ATTENDANCE IN THE NATIONAL HOCKEY LEAGUE AFTER THE LOCKOUT A THESIS Presented to The Faculty and Department Of Economics and Business The Colorado College In Partial Fulfillment Of the Requirements for the Degree Bachelor of Arts By Alexa Bannerman May/2009 A TTENDANCE IN THE NATIONAL HOCKEY LEAGUE AFFTER THE 2003-2004 SEASON ENDING LOCKOUT Alexa Bannerman May, 2009 Economics and Business Abstract For many years the National Hockey League was struggling to bring fans to their games. Due to such low attendance and salary caps, the National Hockey League decided to have a lockout in 2004-2005 which was the first ever season ending lockout in any sport. Since the lockout, attendance in the NHL slowly started to increase. This thesis looks at what factors affect attendance in the NHL since the lockout. Attendance was low before the lockout, but after the lockout attendance started to increase more and more every year. This thesis tests for what the NHL is doing right since the lockout so that they can continue to increase their attendance ratings even more. The research was taken from NHL.com, Versus. com, and ESPN.com. Data was found for all thirty NHL teams. A regression was used to test the data with the dependent variable being attendance. The independent variables are; goals scored, total points, winning percent, competitive balance, location, all-stars, games played, play-offs, weekend games, minor penalty minutes, and major penalty minutes. The regression found that four variables were significant in affecting attendance. These four variables were goals scored, location, minor penalty minutes, and major penalty minutes. This thesis proves that there are other factors besides game factors that affect attendance; however, the four game factors that affect attendance go along with the new rule changes that the NHL created after the lockout proving that the NHL is doing some of the right things to increase attendance in the NHL. (Keywords- Hockey, Attendance, Lockout) ON MY HONOR, I HAVE NEITHER GIVEN NOR RECEIVED UNAUTHORIZED AID ON THIS THESIS TABLE OF CONTENTS Chapter Page I. INTRODUCTION ................................................................................................ 1 II. LITERATURE REVIEW ..................................................................................... 8 Factors that affect attendance ............................................................... 9 Location ...................................................................................... 11 Competitive Balance and Winning Percent.. ........................................... 15 Violence ........................................................................................ 19 All-stars ...................................................................................... 21 New Facilities ............................................................................... 23 Discrimination .............................................................................. 26 Summary ..................................................................................... 29 III. METHODOLOGy ....................................................................... 32 Dependent Variable ..................................................................................... 34 Independent Variables ..................................................................................... 35 Predicted Outcomes ........................................................................ 36 IV. RESULTS .................................................................................... 46 V. CONCLUSIONS ........................................................................... 54 VI. SOURCES CONSUL TED .......................................................... , ..... 59 LIST OF TABLES 2.1 Factors Impacting Attendance ............................................ '" 10 3.1 Teams in the National Hockey League ..................................... 33 3.2 Independent Variable Summary ............................................ 35 3.3 Predicted Value of The Independent Variables ............................. 36 4.1 Summary Statistics ........................................................... 48 4.2 Regression Analysis Results ............................................... 49 LIST OF FIGURES 1.1 Attendance in the National Hockey League .............................. 4 1.2 Goals Scored Per Games ................................................. , .... 6 2.1 Factors That affect Attendance ............................................... 9 LIST OF MODELS 3.1 ......................................................................................... 45 4.1 ............................................. ........................................... 46 CHAPTER I INTRODUCTION "Hockey captures the essence of Canadian experience in the new world. In a land so inescapably and inhospitably cold, hockey is the chance of life, and an affirmation that despite the deathly chill of winter we are alive". I For many Canadians hockey is a way oflife and the most skilled Canadian players choose to showcase their talents in the National Hockey League, which is considered as the best professional hockey league in the world. The National Hockey League (NHL) is made up of over fifty percent Canadians and yet there are more American teams than Canadian teams that make up the league. Typically, however, Americans do not show the same pride and passion as their partners up north which can be seen in the low attendance that some franchises have been averaging. Before the lockout, many teams were struggling to sell tickets, however, since the lockout ticket sales have increased. 2 This thesis is going to look at the factors that affect NHL attendance since the lockout-out in the 2004-2005 season. The analysis will show the impact that location has on attendance along with other factors that may affect attendance, including goals scored, competitive balance, all- stars, fights, playoff experience, total points, saves, weekend games, and new rules and regulations. There are many different reasons why fans attend hockey games, and if franchises I Leacock, Stephen. "Hockey Quotes and Sayings." Quotes and Sayings. Available from http://www.quotesnsayings.com/hockey/. Internet; accessed 27 March 2009. 2 Ziehm, Len. "Hawks' Ticket Prices on ice." Chicago Sun Times. Available from http://www.suntimes.com/sports/hockeylblackhawks/ 1474777 ,CST-SPT -htix 13 .article. Internet; accessed 27 March 2009. 2 can figure out which of these factors affect attendance ratings, than they will be able to improve their attendance sales by focusing on these factors that are known to significantly affect attendance. Purpose The purpose of this thesis is to examine how attendance has been affected since the lockout in the 2004-2005 season. The lockout was the first ever lockout in sports to end an entire season for any sport. There have been strikes but nothing to this extent that actually ends an entire season. The lockout is the first time since 1919 that the Stanley cup has not come to terms on player salaries in time for the start of the 2004 season. The lockout resulted in the loss of the entire 2004-2005 season and produced an outcome in favor of the owners including a salary cap, a pay cut for players, new free-agency rules, a new drug-testing policy, and changes in the rules of play. 3 In the 2005-2006 season following the lockout, attendance in the NHL slowly started to increase and by the second year the NHL saw an increase of 91 %. 4 This is a significant increase for any sports team to see in a single year, even baseball which has had similar labor strikes has not been able to produce as much ofan increase in attendance. If the hockey league as a whole can figure out what the reasons are for the increase in attendance, than the franchises may have a better chance of increasing their attendance ratings which in tum increases their revenue. (Even another five percent increase in attendance would help the league tremendously due to the amount of games played in a single hockey season). Attendance is such an important issue in the 3 Staudohar, Paul D .. "The Hockey Lockout of2004-05." Monthly Labor Review, no. 29 (2005): 1-23. 4 Holloway, Andy. "Hockey Stuck." Canadian Business, no. 9 (2006): 3 National Hockey League and right now due to ESPN dropping their broadcasting rights with the league, fans are unable to watch as many games as they would before. The NHL signed a deal with the Outdoor Life Network and another deal with Versus (an up and coming sports network) that is worth $216 million over the next three years. 5 However, the revenue that they are bringing in does not compare to the revenue that was brought in from the broadcasting rights that the NHL had with ESPN. With national, broadcasting rights down, attendance in one of the major forms of revenue that is brought in for the NHL which adds to the pressure of franchises to bring in large ticket sales. So what has changed? In the early 1980's the National hockey League's attendance was up and fans would be at the games early and many would never leave before the game was over. In a one on one interview, Murray Bannerman talks about the fans and attendance when he played for the Chicago Blackhawks. "When I was playing hockey, the Chicago Stadium would be packed before the games. People would never come to games late, now you see people arriving to the game after the first period.,,6 In the late 1990's and until the lockout, the NHL lost a significant