Canadian markets ripe for new professional sports franchises
OTTAWA, Aug. 23, 2012 /CNW/ – Economic conditions are right for Canada’s
existing professional sports clubs to prosper and for new
Canadian-based franchises to succeed over the next 25 years, according
to The Conference Board of Canada’s concluding publication of its Playing in the Big Leagues series.
The publication, What Will the Canadian Pro Sports Scene Look Like in 2035?, assesses the business economics of pro sports using the Conference
Board’s long-term national and provincial economic forecasts, as well
as the analytical framework developed throughout this series. Based on
these criteria, the Canadian professional sports scene in 2035 could
-- Up to three more National Hockey League (NHL) teams, raising the number to 10; -- A revived Major League Baseball (MLB) team in Montreal; -- A second chance for a National Basketball Association (NBA) franchise in Vancouver; -- Three more Major League Soccer (MLS) clubs in Canada, making six in all; and -- Up to seven viable new markets for franchises in the Canadian Football League (CFL).
“The future is bright for professional team sports in Canada. The
Canadian population is expected to continue to grow, and the dollar
should remain strong for years to come. Thus, there is no reason to
expect that existing Canadian franchises will move south of the border
over the next 25 years. And there is reason to believe that the number
of Canadian-based franchises will increase in the future,” said Mario Lefebvre, Director, Centre for Municipal Studies, and co-author of the series.
The analysis in this series made extensive use of the four market
pillars for professional sports franchise success. First introduced in
the second briefing of the series, Defining the Market Conditions for Success, the four pillars are:
-- Market size; -- Income levels; -- Corporate presence; and -- A level playing field
This briefing looks at how each of the four pillars is likely to evolve
in potential Canadian markets over the next quarter-century.
By 2035, Canada’s current seven NHL teams could be joined by Hamilton,
QuÃ©bec City and a second team in the Greater Toronto Area (GTA). Both
Hamilton and Quebec City will have populations of more than 900,000,
and the population in the Toronto Census Metropolitan Area (CMA) alone
will grow to 9 million people. The Conference Board considers incomes
in all three markets to be adequate to support teams. Quebec City and
Hamilton have relatively few corporate head offices, but Quebec City
could obtain support from companies elsewhere in the province of
QuÃ©bec, and Hamilton is next door to Toronto-based corporations.
However, franchises in each market would face significant financial
outlays. Start-up costs include the construction of a new arena in
QuÃ©bec City and major arena renovations in Hamilton. A new building
would likely be needed elsewhere in the GTA for the region to play host
to a second franchise. Furthermore, a Hamilton team and a second
Toronto-area franchise could expect to pay territorial fees to existing
teams in the region.
Neither MontrÃ©al nor Vancouver can expect second NHL teams in the next
25 years, but other North American leagues – namely baseball and
basketball – could take a second look at these markets.
MontrÃ©al already possesses the market conditions required to support a
Major League Baseball franchise. Of course, a return of baseball in
MontrÃ©al would require both deep-pocketed ownership and a new stadium.
But the decisive factor in the outlook for Montreal is baseball’s
financial system. For a revived MontrÃ©al franchise to succeed, Major
League Baseball needs to level the financial playing field so that
teams in smaller-sized markets have a realistic chance to compete for
championships by acquiring and retaining top players.
With a population forecast to rise to 3.5 million in 2035, the Vancouver
market will have the size, wealth and corporate presence to sustain
existing franchises in the NHL, CFL, and MLS. Moreover, Vancouver would
have in place the market conditions for a professional basketball team
to return to the city. When the previous NBA franchise left in 2001,
the Vancouver CMA had a population of barely 2 million at the time and
the Canadian dollar was sinking. Both those factors have changed.
Assuming fan support can be cultivated, Vancouver could get a second
chance at pro basketball.
An earlier briefing in this series identified six potential new markets for the CFL:
Ottawa-Gatineau (where the league is already scheduled to return),
London, Kitchener-Waterloo-Cambridge, Moncton, Halifax, and QuÃ©bec
City. By 2035, Saskatoon joins the list. Saskatchewan will post the
fastest growth rate among Canada’s provinces over the next 25 years and
Saskatoon’s population will grow from 265,000 (2010) to 430,000 in
2035. As a result, Saskatchewan will eventually have the market
conditions in place to support two CFL franchises in the province.
One additional scenario would shake up Canada’s pro sports market – a
full-time National Football League franchise in Toronto. As North
America’s most popular league, an NFL team calling Toronto home would
obviously affect the CFL; it would also reshape the pro sports
atmosphere for the leagues and franchises currently in the market.
Previous efforts to attract a permanent NFL team to Toronto have been
unsuccessful; but, over a 25 year window, the possibility of a future
NFL franchise cannot be discounted.
Turning to one other growing sport, Canada is now home to three Major
League Soccer teams: Toronto FC, Vancouver Whitecaps, and MontrÃ©al
Impact. A factor in the rise of soccer’s popularity is population
diversity, as immigrants to Canada are coming from countries where
soccer is the traditional favourite sport. Calgary is expected to
exceed 2 million people in 2035, while Edmonton and Ottawa are forecast
to boast populations of 1.7 million apiece. Furthermore, all three
cities can expect their populations to become more diverse. As result,
these three markets should be able to support NHL, CFL, and MLS
This is the final publication in the Playing in the Big Leagues series. Since 2011, the series, has examined what it takes for a
professional sports team to be successful in Canada, focusing on market
economic conditions, league-wide competitive conditions,
franchise-level factors, and the role of public funds in pro sports
SOURCE CONFERENCE BOARD OF CANADA