources are becoming more commonplace in today‘s society, specifically in Canada (Internet Usage, Broadband, and Telecommunications Reports, 2010).

In this report, a Porter‘s analysis was conducted. In this analysis, the risks relating to the 5 Force‘s (new entrants, substitutes, customers, suppliers, and rivals) were studied. In these, it was found that there are few risks associated to the new entrants, subsidiaries, customers, suppliers and rivals. Among these forces, there are many present advantages associated with introducing an AFL expansion franchise into the market. These advantages provide an outline of the steps an AFL expansion franchise would have to take to be successful in this market.

In this report, a competitor analysis was conducted. In this analysis, each competitor was individually studied. These competitors include:

London Knights: The London Knights are a major competitor to arena football in London, Ontario. They currently compete at the John Labatt Centre, which is the proposed venue for the arena football team. They have experienced a lot of success lately, and the team is well beloved in London, which will pose difficulties when introducing a new rival.

Western Mustangs: The Western Mustangs are an interuniversity football team that serves as entertainment for local football enthusiasts; they are one of the highest levels of football stationed in London, Ontario. Introducing a new football franchise will directly affect both teams, as fans will need to make a decision of who to see and which team they favour over the other. To be successful, an arena football team would need to lead their target market to favouring their franchise over the Western Mustangs football team.

London Beefeaters: The London Beefeaters are a junior football team that serves as entertainment for local football enthusiasts; they are the one of the highest levels of football stationed in London, Ontario. Introducing a new football franchise will directly affect both teams, as fans will need to make a decision of who to see and which team they favour over the other. To be successful, an arena football team would need to lead their target market to favouring their franchise over the London Beefeaters football team.

Toronto Argonauts: The Toronto Argonauts are an obvious competitor of an arena football team in London, Ontario, as they are also a form of football entertainment that is striving to compete with the popularity of the NFL. They pose as strong competition because they are Canadian based, unlike the Detroit Lions and Buffalo Bills. The level of talent is very similar between the two, and both brands hold unique characteristics that separate them from the rest of the competition. The ultimate goal is to convert local football fans consuming patterns, from that of traveling to view games to viewing games in their hometown.

Hamilton Tiger-cats: The Hamilton Tiger-cats are an obvious competitor of an arena football team in London, Ontario, as they are also a form of football entertainment that is striving to compete with the popularity of the NFL. They pose as strong competition because they are Canadian based, unlike the Detroit Lions and Buffalo Bills. The level of talent is very similar between the two, and both brands hold unique characteristics that separate them from the rest of the competition. The ultimate goal is to convert local football fans consuming patterns, from that of traveling to view games to viewing games in their hometown.

Detroit Lions: The Detroit Lions are a competitor of a potential arena football team in London, Ontario, as it is a team that competes at the highest level of the featured sport. Many football fans in this area are fans of the Detroit Lions, and are dedicated to that football franchise, specifically. This poses an issue to placing an arena football team in this area, as fans may prefer to invest in tickets to a Lions game over the local alternative. This is, however, something that can be overcome through the test of time and strategic marketing. The goal over time is to have consumers prefer to purchase tickets to the local arena football team, rather than purchase tickets and travel to watch an NFL football game.

Buffalo Bills: The Buffalo Bills are a competitor of a potential arena football team in London, Ontario, as it is a team that competes at the highest level of the featured sport. Many football fans in this area are fans of the Buffalo Bills, and are dedicated to that football franchise, specifically. This poses an issue to placing an arena football team in this area, as fans may prefer to invest in tickets to a Bills game over the local alternative. This is, however, something that can be overcome through the test of time and strategic marketing. The goal over time is to have consumers prefer to purchase tickets to the local arena football team, rather than purchase tickets and travel to watch an NFL football game.

John Labatt Centre: This is the venue in which the arena football team is being proposed to compete in. The competition presented by the other events at the John Labatt Centre is a very strong. It is imperative to establish a competitive advantage over these specific competitors, as the key to succeeding relies on consumers choosing arena football over whatever else the John Labatt Centre has to offer.

London Music Hall Entertainment Complex: This competitor presents its services to a wide range of consumers, of all ages and genders. Its performances are all unique from one another, constantly repainting the companies image. This competitor presents the target market of an arena football team an alternative mode of entertainment.

Grand Theatre: This competitor presents its services to a wide range of consumers, of all ages and genders. Its performances are all unique from one another, constantly repainting the companies image. This competitor presents the target market of an arena football team an alternative mode of entertainment.

London Ski Club – Bolar Mountain: This competitor provides its consumers with a service that is unique to the competition. They offer a diversified mix of activities for their consumers to choose from, which aids in attracting a variety of different target markets. This provides them with a competitive advantage. This attractive option is a strong competitor to any entertainment company entering the market.

OLG – Western Fair Raceway: OLG – Western Fair Raceway is a strong competitor of an arena football team in London, Ontario. Both companies are targeting the same market for the same purpose; to entertain. These facilities are also within 2km of each other, increasing the degree of competition. The fluctuating trends of this industry is very important to the implementation of an arena football team in London, Ontario, because if consumer spending decreases in gambling, it either indicates a decrease of household income or an increase of disposable income that could be used to support an arena football team. The success of an arena football team in London, Ontario is strongly tied to the gambling industry.

Cineplex Odeon: Cineplex Odeon is one of arena football in London‘s greatest competitors. It is a form of entertainment that is very practical to all consumers, and provides a high entertainment value. It dominates its market, as its competitors do not measure up to its quality service in entertainment. Cineplex Odeon accounts for much of the local entertainment industry, making it an obvious competitor to any entertainment company entering the market.

Mustang Drive-in Theatre: This competitor provides its customers with a service that is, in ways, very similar to the services that would be provided by an arena football team, this being entertainment. The target markets are also relatively similar, as it is targeting social types that enjoy the thrill of entertainment, young individuals that follow trends, and families looking for a source of entertainment that can be enjoyed by everyone involved. The capacity of the Mustang, however, is a fraction of the potential capacity of the John Labatt Centre when hosting arena football; an arena football team will need to attract far more consumers to be sustainable than the Mustang Drive-in.

Fleetway: This competitor provides its consumers with a service that is unique to the competition. They offer a diversified mix of activities for their consumers to choose from, which aids in attracting a variety of different target markets. This provides them with a competitive advantage. This attractive option is a strong competitor to any entertainment company entering the market.

In this report, a PEST analysis was conducted. In this analysis, the political, economic, social, and technological factors affecting the proposed business environment were studied. In these, it was found that the environment that an AFL expansion franchise is entering is very favourable to their service offerings. The political factors that effect this environment can be overcome through following the correct process of implementing a new sporting franchise. Having there been an AFL franchise in Canada in the past, this forms a path in which a new expansion franchise can follow, for implementation purposes. The local economic factors of London, Ontario dictate that the city is of an appropriate size in supporting an AFL expansion franchise. Exchange rates don‘t pose as an issue, as the dollar is hovering close to par. The fact that there is not much knowledge and media coverage of arena football in London, Ontario poses a risk to implementation, as it is imperative to raise great awareness of the brand before implementation. This attributes to the failure of the past Toronto Phantoms. This also affects the consumers confidence in the brand, as in many cases they have no prior knowledge of the league. The demand for entertainment in London, Ontario and the industry growth rates imply that there is a high potential interest for this brand to be implemented in this market. Advances in technology, allowing more consumer ‗inside knowledge‘ and an upgraded consumer experience, only benefit the implementation of this brand in this market, as news is traveling quicker and at a higher volume than it ever has. Information is more accessible to potential consumers, and they can now can more effectively to what they desire to know. The political, economic, social, and technological factors effecting the business environment are very favourable to the implementation of an AFL expansion franchise in London, Ontario.

Through these five analyses‘, it was found that determining if this plan was feasible and advisable; many factors were taken into account. These include:

- The issues relating to the popularity of arena football in Canada - The John Labatt Centre‘s ability to support an AFL expansion franchise - London‘s ability to support an AFL expansion franchise (relating to the market characteristics) - The volume and degree of competition the competitors present - External factors relating to the success and failure of an AFL expansion franchise in London, Ontario - Trends in the local entertainment industry and the sporting industry - The ways in which the target consumers spend disposable and discretionary income and search for information

Upon reviewing this criteria, we believe that implementing an AFL expansion franchise in London, Ontario, is feasible and advisable. We believe it provides many benefits to the consumers of London, Ontario, and would be a valuable asset to London, Ontario‘s entertainment and tourist industry.

Introduction

―Arena Football League (AFL) is an indoor American football league founded in 1987 by Jim Foster. It is played indoors on a smaller field than American football, resulting in a faster-paced and higher-scoring game. The sport was invented in the early 1980s and patented by Foster, a former executive of the United States Football League and the National Football League‖ (Arena Football League, November 15, 2010).

This is the service that is being proposed to be offered in London, Ontario. The objective of this research is to determine if it is a feasible and advisable plan to expand the AFL to London, Ontario. Specific research objectives include:

Research will be conducted using print and web-based resources. Within these, we will gather information in a variety of forms, including graphs, charts, tables, lists, and normal text. We will interpret these findings to form a report detailing whether it is a feasible and advisable plan to implement an AFL expansion franchise in London, Ontario.

Detailed Findings and Marketing Management Implications

Category Analysis

Category Measures:

Size:

Revenue: Exact revenues of the AFL or specific competitors are not made public; however, the operating revenue of spectator sports in Canada is $2,562,300 (Spectator Sports, Event Promoters, Artists and Related Industries, 2010).

Volume: Arena football teams host eight games per season, one season per year. The seating capacity of the John Labatt Centre for an arena football game is estimated to be 9,000 attendees, based on the seating capacity for the London Knights (2008/2009 OHL Attendance, 2010), with an estimated ticket value ranging between $34 and $68 (Buy Philadelphia Soul Tickets, 2010).

Number of Customers: ―The AFL's attendance has increased dramatically over the last few years, rising to over 12,400 people per game in 2005‖ (Arena Football League – Growth of the League, 2010). The number of customers for an AFL expansion franchise in London, Ontario cannot reach this mark, as their maximum capacity will equate to approximately 9000 attendees (2008/2009 OHL Attendance, 2010).

Number of Suppliers: This company has one supplier; the John Labatt Centre.

Market Potential: The potential market lies within London, Ontario (CMA), which holds a population of 490,917 (Financial Post Markets: Canadian Demographics 2010, 2010). This population exceeds that of Spokane, Washington (home of the Spokane Chiefs), which holds a population of 203,276 (Spokane, Washington, November 14, 2010). To fill the John Labatt Centre of local fans, less than 2% of the local population would need to be in attendance. This is a very valuable statistic, as this number represents a target for which the franchise can strive to meet.

Table 1 outlines London, Ontario (CMA) population in 2010 (Financial Post Markets: Canadian Demographics 2010, 2010): Population July 1, 2010 Estimate 490,917 % Canada Total 1.45 06-10% Population Change 3.15 Average Annual % Rate of Population Change 06-10 0.78 2012 Projected Population 497,852 2015 Projected Population 508,225 2010 Household Estimate 203,209 2012 Projected Households 208,335 2015 Projected Households 215,972

Table 2 outlines population characteristics of London, Ontario (CMA) based on gender and age in 2010 (Financial Post Markets: Canadian Demographics 2010, 2010): Age groups Total Male Female All 490,917 240,966 249,951 0-4 24,801 12,677 12,124 5-9 2,918 13412 12506 10-14 27741 14213 13528 15-19 32944 16874 16070 20-24 37928 19243 18685 25-29 38088 19034 19054 30-34 32747 16456 16291 35-39 31952 15975 15977 40-44 34302 17521 16781 45-49 39975 19766 20209 50-54 36299 17716 18583 55-59 31664 15261 16403 60-64 27364 13123 14241 65-69 20215 9,547 10668 70+ 48979 20148 28831

Sales Forecast: The sales forecast is not easily measurable, as this form of entertainment has never been implemented in this market. The most comparable sales forecast of an expanding AFL franchise is the London Knights, of which data is not available to the public.

Market Share: A market share analysis cannot be conducted, as the company‘s sales and total category sales are not available to calculate, but the entertainment industry segment in London, Ontario is divided between many competitors, that including:

- London Knights - Western Mustangs - London Beefeaters - Toronto Argonauts - Hamilton Tiger-cats - Detroit Lions - Buffalo Bills - John Labatt Centre - London Music Hall Entertainment Complex - Grand Theatre - London Ski Club – Bolar Mountain - OLG – Western Fair Raceway - Cineplex Odeon - Mustang Drive-in Theatre - Fleetway

Growth Rate: ―The AFL's attendance has increased dramatically over the last few years, rising to over 12,400 people per game in 2005. The AFL also maintains a minor league called af2. Beginning with the 2003 season, the AFL made a deal with NBC to televise league games. In conjunction with this, the league moved the beginning of the season from May to February and scheduled most of its games on Sunday instead of Friday or Saturday as it had in the past. The practice of playing one or two preseason exhibition games by each team prior to the start of the regular season was also discontinued at this time, and the regular season was extended from fourteen games, the length that it had been since 1996, to sixteen‖ (Arena Football League – Growth of the League, 2010).

Profitability: This service is very profitable to its suppliers and the league, but also entails a high initial cost for the owner and supplier. Its net profit after tax, return on investment, average margins, and break-even points presents benefits to the owner, supplier, and the league.

Product Life Cycle Stage: This service is at the introductory stage of its product life cycle, as the AFL is still a relatively new sporting league. The idea is still new, and the league is still unknown to many potential consumers, especially because there is currently not an AFL team in Canada. The AFL fits the profile of a company in the introductory stage of its product life cycle; criteria including competition, product, price, promotion, and distribution.

Sub-Categories: Sports entertainment is a sub-category of the of the entertainment industry. Other notable sub-categories of the entertainment industry include comedy, film, music, nightlife, and the performing arts (Category, Entertainment, November 14, 2010). 13

Seasonality/Cyclicity: AFL franchises are based on their production during their season (April through August), as this is the only time they can generate profit; franchises concentrate all of their efforts primarily on these months. The AFL operates in a cyclical format, where the seasons are played yearly (like most sports). These factors provide stability to an AFL expansion franchise, as these patterns create routines for consumers, which aids in developing the fan base (AFL: Schedule, 2010).

Implications: An interesting note that must be taken into consideration is the John Labatt Centre‘s seating capacity in comparison to the average attendance of an AFL game. This however, could present a benefit, as it could influence a demand for the product, which will raise the value of tickets and potentially aid in expanding the consumer base. There are also a variety of sub-categories that the entertainment industry has to offer, which defines the competition that an AFL expansion franchise in London, Ontario is to face. The growth of the AFL is a positive indicator of further expansion, as the only way to reach more consumers is to expand to untapped markets, such as London, Ontario. Another encouraging stat is that the population of London, Ontario far exceeds the population of Spokane, Washington, which suggests that London, Ontario is an appropriate market size for this form of entertainment.

Consumer Analysis

Consumer Needs:

Customers and Customer Segments: - The need for entertainment - A method of spending disposable income - Create jobs for locals - Bring awareness to the city

Competitors: - Stimulating the local economy - Revitalizing the local entertainment industry

Substitutes: - Stimulating the local economy - Revitalizing the local entertainment industry

Market Segmentation:

Geographic Segmentation: This target market is geographically segmented in London, Ontario (CMA).

Demographic Segmentation: This target market is demographically segmented as males between the ages 15 and over of all education and income levels.

Benefit Segmentation: This target market is beneficially segmented as consumers seeking entertainment in the form of sports competition (football).

Behaviour/Usage Segmentation: This target market is behaviour/usage segmented as both frequent and casual users, as the consumers degree of participation differs from person to person.

Buying Situation: This target markets buying situation is characterized as a sports entertainment organization.

Psychographic Segmentation: This target market is psychologically segmented as entertainment seekers and football fanatics.

What needs are fulfilled by the prospect? The main need‘s the prospect fulfills is the entertainment needs of its consumers. There is a wide variety of entertainment in London, Ontario, making competition between companies very competitive. It is imperative to offer consumers the best value for their dollar, as that is taken into strong consideration when consumers make purchasing decisions.

What are the customers’ purchase criteria?

List 1 outlines the customers purchasing decision-making process (Allen, April 24, 2001):

The process customers go through: - Recognize a need - Searching for information - Evaluating alternatives - Deciding to purchase

Different types of customer motivation: - Personal - Psychological - Social

Some ways to improve e-commerce performance: - Review the motivations and emotions that drive consumers to purchase your products. - Understand the process that consumers use to make purchase decisions. - Emphasize benefits in product descriptions, explaining how the features and functions help provide those benefits.

Customers of this particular company will consider the team‘s performance and the performance of the team‘s competitors in their purchasing decision-making process; if the team‘s performance is poor, customers will tend to the competitor.

How does the customer seek out information? The main method in which our target customers seek out information is through web-based sources. This method of seeking information is rapidly becoming more popular in all demographic segments. This is strongly attributed to the advances in communication technology in the past decade.

Table 3 outlines teen internet usage in 2007 (Teen Internet Use, 2007): Use the Internet or Email (% of Population) All Teens 94 Girls 95 Boys 93 Age 12-14 92 15-17 96 Race/Ethnicity White 96 Black 92 Hispanic 87 Household Income Less than $30,000/year 86 $30,000-$49,999 93 $50,000-$74,999 96 $75,000 97

Table 4 outlines the computer usage in the U.S. (percentage of U.S. adults in each group who use computers) in 2007 (Computer Usage in the U.S., 2007): Women 75% Men 73% Generation Generation Y (18-29) 87% Generation X (30-49) 82% Boomers (50-64) 72% Matures (65+) 41% Race and ethnicity Whites 77% Blacks 64% Hispanics (English speaking) 58% Household income <$30,000 57% $30,000-$49,999 77% $50,000-$74,999 90% $75,000+ 94% Community type Urban 71% Suburban 74% Rural 63% Educational attainment Less than High School 35% High School Graduate 67% Some College Courses 85% College Graduate/Graduate Degree 95%

How is the consumer influenced when purchasing? When purchasing, the consumer is influenced by the cost of the service, the alternatives he/she is presented with, and their desire for entertainment. These influences can work for or against an AFL expansion franchise in London, Ontario. The cost of the service can either be appealing to the consumer, as it is cheaper than viewing a Bills or Lions game, or be unappealing to the consumer, as it is more expensive than viewing a Mustangs or Beefeaters game. The alternatives he/she is presented with can either be appealing to the consumer, as the quality of the entertainment is greater than that of a Mustangs or Beefeaters game, or be unappealing to the consumer, as the quality of the entertainment is poorer than that of a Bills or Lions game. The desire for entertainment he/she is presented with can either be appealing to the consumer, if they desire entertainment, or unappealing to the consumer, if they do not desire entertainment.

When and where does the consumer shop? Our customers shop at a variety of different places at a variety of different times. This broad definition is due to the fact that the target market is so broad. As internet sources are becoming more popular, the usage of e-shopping is on the rise. E-shopping can be done 24 hours a day from the consumer‘s home, making it a very sensible and practical method of shopping. This, along with conventional shopping at shopping centres and isolated formats cover the methods of which our target market shops.

Table 5 outlines the retail non-store industries, operating statistics, by province and territory (Retail Non-Store Industries, Operating Statistics, by Province and Territory, March 30, 2010): 2004 2005 2006 2007 2008 Operating Statistics (annual) $ Thousands Canada Non-store retailers Total Operating Revenues 11,880,509 13,212,108 13,094,559 12,957,667 13,887,277 Cost of Goods Sold 7,790,357 9,215,319 9,153,254 9,128,653 10,158,996 Total Operating Expenses 3,237,246 3,228,467 3,226,671 3,296,140 3,265,682 Gross margin (%) 34.4 30.3 30.1 29.6 26.8

Electronic shopping and mail-order houses Total operating revenues 3,934,186 4,599,617 4,438,415 4,039,510 3,744,578 Cost of goods sold 2,366,104 2,946,781 2,789,674 2,458,779 2,240,768 Total operating expenses 1,286,674 1,406,239 1,372,177 1,418,970 1,369,600 Gross margin (%) 39.9 35.9 37.1 39.1 40.2

Table 6 outlines retail sales figures in London, Ontario (CMA) in 2010 (Financial Post Markets: Canadian Demographics 2010, 2010). Retail Sales % Above/Below National Average 0 2010 Retail Sales Estimate $ 6,171,453,779 % Canada Total 1.44 2010 Per Household $ 30,370 2010 Per Capita $ 12,571 2010 Number of Establishments 3,407 2012 Projected Retail Sales 6,895,650,540 2015 Projected Retail Sales 8,070,363,103

How can consumers be grouped into segments? As the consumers of an AFL expansion franchise in London, Ontario presents a broad target market, the most effective way to segment them would be the degree of consumption the undertake; their frequency of attendance. The primary focus of this is to identify the consumers that provide the most business to the franchise, and study their geographic, demographic, and psychographic profile. The secondary focus is to target those who have buying power

Table 7 outlines household income figures of London, Ontario in 2010 (Financial Post Markets: Canadian Demographics 2010, 2010): Income % Above/Below National Average +1 2010 Total Income Estimate $ 16,037,194,081 % Canadian Total 1.47 2010 Average Household Income $ 78,920 2010 Per Capita $ 32,668 % 2010 Households $100,000+ 21.95 2012 Projected Total Income $ 18,194,567,297 2015 Projected Total Income $ 21,598,520,164

What are the most attractive segments? The most attractive segments are young males, between the ages of 16-24. This is due to the fact that they have a great amount of disposable income, relative to their gross income. They are also generally the greatest sports fanatics, and would be the most interested in attending this sort of event.

Table 8 outlines personal disposable income per capita (Personal Disposable Income per Capita, May 9, 2007). 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 $ Ontario 15,498 15,704 18,659 19,087 18,987 19,594 20,327 21,218 22,685 22,977 23,692 Canada 17,022 17,239 17,273 17,696 17,782 18,208 18,801 19,610 20,825 21,511 22,268

Table 9 outliners the disposable and discretionary income of London, Ontario (CMA) in 2010 (Financial Post Markets: Canadian Demographics 2010, 2010). Disposable Income per Household $ 60698 Discretionary Income per Household $ 21839 19

Implications: The success and failure of this venture is based on the ability for this service to satisfy the entertainment needs of the target market, influencing them to spend their disposable income on means of entertainment provided by the AFL over the other options available to them. An important trend to consider is how the target market seeks information, where web-based resources are becoming more commonplace in today‘s society, specifically in Canada (Internet Usage, Broadband, and Telecommunications Reports, 2010).

Porter’s Analysis

New Entrants:

Economies of Scale: Expansion poses many advantages to the Arena Football League. Among these advantages include an increased popularity and fan base for the league, additional operating profit being generated by the expansion team, an opportunity to create hype for the brand, and to provide competition to the NFL and CFL. The AFL has assumed expansion in Toronto, Ontario in 2001. This venture was unsuccessful, as the franchise folded after only two seasons (Toronto Phantoms, November 9, 2010). This failure, however, is mainly due to the extravagant variety of entertainment options for the Toronto, Ontario market that are not present in London, Ontario. The market size is appropriate in sustaining an arena football franchise. Spokane, Washington has a population of 203,276 (Spokane, Washington, November 16, 2010), which is smaller than London, Ontario‘s population of 490,917 (Financial Post Markets: Canadian Demographics 2010, 2010). Economies of scale do not pose any major risks to an AFL expansion franchise in London, Ontario.

Differentiation: The service being offered by the AFL is unique to any other service offered in London, Ontario; there aren‘t any football organizations that compete at a comparative level or attract as many consumers as an arena football franchise. The desired brand image is very similar to that of the other competing sporting franchises in this market, which poses a variety of challenges and opportunities for an AFL expansion team in London, Ontario. The main challenge to overcome is the fact that most sporting franchises are branded very similarly. The main opportunity this presents is that an AFL expansion franchise can develop a brand image that is unique to the rest of the market, which provides a competitive advantage to this potential organization. The main risk that differentiation presents is that it can be copied by existing organizations and re-entrants, which will eliminate the competitive advantage that was established.

Capital: The main capital risk is that is presented by any sports franchise entering a new market is that there is not a pre-established fan base, which presents issues when attempting to break even in the early years of an organization. Once a functional fan base is established, a sports franchise will be sustainable in that market for a long period of time. Another risk is that an arena football team has never entered this market, so it is unknown as to how this market will take to this entertainment option.

Switching Costs to Customer: This is not a risk to an AFL expansion franchise in London, Ontario, as the primary costs to the consumer come in the sale of the ticket (there are no service or transferable costs to the buyer). In fact, an AFL expansion franchise in London, Ontario would help stimulate the local economy and provide more jobs for locals. These benefits counteract any risks that could be present in switching costs to customers.

Access to Markets: Access to this market is based on the approval of implementation by the John Labatt Centre and the City of London, and based on a finding a buyer of the franchise. The price of this is very comparable to the prices charged by other arena football stadiums, which eliminates any risks associated with the price of an AFL expansion team in London, Ontario. The regulations in which sports entertainment facilities are operated in Canada differ from that of American sports entertainment facilities. The regulations between sports are unique from one another, as each sports present different characteristics that warrant the need for different regulations. Throughout the AFL, the regulations are universal throughout the league. This relieves the potential risk that access to markets assumes.

Cost Disadvantages: The average ticket price of an AFL game typically ranges between $34 and $68 per ticket (Buy Philadelphia Soul Tickets, 2010). This price range is similar to that of the London Knights, Toronto Argonauts and Hamilton Tiger-cats. This price range is much higher than that of the London Beefeaters and Western Mustangs, and is much lower than that of the Detroit Lions or Buffalo Bills. This can be characterized as both a cost advantage and disadvantage, as the price range is complementary to the rest of the competitors (being of a middle-range price), but there are options that present a lower cost to the consumer, which is greatly considered in the purchasing decision of price conscious consumers.

Substitutes:

The substitutes of an arena football team in London, Ontario, would be the London Beefeaters and the Western Mustangs. The main differences between these substitutes are the talent and technology at their disposal. The risk of these substitutes taking business from an arena football team would depend on how well they are performing; if they are performing at a high level, they pose a greater risk.

Customers:

Volume: In 2006, London, Ontario (CMA) had a population of 490,917 (203,209 households). This population is growing, as the projected population for 2012 is 497,852 and the projected population for 2015 is 508,225 (Financial Post Markets: Canadian Demographics 2010, 2010). The CMA has a population density per square kilometre of 171.7, and a land area of 2,665.28km. The median age of London, Ontario (CMA) is 38.6, and 82.3% of the population is above the age of 15 (2006 Community Profiles: London, Ontario (CMA), February 5, 2010).

Buyer’s position: The purchase of a single ticket or season tickets for a night of premium entertainment is not a major investment to the consumer; the service is positioned to cater to the consumer‘s entertainment needs. The major risk presented is the buyer‘s positions relative to the competitors of an AFL expansion team in London, Ontario. The competitors may offer sales promotions and offer lower prices to attract business from the primary target market.

Product standardization v. differentiation: The product standardization v. differentiation does not pose any risks to an AFL expansion franchise in London, Ontario.

Switching costs: There is no switching cost to potential consumers of an AFL expansion franchise. When purchasing entertainment, rarely do you make commitments of over one year, and most decisions are made in short notice. This represents an advantage to an AFL expansion franchise in London, Ontario. There are no risks associated to switching costs.

Threat of backward integration: There is no threat of backward integration when assuming an AFL expansion franchise in London, Ontario, as the supply chain cannot be bought out. The only threat related to backward integration would be the AFL going out of business, which has been a risk many AFL franchises have been faced with as of late, but does not seem likely to occur in the near future (Brescia, July 1, 2009).

Importance of quality, knowledge, information: Quality, knowledge, and information are very important when assuming an AFL expansion franchise in London, Ontario; these are what drive consumers to attend games. Having information resources to develop knowledge of the fan base‘s needs and desires aids in providing the highest quality service to the target market. There is an abundance of information available to new entrants to the market that will aid in defining their target market to satisfy their needs and desires.

Actual market prices and supplier costs: Not made public.

Suppliers:

Supplier Concentration: Professional sporting franchises tend to be concentrated in dense, highly populated metropolitan areas. The main grouping, of which, is in the North Western region of the United States. The risk this presents is that this area is very close to South-western Ontario, and many consumers are willing to invest time, travel, and financial resources to attend these events. Another risk is that there are many other venues that would be fit for an AFL expansion franchise, providing potential franchise buyers with a variety of location alternatives.

Level of customer importance: The customer is imperative when assuming the volume, profit, inputs, and location of an AFL expansion franchise. The decision to implement a team in a specific city is based on the customer‘s ability to provide these functions in order to sustain the franchise. This is a risk that must be assumed by any expansion franchise, as these elements aid in forecasting the success or failure of the venture.

Switching costs: These costs exist, but are not made public. There are many costs associated with introducing a new sporting franchise into your facility, however, with these costs come many benefits and profits that exceed the value of the initial implementation costs and the expense of sustaining the franchise. Switching costs only become a risk when assuming the venture is unsuccessful.

Threat of forward integration: The only form of forward integration that poses a threat to suppliers is that the AFL expansion franchise could, in time, build their own facility to play games in. This would only occur given that this venture is very successful, and the capacity needs of the team exceed what the John Labatt Centre has to offer.

Rivals:

Number of competitors: In this report, there are 15 major competitors outlined: - London Knights - Western Mustangs - London Beefeaters - Toronto Argonauts - Hamilton Tiger-cats - Detroit Lions - Buffalo Bills - John Labatt Centre - London Music Hall Entertainment Complex - Grand Theatre - London Ski Club – Bolar Mountain - OLG – Western Fair Raceway - Cineplex Odeon - Mustang Drive-in Theatre - Fleetway

These competitors are very diverse in their service offerings, and provide potential consumers with a variety of entertainment alternatives. The main risk presented by this list is the diversity it presents, in all forms. There is a high potential to be drowned by the competition.

Industry growth rates:

Table 10 outlines the operating profit margins for spectator sports (Spectator Sports, Event Promoters, Artists and Related Industries, March 9, 2010): 2006 2007 2008 $ Millions Canada Operating Revenue 2,241.1 2,425.3 2,562.3 Operating Expense 2,163.6 2,347.0 2,470.4 Salaries, Wages and Benefits 947.7 976.5 1,064.8

Operating Profit Margin 3.5 3.2 3.6

This table indicates the operating profit margin over the years 2006-2008 in the spectator sports industry. As shown, the industry is generating more revenue per year, but the operating profit margins are not increasing. This indicates more spending by the suppliers. These findings do not present risks to an AFL expansion franchise in London, Ontario.

High fixed costs: There is a high fixed cost associated with implementing and sustaining an AFL expansion franchise. These figures are different in all circumstances, and are generally not made public. These fixed costs indicate an initial investment that is required by the new owner and the facilitator of the franchise. This investment does not pose a risk to an AFL expansion franchise in London, Ontario, as these investments are always necessary in this industry, and the high cost is soon covered by high financial rewards.

Lack of differentiation: There is a lack of differentiation in the sports entertainment industry. The target markets of these organizations are very similar, making sensible business/marketing decisions very typical throughout the industry. This illustrates an image for the entire industry, which is something a new entrant in this industry must overcome through product/service differentiation.

Capacity augmented in large increments: Like their competitors, the capacity is augmented in large increments. To sustain an AFL team, it is estimated that their average attendance must come close to maximizing the John Labatt Centre‘s capacity. Attracting this amount of consumers relies on the organizations ability to develop a strong fan base that is willing to purchase tickets to view this team over all other options. This poses a risk as attracting consumers in large increments is imperative in sustaining an AFL franchise.

Strategic importance of business unit: A unique business/marketing strategy is very important in this industry, as it is what provides you with a competitive advantage and persuades consumers to choose your brand over the competitors. The main risk this provides is that any strategic model can be duplicated, which will eliminate its effectiveness.

How well are you positioned against your rival?: An AFL expansion franchise in London, Ontario is very well positioned against its rivals, as it offers a unique service to the competition and has many opportunities to differentiate itself from the rest of the local entertainment industry.

Implications: There are few risks associated to the new entrants, subsidiaries, customers, suppliers and rivals. Among these forces, there are many present advantages associated with introducing an AFL expansion franchise into the market. These advantages provide an outline of the steps an AFL expansion franchise would have to take to be successful in this market.

Competitor Analysis

Ontario Hockey League, London Knights:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The Knights are an OHL team stationed in London, Ontario. The main service they provide for their consumers is quality entertainment through athletic competition (hockey). Since 2002, when the Knights moved to the John Labatt Centre, they have won the Midwest division six times, and have not posted a single losing season. In this time, the Knights won their first Memorial Cup (2005), and their fan base has dramatically increased (London Knights, November 8, 2010). The average attendance per game in the 2008-2009 season was 9,007 (100.07% seating capacity), leading the OHL by over 1,000 attendees per game. They had 24 sell-out performances, which came second to Niagara‘s 29 (2008/2009 OHL Attendance, 2010). The London Knights are affiliated with over 100 local and national sponsors, including sponsors such as Westgate Honda, Cyberteks Design, Newstalk 1290 CJBK, Labatt, Scotiabank, the London Free Press, White Oaks Mall, Phibbs Incorporated, and O.M.A.C. (London Knights: Sponsors, 2010).

The London Knights can be contacted at (519) 681-0800 (John Labatt Centre: Contact Us, 2010).

Financial information, credit history, and business strategy not made public.

The London Knights primary target market is local hockey fans, of all ages and genders. Their major competitors are very similar to the major competitors being outlined in this analysis. Their competitive strengths include being a very successful hockey team for the past decade, having a beautiful venue (John Labatt Centre), having a favourable market, and having an above average operating income in comparison to the average among OHL teams. Their competitive weaknesses include the team being stationed in an area that is central to a variety of different sports and entertainment alternatives.

Implications: The London Knights are a major competitor to arena football in London, Ontario. They currently compete at the John Labatt Centre, which is the proposed venue for the arena football team. They have experienced a lot of success lately, and the team is well beloved in London, which will pose difficulties when introducing a new rival.

Canadian Interuniversity Sport Football, Western Mustangs:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The Mustangs are a CIS football team operating out of the University of Western Ontario. The main service they provide for their consumers is quality entertainment through athletic competition (football). This year, the Mustangs ranked #2 in the country (CIS Football Standings, 2010), defeating Ottawa to win their 29th Yates Cup title (most in CIS history) (Yates Cup, November 13, 2010), and are now competing to win their 7th Vanier Cup title (most in CIS history) in school history (Vanier Cup, November 7, 2010). The Western Mustangs have a variety of sponsors, including Westgate Honda, Adidas, Goodlife Fitness, McDonalds, Domino‘s Pizza, The London Tap House, Powerbar, T.J. Baxter‘s, Fire Rock Golf Club, and Rogers TV (Western Mustangs: Community Partners, 2010).

The Western Mustangs can be contacted at (519) 661-2111 (Adopt a Mustang – Football, 2010).

Financial information, credit history, and business strategy not made public.

The Western Mustangs primary target market is students of the University of Western Ontario, and local football fans. They do not have many competitors, as many of their primary consumers are already affiliated with the university. With this said, they compete with the London Beefeaters to satisfy the needs of the local football fans. Their competitive strengths include having an extremely loyal fan base, the university they are stationed in is a large university, having very consistent audience, and being a historically successful football team. Their competitive weaknesses include an inability to reach markets outside of London, as those areas are occupied by residents that are loyal to their respective local universities.

Implications: The Western Mustangs are an interuniversity football team that serves as entertainment for local football enthusiasts; they are one of the highest levels of football stationed in London, Ontario. Introducing a new football franchise will directly affect both teams, as fans will need to make a decision of who to see and which team they favour over the other. To be successful, an arena football team would need to lead their target market to favouring their franchise over the Western Mustangs football team.

Canadian Junior Football League, London Beefeaters:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference. (2007)

The Beefeaters are a CJFL team stationed in London, Ontario. The main service they provide for their consumers is quality entertainment through athletic competition (football). The Beefeaters have not experienced much success in the CJFL since 1990, when they won seven of their eight games, finishing first in the league. Since then, they have not posted a winning season (London Beefeaters: Home Page, 2010). The London Beefeaters have a variety of sponsors, including WADA, Cutters, London‘s Source for Sports, the Ontario Trillium Foundation, Dundee Wealth, RCA Accounting Services, HD Supply, Swish Quality Cleaning Parts, Uniglobe, and the Sunshine Foundation (London Beefeaters: Sponsors, 2010).

The London Beefeaters can be contacted at [email protected] (London Beefeaters: Contact Us, 2010).

Financial information, credit history, and business strategy not made public.

The London Beefeaters primary target market is football fans in London, Ontario. Their major competition is the Western Mustangs, as that is the main alternative the Beefeaters consumers are presented with. Their competitive strengths include not having very much competition. Their competitive weaknesses include an unappealing venue, poor performance, and their major competitor is a successful organization.

Implications: The London Beefeaters are a junior football team that serves as entertainment for local football enthusiasts; they are the one of the highest levels of football stationed in London, Ontario. Introducing a new football franchise will directly affect both teams, as fans will need to make a decision of who to see and which team they favour over the other. To be successful, an arena football team would need to lead their target market to favouring their franchise over the London Beefeaters football team.

Canadian Football League, Toronto Argonauts:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The Argonauts are a CFL team stationed in Toronto, Ontario. The main service they provide for their consumers is quality entertainment through athletic competition (football). The average Argonauts game hosts approximately 30,000 fans (Toronto Argonauts: Home Game Attendance, 2009), which is approximately 97% of the Rogers Centre‘s seating capacity for Canadian football (Rogers Centre, November 15, 2010). The Argonauts have won more Grey Cups than any other CFL franchise (15) (List of Grey Cup Champions, November 11, 2010). The Toronto Argonauts have a variety of sponsors, two of which include President‘s Choice and Budweiser (Toronto Argonauts: Home Page, 2009).

The Toronto Argonauts can be contacted at (416) 341-2700 (Toronto Argonauts: Contact, 2009).

Financial information, credit history, and business strategy not made public.

The Toronto Argonauts primary target market is all Canadian football fans in Toronto, Ontario and surrounding area. Their major competitors include the Hamilton Tiger-cats, Ottawa Roughriders, Buffalo Bills and Detroit Lions. Their competitive strengths include being located in a high density population, being a storied and successful franchise, and having a favourable venue for their consumers. Their major competitive weakness is the popularity of the NFL in comparison to the CFL.

Implications: The Toronto Argonauts are an obvious competitor of an arena football team in London, Ontario, as they are also a form of football entertainment that is striving to compete with the popularity of the NFL. They pose as strong competition because they are Canadian based, unlike the Detroit Lions and Buffalo Bills. The level of talent is very similar between the two, and both brands hold unique characteristics that separate them from the rest of the competition. The ultimate goal is to convert local football fans consuming patterns, from that of traveling to view games to viewing games in their hometown.

Canadian Football League, Hamilton Tiger-cats:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The Tiger-cats are a CFL team stationed in Hamilton, Ontario. The main service they provide for their consumers is quality entertainment through athletic competition (football). The average Tiger-cats game hosts approximately 25,000 fans (CFL TV Ratings, 2010), which is approximately 83% of Ivor Wynne Stadium seating capacity for Canadian football (Ivor Wynne Stadium, November 11, 2010). The Tiger-cats have won eight Grey Cups in their storied history (List of Grey Cup Champions, November 11, 2010). The Tiger-cats major sponsor is Primus (Hamilton Tiger-cats: Home Page, 2010).

The Hamilton Tiger-cats can be contacted at (416) 341-2700 (Toronto Argonauts: Contact, 2009).

Financial information, credit history, and business strategy not made public.

The Hamilton Tiger-cats primary target market is all Canadian football fans in Hamilton, Ontario and surrounding area. Their major competitors include the Toronto Argonauts, Ottawa Roughriders, Buffalo Bills and Detroit Lions. Their major competitive strengths include being a storied franchise and having a very loyal fan base. Their major competitive weakness is the popularity of the NFL in comparison to the CFL.

Implications: The Hamilton Tiger-cats are an obvious competitor of an arena football team in London, Ontario, as they are also a form of football entertainment that is striving to compete with the popularity of the NFL. They pose as strong competition because they are Canadian based, unlike the Detroit Lions and Buffalo Bills. The level of talent is very similar between the two, and both brands hold unique characteristics that separate them from the rest of the competition. The ultimate goal is to convert local football fans consuming patterns, from that of traveling to view games to viewing games in their hometown.

National Football League, Detroit Lions:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

―The Detroit Lions, Inc. operates as an American football team. The Detroit Lions, Inc. was formerly known as Portsmouth Spartans. The company was founded in 1929 and is based in Allen Park, Michigan‖ (The Detroit Lions, Inc, 2010). The main service they provide for their consumers is quality entertainment through athletic competition (football). The team collected $15.4 million in operating income in 2004, and was valued at $748 million (Detroit Lions, 2010). This year, the Detroit Lions are averaging an attendance of 54,132 (83.9%), which ranks 29 of 32 teams in the NFL (ESPN: NFL Attendance – 2010, 2010). The Detroit Lions have several sponsors, the most important of which being Ford (Detroit Lions: Home Page, 2010).

The Detroit Lions can be contacted at (313) 216-4000 (Detroit Lions: Privacy Policy, 2010).

Business strategy not made public.

The Detroit Lions primary target market is males that like football in Detroit and surrounding areas. The Detroit Lions have recently undergone an identity change, where they introduced a ‗fiercer Detroit Lion‘. This was done to attract new fans to the franchise and generate excitement and ‗buzz‘ for the team (A Fiercer Detroit Lion, April 21, 2009). These efforts are accompanied by a multitude of recent top draft picks, including quarterback Matt Stafford (1st overall, 2009), Brandon Pettigrew (20th overall, 2009), Louis Delmas (33rd overall, 2009), Ndamukong Suh (2nd overall, 2010), and Jahvid Best (30th overall, 2010). These elements have established a new identity for this franchise that will continue to grow fondly into the younger male demographic. Their major competitors include the Chicago Bears, Minnesota Vikings, Green Bay Packers, and Cleveland Browns (The Detroit Lions, Inc. – Company Profile, Information, Business Description, History, Background Information on The Detroit Lions, Inc, 2010). Their competitive strengths include a high density local population, a new image, a new stadium and a diversified fan base. Their competitive weaknesses include a weak local economy, not being historically successful, and strong competition.

Implications: The Detroit Lions are a competitor of a potential arena football team in London, Ontario, as it is a team that competes at the highest level of the featured sport. Many football fans in this area are fans of the Detroit Lions, and are dedicated to that football franchise, specifically. This poses an issue to placing an arena football team in this area, as fans may prefer to invest in tickets to a Lions game over the local alternative. This is, however, something that can be overcome through the test of time and strategic marketing. The goal over time is to have consumers prefer to purchase tickets to the local arena football team, rather than purchase tickets and travel to watch an NFL football game.

National Football League, Buffalo Bills:

NAICS: 711211 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

―The Buffalo Bills, Inc. operates as an American football team. Buffalo Bills, Inc. was founded in 1960 and is based in Orchard Park, New York‖ (The Buffalo Bills, Inc, 2010). The main service they provide for their consumers is quality entertainment through athletic competition (football). The team collected $28.2 million in operating income in 2004, and was valued at $799 million (Buffalo Bills, 2010). This year, the Buffalo Bills are averaging an attendance of 65,620 (89.8%), which ranks 21 of 32 teams in the NFL (ESPN: NFL Attendance – 2010, 2010). Some notable sponsors of the Buffalo Bills include Verizon Wireless, M&T Bank, Blue Cross Blue Shield, and Jet Blue.

The Buffalo Bills can be contacted at [email protected] (Buffalo Bills: Contact Us, 2010).

Business strategy not made public.

The Buffalo Bills primary target market is males of all ages that like football in Buffalo and surrounding areas. It has been found that 54% of Bills fans in Buffalo are male, 69% of which are characterized as avid Bills fans. 74% of the Buffalo market is Bills fans (The Bills Brand is One of the Strongest in the NFL, 2010). These fan bases are typically developed through the clubs performance through a period of time, rather than through marketing efforts. Their major competitors include the New England Patriots, New York Giants, New York Jets, Cleveland Browns, Philadelphia Eagles, and Pittsburgh Steelers (The Detroit Lions, Inc. – Company Profile, Information, Business Description, History, Background Information on The Detroit Lions, Inc, 2010). Their competitive strengths include very loyal fans, a large secondary fan base (Toronto, Ontario), and a diversified fan base. Their competitive weaknesses include not being historically successful, an old stadium, and strong competition.

Implications: The Buffalo Bills are a competitor of a potential arena football team in London, Ontario, as it is a team that competes at the highest level of the featured sport. Many football fans in this area are fans of the Buffalo Bills, and are dedicated to that football franchise, specifically. This poses an issue to placing an arena football team in this area, as fans may prefer to invest in tickets to a Bills game over the local alternative. This is, however, something that can be overcome through the test of time and strategic marketing. The goal over time is to have consumers prefer to purchase tickets to the local arena football team, rather than purchase tickets and travel to watch an NFL football game.

John Labatt Centre:

NAICS: 711319 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

―Global Spectrum Facility Management provides industry-proven resources to enhance the environment for our guests, as well as attract top-notch entertainers and athletes, show producers and promoters. Global Spectrum Facility Management, and its parent, Global Spectrum, are experts in facility management and are a definite asset to the John Labatt Centre and the City of London‖ (John Labatt Centre: General Info, 2010).

Table 11 outlines the operating profit margins for spectator sports (Spectator Sports, Event Promoters, Artists and Related Industries, March 9, 2010): 2006 2007 2008 $ Millions Canada Operating Revenue 2,241.1 2,425.3 2,562.3 Operating Expense 2,163.6 2,347.0 2,470.4 Salaries, Wages and Benefits 947.7 976.5 1,064.8

Operating Profit Margin 3.5 3.2 3.6

The John Labatt Centre can be contacted at (519) 667-5700 (John Labatt Centre: Contact, 2010).

Business Strategy not made public.

The John Labatt Centre‘s primary target market is all entertainment seekers. They host a variety of different performances, including sports events, concerts, and other various activities; this diversifies their target audience, as it appeals to more consumer segments. Their main competitors include the London Music Hall Entertainment Complex and the Grand Theatre. The London Music Hall Entertainment Complex and Grand Theatre present musical and theatrical performances of many genres. Their competitive strengths include the largest venue in London, Ontario, ability to attract premium talent, and the popularity and success of the London Knights. Their competitive weaknesses include having too large of a venue to host certain events, leading to more business for competitors.

Implications: This is the venue in which the arena football team is being proposed to compete in. The competition presented by the other events at the John Labatt Centre is a very strong. It is imperative to establish a competitive advantage over these specific competitors, as the key to succeeding relies on consumers choosing arena football over whatever else the John Labatt Centre has to offer.

London Music Hall Entertainment Complex:

NAICS: 711311 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The London Music Hall Entertainment Complex is a musical arts theatre stationed in downtown London, Ontario. It services its customers by presenting a variety of different musical performances. The London Music Hall Entertainment Complex has four branches; London Music Hall (focus), Rum Runners, Tequila Rose, and Lounge (London Music Hall: General Info, 2010).

Table 12 outlines the summary statistics for performing arts (Summary Statistics for Performing Arts, All Industries, by Year, June 7, 2010): 2006 2007 2008 Thousands of Dollars Industry Estimates Operating Revenue 1,207,630 1,308,043 1,381,623 Operating Expenses 1,139,372 1,221,280 1,287,665 Operating Profit 68,258 86,763 93,958 Percent Operating Profit Margin 5.7 6.6 6.8

Table 13 outlines the summary statistics for performing arts (Summary Statistics for Performing Arts, All Industries, by Province and Territory, June 7, 2010): Operating Revenue Salaries, Wages, Benefits Operating Expenses Operating Profit Margin 2007 2008 2007 2008 2007 2008 2007 2008 Thousands of Dollars Ontario 485,027 539,665 155,077 168,400 450,364 502,674 7.1 6.9 Canada 1,308,043 1,381,623 386,263 411,683 1,221,284 1,287,665 6.6 6.8

The London Music Hall Entertainment Complex can be contacted at (519) 432-1107 (London Music Hall: Conact Us, 2010).

Business strategy not made public.

The London Music Hall Entertainment Complex‘s primary target market is music enthusiasts of all ages and genders, with an emphasis on young adults. Their primary method of attracting their target market is presenting performances that appeal to that particular segment. Their main competitors are the Grand Theatre and the John Labatt Centre, as they lay host to other arts performances. The Grand Theatre presents theatrical performances of many genres, and the John Labatt Centre presents sports entertainment and concerts. Their competitive strengths include a beautiful venue and a unique service offering relative to its competitors. Their competitive weaknesses include strong competition, presenting larger venues and in some circumstance more talented or popular performers.

Implications: This competitor presents its services to a wide range of consumers, of all ages and genders. Its performances are all unique from one another, constantly repainting the companies image. This competitor presents the target market of an arena football team an alternative mode of entertainment.

Grand Theatre:

NAICS: 711311 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The Grand Theatre is a performing arts theatre stationed in downtown London, Ontario. It services its customers by presenting a variety of different theatrical performances. The Grand Theatre has a variety of sponsors, including Scholar‘s Choice, Turnbull Flowers, and Urban Accents (Grand Theatre: Sponsorship, 2010).

Table 14 outlines the summary statistics for performing arts (Summary Statistics for Performing Arts, All Industries, by Year, June 7, 2010): 2006 2007 2008 Thousands of Dollars Industry Estimates Operating Revenue 1,207,630 1,308,043 1,381,623 Operating Expenses 1,139,372 1,221,280 1,287,665 Operating Profit 68,258 86,763 93,958 Percent Operating Profit Margin 5.7 6.6 6.8

Table 15 outlines the summary statistics for performing arts (Summary Statistics for Performing Arts, All Industries, by Province and Territory, June 7, 2010): Operating Revenue Salaries, Wages, Benefits Operating Expenses Operating Profit Margin 2007 2008 2007 2008 2007 2008 2007 2008 Thousands of dollars Ontario 485,027 539,665 155,077 168,400 450,364 502,674 7.1 6.9 Canada 1,308,043 1,381,623 386,263 411,683 1,221,284 1,287,665 6.6 6.8

The Grand Theatre can be contacted at (519) 672-8800 (Grand Theatre: Home Page, 2010).

Business strategy not made public.

The Grand Theatre‘s primary target market is those interested in theatrical arts, of all ages and genders. Their primary method of attracting their target market is presenting performances that appeal to that particular segment. Their main competitors are the London Music Hall Entertainment Complex and the John Labatt Centre, as they lay host to other arts performances. The London Music Hall Entertainment Complex presents musical performances of many genres, and the John Labatt Centre presents sports entertainment and concerts. Their competitive strengths include a beautiful venue and a unique service offering relative to its competitors. Their competitive weaknesses include strong competition, presenting larger venues and in some circumstance more talented or popular performers.

London Ski Club – Bolar Mountain:

NAICS: 713920 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

The London Ski Club – Bolar Mountain is a ski club that offers a variety of options to its consumers, including skiing/snowboarding hills, mountain biking (in summer months), tubing, and a skiing/snowboarding school. The London Ski Club – Bolar Mountain has two main sponsors; London‘s Source for Sports and Titanium Columbia.

Table 16 outlines the operating profit margins of skiing facilities in Canada between the years 2005-2008 (Amusement and Recreation, Summary Statistics, March 2, 2010). 2006 2007 2008 $ Millions Skiing Facilities Operating Revenue 867.7 875.5 937.9 Operating Expenses 780.0 818.9 850.1 Salaries, Wages, and Benefits 295.1 297.9 300.2 % Operating Profit Margin 10.1 6.5 9.4

The London Ski Club – Bolar Mountain can be contacted at (519) 657-8822 (Ski Bolar, 2010).

Business strategy not made public.

The London Ski Club – Bolar Mountain‘s primary target market is individuals who enjoy skiing and snowboarding of all ages and genders, because that is the service they are catering to their consumer. Their main competitor‘s are Cobble Hills Golf & Ski Club, Fleetway, and Cineplex Odeon. Their competitive strengths include being the highest quality and largest ski club in the London and surrounding area and they have alternatives for individuals who do not ski or snowboard. Their competitive weaknesses include being a seasonal service and the club is not large in comparison to others outside the market and the need to continually modify the marketing and product mix to attract new and sustain existing customers.

Implications: This competitor provides its consumers with a service that is unique to the competition. They offer a diversified mix of activities for their consumers to choose from, which aids in attracting a variety of different target markets. This provides them with a competitive advantage. This attractive option is a strong competitor to any entertainment company entering the market.

OLG – Western Fair Raceway:

NAICS: 711213 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

OLG – Western Fair Raceway is a company that offers its consumers a variety of different services. These services include over 750 slot machines, wheel of fortune, jackpot party, and blazing 7‘s. At the raceway, you can place bets on horses and watch the races. OLG – Western Fair Raceway also has an on-site restaurant, called Getaway Restaurant, which ―features a delicious selection of casual and home-style cuisine‖ (OLG Slots at Western Fair Raceway, 2010).

List 2 outlines financial information related to gambling (Gambling, August 27, 2010):

- Net revenue from government-run lotteries, video lottery terminals (VLTs), casinos and slot machines not in casinos rose steadily from $2.73 billion in 1992, before levelling off and remaining at around $13.7 billion since 2007 ($13.75 billion in 2009). - Net revenue from pari-mutuel betting (horse racing) dropped from $532 million to $355 million over the same period (1992 to 2009). - Net revenue from casinos continued to represent one-third of the gambling industry (34%) in 2009, while revenue and representation were up for lotteries (26%) and down slightly for both slot machines outside casinos (mainly at racetracks) (21%) and VLTs (19%). - Average gambling revenue per person 18 and over in 2008 ranged from $115 in the three territories to $830 in Saskatchewan, with a national average of $520. - Compared with workers in non-gambling industries, those in gambling were more likely to have a high school education or less (53% versus 40%), be paid by the hour (85% versus 65%), be paid less ($20.25 hourly versus $23.55), and receive tips at their jobs (31% versus 7%). - Men increased their share of employment in the gambling industry from 35% in 1992 to 51% in 2009. Similarly the rate of full-time jobs increased from 60% to 82% between the two years. - Around 6 in 10 women and men living alone reported spending money on at least one gambling activity; however, on average the men spent more than women—$560 compared with $455. - Gambling participation and average expenditures increased with household income. For example, 51% of households with incomes of less than $20,000 gambled in 2008 and spent an average of $395, while equivalent figures for those with incomes of $80,000 or more were 78% and $555.

Table 17 outlines gambling revenues and profits in Canada and Ontario (Gambling Revenues and Profits, September 29, 2010): Gambling Revenue Gambling Profit Share of Total Revenue Revenue per Capita (18 and over) 1992 2008 1992 2009 1992 2007 1992 2008 $ millions (current) % $ Canada 2,734 13,665 1,680 6,747 1.9 4.7 130 520 Ontario 853 4,733 529 1,716 1.9 4.8 105 465

Table 18 outlines household expenditures on gambling activities (Household Expenditures on Gambling Activities, August 27, 2010): At Least One Government Lotteries Other Lotteries/Raffles, Casinos, Slot Bingos Gambling Activity ect. Machines, and VLTs $ % $ % $ % $ % $ % All Households 2000 490 74 240 63 80 31 525 21 730 9 2001 515 72 250 61 95 29 535 20 795 9 2002 570 73 250 63 125 30 680 21 900 7 2003 505 74 235 64 95 28 650 19 800 8 2004 515 71 260 61 100 28 655 19 800 6 2005 550 69 250 60 140 26 710 17 945 6 2006 495 73 255 64 110 28 685 19 520 6 2007 645 52 280 48 125 17 850 17 790 4 2008 480 70 250 62 110 25 695 18 655 5

Table 19 outlines household expenditure on all gambling activities by income group (Household Expenditures on All Gambling Activities by Income Group, 2008, August 27, 2010): Average Expenditure Game as % of Total Income All Reporting Percentage Reporting All Reporting Households Households Households Households $ % Income After Tax 335 480 70 0.5 0.6 Less than $20,000 200 395 51 1.5 2.8 $20,000 to 330 500 66 1.1 1.7 $39,999 $40,000 to 345 475 73 0.7 1.0 $59,999 $60,000 to 305 390 77 0.4 0.6 $79,999 $80,000 and Over 430 555 78 0.4 0.5

OLG – Western Fair Raceway can be contacted at (519) 438-7203 (OLG Slots at Western Fair Raceway, 2010).

Business strategy not made public.

OLG – Western Fair Raceway‘s primary target market is adults with average incomes that enjoy the thrill of gambling and entertainment, as this market is devotes the highest percentage of their total income to gambling. Their main competitors are all of the other forms of nightlife in London; bars, restaurants, theatres, sporting events, ect.. Their main competitive strength is that they‘re the only racetrack and casino in the area. Their main competitive weakness is that there are many other local options of entertainment for their target market.

Implications: OLG – Western Fair Raceway is a strong competitor of an arena football team in London, Ontario. Both companies are targeting the same market for the same purpose; to entertain. These facilities are also within 2km of each other, increasing the degree of competition. The fluctuating trends of this industry is very important to the implementation of an arena football team in London, Ontario, because if consumer spending decreases in gambling, it either indicates a decrease of household income or an increase of disposable income that could be used to support an arena football team. The success of an arena football team in London, Ontario is strongly tied to the gambling industry.

Cineplex Odeon, London, Ontario:

NAICS: 512130 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

―Today, Cineplex Entertainment is the largest and most successful motion picture exhibitor in Canada. Headquartered in Toronto, Canada, Cineplex Entertainment owns, leases or has a joint-venture interest in 129 theatres with 1,342 screens from British Columbia to Quebec… Proudly Canadian and with a workforce of approximately 10,000 employees, the company operates the following top tier brands: Cineplex Odeon, Galaxy, Famous Players, Colossus, Coliseum, SilverCity, Cinema City and Scotiabank Theatres serving more than 70 million guests annually. The units of Cineplex Galaxy Income Fund, which owns approximately 99.7% of Cineplex Entertainment LP, are traded on the Toronto Stock Exchange (symbol CGX.UN).‖ (Cineplex: Corporate Information, 2010).

Table 20 outlines the operating profit margins of motion picture theatres in Canada between the years 2005-2008 (Motion Picture Theatres, March 2, 2010). 2005 2006 2007 2008 $ Millions Canada Operating Revenue 1,199.4 1,238.7 1,326.6 1,365.9 Operating Expenses 1,177.9 1,129.6 1,176.9 1,233.3 Salaries, Wages, and Benefits 180.0 179.7 177.0 187.5 % Operating Profit Margin 1.8 8.8 11.3 9.7

Cineplex Odeon can be contacted at 1-800-333-0061 (Cineplex: Contact Us, 2010).

Business strategy not made public.

The main service that Cineplex Odeon provides its consumers is premium entertainment in the form of motion picture presentations. Cineplex‘s primary target market is movie enthusiasts and common movie watchers; they cater to all genders and ages (excluding those under the age of 3). Their major competitors are the Mustang Drive-in Theatre and Fleetway. Their competitive strengths include market domination, a high quality service, convenient to its consumers, and little competition. Their main competitive weakness is the advancement of television technology (PVR, Rogers On-Demand, ect.) providing consumers with other methods of viewing motion pictures, aside from them attending competing theatres.

Implications: Cineplex Odeon is one of arena football in London‘s greatest competitors. It is a form of entertainment that is very practical to all consumers, and provides a high entertainment value. It dominates its market, as its competitors do not measure up to its quality service in entertainment. Cineplex Odeon accounts for much of the local entertainment industry, making it an obvious competitor to any entertainment company entering the market.

Mustang Drive-In Theatre, London, Ontario:

NAICS: 512130 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

―The Mustang drive-in was built in 1953 purchased by Premier operating in 1973 and twined in 1976. One of the last drive-ins in southwestern Ontario, the Mustang is located at Hwy 401 and Belmont cutoff.‖ The total capacity of the theatre is 830 carloads (Allen Theatres History, 2010).

Table 21 outlines the operating profit margins of motion picture theatres in Canada between the years 2005-2008 (Motion Picture Theatres, March 2, 2010). 2005 2006 2007 2008 $ Millions Canada Operating Revenue 1,199.4 1,238.7 1,326.6 1,365.9 Operating Expenses 1,177.9 1,129.6 1,176.9 1,233.3 Salaries, Wages, and Benefits 180.0 179.7 177.0 187.5 % Operating Profit Margin 1.8 8.8 11.3 9.7

Mustang Drive-in Theatre can be contacted at (519) 644-1160 (Mustang: Location, 2010).

Business strategy and relationships not made public.

The main service that Mustang Drive-in Theatre provides its consumers is premium entertainment in the form of motion picture presentations. The Mustang‘s primary target market is movie enthusiasts above the age of 18 who are social and can drive, and young families (adults between the ages of 30-40 and children between the ages of 3-14). Their major competitors include Cineplex Odeon and Fleetway. Their main competitive strength is that it is unique to the rest of the competition. Their competitive weaknesses include that it is not practical to all potential consumers (not everyone has access to a vehicle and is willing to stay up until 1:00am) and the market is dominated by Cineplex Odeon.

Implications: This competitor provides its customers with a service that is, in ways, very similar to the services that would be provided by an arena football team, this being entertainment. The target markets are also relatively similar, as it is targeting social types that enjoy the thrill of entertainment, young individuals that follow trends, and families looking for a source of entertainment that can be enjoyed by everyone involved. The capacity of the Mustang, however, is a fraction of the potential capacity of the John Labatt Centre when hosting arena football; an arena football team will need to attract far more consumers to be sustainable than the Mustang Drive-in.

Fleetway, London, Ontario:

NAICS: 713950 (NAICS Desk Reference 2007: The North American Industry Classification System Desk Reference, 2007)

Fleetway is a service company that specializes in providing its consumers with entertainment through bowling and other related activities. In 2007, Fleetway expanded to include activities such as rock climbing, high ropes, mini-putt, and billiards. Fleetway has formed a strategic alliance with Dairy Queen, which aids in inspiring impulse purchasing decisions by the consumer (OLG Slots at Western Fair Raceway, 2010).

Table 22 outlines the operating profit margins of all other amusement and recreational industries in Canada between the years 2006-2008 (Amusement and Recreation, Summary Statistics, March 2, 2010). 2006 2007 2008 $ Millions All Other Amusement and Recreational Industries Operating Revenue 1,758.2 1,820.4 1,961.0 Operating Expenses 1,649.6 1,694.1 1,784.9 Salaries, Wages, and Benefits 447.4 471.0 496.3 % Operating Profit Margin 6.2 6.9 9.0

Fleetway can be contacted at (519) 472-9263 (Fleetway Bowling Centre, 2010).

Business Strategy is not made public.

Fleetway‘s primary target market is everyone. Any given day, they will host customers of all ages and genders. These individuals are typically social and enjoy activities with their families and peers. Their main competitors are Cineplex Odeon and the Mustang Drive-in Theatre. Their competitive strengths include their affiliation with Dairy Queen, a multitude of activity options, and dominate the local bowling industry. Their competitive weaknesses include the need to continually modify the marketing and product mix to attract new and sustain existing customers.

PEST Analysis

Political Factors: - International trade regulations and restrictions - Safety regulations in Canada relative to the U.S. - The Competition Act

Economic Factors: - Economic growth of London, Ontario - Exchange rates between Canada and the U.S. - Stage of business cycle - Consumer confidence in the service - Supply and demand of entertainment in London, Ontario - Industry growth rates

Social Factors: - Demographics of London, Ontario - Mobility of target market - Target markets feelings on safety - Income of target market - Trends in shopping methods

Technological Factors: - Enhances the consumers experience - Advancements in the online retail industry - Advancements in online advertising - Consumers ability to access information

Implications: The environment that an AFL expansion franchise is entering is very favourable to their service offerings. The political factors that effect this environment can be overcome through following the correct process of implementing a new sporting franchise. Having there been an AFL franchise in Canada in the past, this forms a path in which a new expansion franchise can follow, for implementation purposes. The local economic factors of London, Ontario dictate that the city is of an appropriate size in supporting an AFL expansion franchise. Exchange rates don‘t pose as an issue, as the dollar is hovering close to par. The fact that there is not much knowledge and media coverage of arena football in London, Ontario poses a risk to implementation, as it is imperative to raise great awareness of the brand before implementation. This attributes to the failure of the past Toronto Phantoms. This also affects the consumers confidence in the brand, as in many cases they have no prior knowledge of the league. The demand for entertainment in London, Ontario and the industry growth rates imply that there is a high potential interest for this brand to be implemented in this market. Advances in technology, allowing more consumer ‗inside knowledge‘ and an upgraded consumer experience, only benefit the implementation of this brand in this market, as news is traveling quicker and at a higher volume than it ever has. Information is more accessible to potential consumers, and they can now can more effectively to what they desire to know. The political, economic, social, and technological factors effecting the business environment are very favourable to the implementation of an AFL expansion franchise in London, Ontario.

Limitations

This report was faced with several limitations, including:

- Limited financial information, credit history, and business strategies available for competitors . This was overcome by searching the financial figures of the specific industries, rather than the companies themselves

- Limited print resources available . This was overcome by placing a high emphasis on web based resources

- Some competitors are American, where some information is only made public in the US . This was overcome by focusing on the resources that did have the desired information available

- Lack of specific data related to Arena Football . This was overcome by focusing on the resources that did offer applicable

- Not all sources are government or print sources; issues with validity . This was overcome by validating all findings through matching the data with other resources that were available

Conclusions and Recommendations

In determining if this plan was feasible and advisable; many factors were taken into account. These include:

The issues relating to the popularity of arena football in Canada can be overcome through extensive advertising; when a professional franchise is implemented into a city, especially one of London‘s size, it attracts a great deal of attention. The John Labatt Centre has the ability to support an AFL expansion franchise. Its capacity equates to 3,000 seats below the leagues average attendance, but London also holds a lower population than 17 of the 18 cities with AFL franchises. This lower seating capacity could also lead to a demand for tickets, which would increase the value of the ticket and influence a rise in popularity. London can support an AFL expansion franchise; it is a large enough market that presents a high potential of success. There is competition in London‘s entertainment industry, but there are not any service offerings that compare to what the AFL has to offer. The political, economic, social, and technological factors that relate to the success of failure of an AFL expansion franchise in London, Ontario do not pose any risks or complications that would prevent this expansion from occurring. The trends in the local entertainment industry and sporting industry indicate that expansion is occurring, and it is feasible to pursue implementing an AFL expansion franchise. As well, the ways in which the target consumer spends disposable and discretionary income and searches for information provide insight into the potential of this market, and how to expand the market size and ultimately reach sustainable success in this market.

Appendices

List 1 the customers purchasing decision-making process:

The process customers go through: - Recognize a need - Searching for information - Evaluating alternatives - Deciding to purchase

Different types of customer motivation: - Personal - Psychological - Social

List 2 outlines financial information related to gambling:

Table 1 outlines London, Ontario (CMA) population in 2010: Population July 1, 2010 Estimate 490,917 % Canada Total 1.45 06-10% Population Change 3.15 Average Annual % Rate of Population Change 06-10 0.78 2012 Projected Population 497,852 2015 Projected Population 508,225 2010 Household Estimate 203,209 2012 Projected Households 208,335 2015 Projected Households 215,972

Table 2 outlines population characteristics of London, Ontario (CMA) based on gender and age in 2010: Age groups Total Male Female All 490,917 240,966 249,951 0-4 24,801 12,677 12,124 5-9 2,918 13412 12506 10-14 27741 14213 13528 15-19 32944 16874 16070 20-24 37928 19243 18685 25-29 38088 19034 19054 30-34 32747 16456 16291 35-39 31952 15975 15977 40-44 34302 17521 16781 45-49 39975 19766 20209 50-54 36299 17716 18583 55-59 31664 15261 16403 60-64 27364 13123 14241 65-69 20215 9,547 10668 70+ 48979 20148 28831

Table 3 outlines teen internet usage in 2007: Use the Internet or Email (% of Population) All Teens 94 Girls 95 Boys 93 Age 12-14 92 15-17 96 Race/Ethnicity White 96 Black 92 Hispanic 87 Household Income Less than $30,000/year 86 $30,000-$49,999 93 $50,000-$74,999 96 $75,000 97

Table 4 outlines the computer usage in the U.S. (percentage of U.S. adults in each group who use computers) in 2007: Women 75% Men 73% Generation Generation Y (18-29) 87% Generation X (30-49) 82% Boomers (50-64) 72% Matures (65+) 41% Race and ethnicity Whites 77% Blacks 64% Hispanics (English speaking) 58% Household income <$30,000 57% $30,000-$49,999 77% $50,000-$74,999 90% $75,000+ 94% Community type Urban 71% Suburban 74% Rural 63% Educational attainment Less than High School 35% High School Graduate 67% Some College Courses 85% College Graduate/Graduate Degree 95%

Table 5 outlines the retail non-store industries, operating statistics, by province and territory: 2004 2005 2006 2007 2008 Operating Statistics (annual) $ Thousands Canada Non-store retailers Total Operating Revenues 11,880,509 13,212,108 13,094,559 12,957,667 13,887,277 Cost of Goods Sold 7,790,357 9,215,319 9,153,254 9,128,653 10,158,996 Total Operating Expenses 3,237,246 3,228,467 3,226,671 3,296,140 3,265,682 Gross margin (%) 34.4 30.3 30.1 29.6 26.8

Table 6 outlines retail sales figures in London, Ontario (CMA) in 2010: Retail Sales % Above/Below National Average 0 2010 Retail Sales Estimate $ 6,171,453,779 % Canada Total 1.44 2010 Per Household $ 30,370 2010 Per Capita $ 12,571 2010 Number of Establishments 3,407 2012 Projected Retail Sales 6,895,650,540 2015 Projected Retail Sales 8,070,363,103

Table 7 outlines household income figures of London, Ontario in 2010: Income % Above/Below National Average +1 2010 Total Income Estimate $ 16,037,194,081 % Canadian Total 1.47 2010 Average Household Income $ 78,920 2010 Per Capita $ 32,668 % 2010 Households $100,000+ 21.95 2012 Projected Total Income $ 18,194,567,297 2015 Projected Total Income $ 21,598,520,164

Table 8 outlines personal disposable income per capita: 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 $ Ontario 15,498 15,704 18,659 19,087 18,987 19,594 20,327 21,218 22,685 22,977 23,692 Canada 17,022 17,239 17,273 17,696 17,782 18,208 18,801 19,610 20,825 21,511 22,268

Table 9 outliners the disposable and discretionary income of London, Ontario (CMA) in 2010: Disposable Income per Household $ 60698 Discretionary Income per Household $ 21839

Table 10 & 11 outlines the operating profit margins for spectator sports: 2006 2007 2008 $ Millions Canada Operating Revenue 2,241.1 2,425.3 2,562.3 Operating Expense 2,163.6 2,347.0 2,470.4 Salaries, Wages and Benefits 947.7 976.5 1,064.8

Operating Profit Margin 3.5 3.2 3.6

Table 12 & 14 outlines the summary statistics for performing arts: 2006 2007 2008 Thousands of Dollars Industry Estimates Operating Revenue 1,207,630 1,308,043 1,381,623 Operating Expenses 1,139,372 1,221,280 1,287,665 Operating Profit 68,258 86,763 93,958 Percent Operating Profit Margin 5.7 6.6 6.8

Table 13 & 15 outlines the summary statistics for performing arts: Operating Revenue Salaries, Wages, Benefits Operating Expenses Operating Profit Margin 2007 2008 2007 2008 2007 2008 2007 2008 Thousands of Dollars Ontario 485,027 539,665 155,077 168,400 450,364 502,674 7.1 6.9 Canada 1,308,043 1,381,623 386,263 411,683 1,221,284 1,287,665 6.6 6.8

Table 16 outlines the operating profit margins of skiing facilities in Canada between the years 2005-2008: 2006 2007 2008 $ Millions Skiing Facilities Operating Revenue 867.7 875.5 937.9 Operating Expenses 780.0 818.9 850.1 Salaries, Wages, and Benefits 295.1 297.9 300.2 % Operating Profit Margin 10.1 6.5 9.4

Table 17 outlines gambling revenues and profits in Canada and Ontario: Gambling Revenue Gambling Profit Share of Total Revenue Revenue per Capita (18 and over) 1992 2008 1992 2009 1992 2007 1992 2008 $ millions (current) % $ Canada 2,734 13,665 1,680 6,747 1.9 4.7 130 520 Ontario 853 4,733 529 1,716 1.9 4.8 105 465

Table 18 outlines household expenditures on gambling activities: At Least One Government Lotteries Other Lotteries/Raffles, Casinos, Slot Bingos Gambling Activity ect. Machines, and VLTs $ % $ % $ % $ % $ % All Households 2000 490 74 240 63 80 31 525 21 730 9 2001 515 72 250 61 95 29 535 20 795 9 2002 570 73 250 63 125 30 680 21 900 7 2003 505 74 235 64 95 28 650 19 800 8 2004 515 71 260 61 100 28 655 19 800 6 2005 550 69 250 60 140 26 710 17 945 6 2006 495 73 255 64 110 28 685 19 520 6 2007 645 52 280 48 125 17 850 17 790 4 2008 480 70 250 62 110 25 695 18 655 5

Table 19 outlines household expenditure on all gambling activities by income group: Average Expenditure Game as % of Total Income All Reporting Percentage Reporting All Reporting Households Households Households Households $ % Income After Tax 335 480 70 0.5 0.6 Less than $20,000 200 395 51 1.5 2.8 $20,000 to 330 500 66 1.1 1.7 $39,999 $40,000 to 345 475 73 0.7 1.0 $59,999 $60,000 to 305 390 77 0.4 0.6 $79,999 $80,000 and Over 430 555 78 0.4 0.5

Table 20 & 21 outlines the operating profit margins of motion picture theatres in Canada between the years 2005-2008: 2005 2006 2007 2008 $ Millions Canada Operating Revenue 1,199.4 1,238.7 1,326.6 1,365.9 Operating Expenses 1,177.9 1,129.6 1,176.9 1,233.3 Salaries, Wages, and Benefits 180.0 179.7 177.0 187.5 % Operating Profit Margin 1.8 8.8 11.3 9.7

Table 22 outlines the operating profit margins of all other amusement and recreational industries in Canada between the years 2006-2008: 2006 2007 2008 $ Millions All Other Amusement and Recreational Industries Operating Revenue 1,758.2 1,820.4 1,961.0 Operating Expenses 1,649.6 1,694.1 1,784.9 Salaries, Wages, and Benefits 447.4 471.0 496.3 % Operating Profit Margin 6.2 6.9 9.0

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