The National Hockey League announced this afternoon that the annual Winter Classic has been cancelled as league owners and players continue waging a labour dispute. This year’s edition would have been played by the Toronto Maple Leafs and Detroit Red Wings at the University of Michigan’s “Big House” before a crowd in excess of 100,000 people.
The Winter Classic is considered one of the most important dates on the NHL calendar. The outdoor game is typically played on New Year’s Day before massive crowds and is broadcast on national TV in the United States, where hockey rarely gets a sizable viewing audience. Last year, the Winter Classic drew more American TV viewers than all but one Stanley Cup game.
The event might be the NHL’s best promotional tool, and this year’s game—between two storied Original Six franchises—was expected to produce even bigger ratings and public interest.
For obvious reasons, businesses in Ann Arbor, Detroit and Windsor have long feared a possible cancellation of the game.
The economic impact of the past three Winter Classics has been estimated at between US$22 million and $36 million for host cities. But this year’s edition was set to be more than just a game; it was scheduled as a two-week event featuring additional games from the American Hockey League and Ontario Hockey League, plus a college tournament and Leafs-Wings alumni game.
For those reasons, the NHL believed the local impact might surpass $75 million.
Local officials certainly had their own predictions. Windsor Mayor Eddie Francis expected the game to bring “well over” $2 million in direct spending to his city. A tourism official in Ann Arbor believed her city would see a direct impact of roughly $15 million.
It’s difficult to gauge the entire economic loss to the region. As I’ve written before, hockey fans will find other places to spend their money in the event of a lockout. So the overall effect on local economies should be minimal. Not to mention that economic impact figures from pro sports leagues are both biased and highly questionable. Having said that, certain businesses in the region—hotels, restaurants and tour companies, for instance—will suffer the consequences.
For their part, the NHL will pay a $100,000 cancellation fee to the University of Michigan, with whom they signed a $3-million contract for use of the university’s football stadium. (After today, the cancellation fee would have risen to $250,000.) The league’s overall losses are substantially higher.
Sources have said the Winter Classic would have brought in about $10 million in gate receipts. For comparison, the Montreal Canadiens led the NHL in ticket revenues for the 2010-11 season, earning about $2 million per game, according to financial data leaked to the Toronto Star. When accounting for merchandise and other sales, the league will lose about $15 million from the cancelled game, according to The Globe and Mail’s David Shoalts. Sponsorship losses are difficult to pin down, but it’s expected they’re in the millions, too.
The long-term effect could be even greater.
Losing the Winter Classic is terrible PR for the NHL. This game in particular was going to be something special: two historic teams, two diehard fan bases, an expected Guinness World Record for single-game hockey attendance and must-see TV during the holidays.
Instead, the NHL will suffer losses—both monetary and symbolic—that make their $100,000 cancellation fee look like pocket change.