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Who wins when the Habs are in the playoffs?

April 12, 2017

The Canadiens have made the playoffs, to the infinite delight of hockey fans and retailers alike. The team can expect significant additional revenues, and the same is true of bars, brewers and the mediaAs we enter the “real season” of hockey, does the health of Montreal’s economy truly rest on the shoulders of Carey Price?

Each time the national anthem fills the Bell Centre this spring, another $3 million will be added to the coffers of the Montreal Canadiens. A particularly lucrative “overtime” period, shall we say, with soaring revenues and player salaries already paid.

The hockey faithful keep the cash register ringing: playoff tickets are more expensive than regular season tickets, beer is already overpriced, and revenues for food concessions and tie-in products will swell. Furthermore, it’s also an extraordinary opportunity to lift the notoriety of this hockey team owned by the Molson family, with some two million viewers watching each game, unprecedented media coverage, and boosted visibility in bars… and on fans’ cars.

Good season or bad, the Canadiens easily monopolize 10% of all Quebec media coverage. During the post-season, that percentage explodes. Although the exact amount of direct spinoffs is hard to tally, Forbes magazine estimates that the Canadiens brand is valued at $170 million. And that just comprises the team’s logo, colours and image; it does not include the team, the Bell Centre or other tangible aspects.

Hockey players also profit from a strong playoff performance. The Stanley Cup comes with a $150,000 bonus for each player. Although that might not make much of a difference for Crosby, Kane or Ovechkin, it represents as much as a 10% bonus for more than half of the Canadiens roster, who earn less than $1.5 million per season.

Owners and players are not the only ones rubbing their hands in glee. Many businesses also profit from fan excitement. For Groupe Sportscene, the company that owns the La Cage restaurant chain, spring numbers greatly depend on the Canadiens’ playoff performance. In 2014, La Cage reported additional sales of nearly $2 million before the Habs fell to the New York Rangers in the Eastern Conference finals. The team’s success helped the restaurant chain achieve its highest numbers in six years.

That same year, Molson Coors lamented that only one Canadien team made it to playoffs. Although the Montreal-based brewer, which distributes outside Quebec, denies being dependent on hockey for sales, mere mention of the 2012 lock-out will trigger a massive headache for most beer executives. At the time, beer sales all but dried up in Canada and the CEO admitted that it would take months for the brewery to recover from that stumble.

Hockey fans will be glued to their screens, much to the delight of Rogers Media. In 2014, the conglomerate purchased the broadcast rights for NHL games in Canada, agreeing to pay more than $5 billion over 12 years for the privilege. The execs undoubtedly flinched last spring when, for the first time since Gump Worsley quit the Habs, no Canadian team made it to the playoffs. The fall-out? A 60% drop in TV viewership, as compared to the previous season. Fewer viewers equal less advertising dollars. This year, with five Canadian teams in the playoffs, the people at Rogers Media must be doing cartwheels.

The number of wins matter, but the number of games played will also impact team finances and the local economy. During the 2012 World Series, a sweep by the triumphant San Francisco Giants was disappointing for many, as a longer series with the Detroit Tigers could have generated an additional $100 million in revenues.

However, do remember that sports events do not generate more money, so much as reallocate it. For each packed game night at the bar, there’s one less outing to the movies or the museum. For each $12 beer sold at the Bell Centre, there’s an empty plate at a sushi bar. It is unlikely that money not spent on celebrating the Habs will end up in an RRSP account.

On the ice and on the market, there are winners and there are losers. The Canadiens’ performance will influence how money is spent, but it’s fairly negligible on the global economy. Unlike the Super Bowl or the Canadian Grand Prix, very little foreign cash will end up in the Habs’ coffers. For each fan of the opposing team that travels (and spends) to see their team play here, there’s a Montreal fan who follows their team on the road.

However, wins on the ice do contribute to a general sense of optimism and confidence. It has been noted that celebrations are not just limited to sports bars and arenas. In fact, baby booms are often observed following a big sports victory. For example, researchers in Spain recorded a spike in births nine months after Barça, Barcelona’s Football Club, beat Chelsea to move to the finals of the UEFA Champions League. There has also recently been a baby boom observed in Reykjavík; it’s been nine months since the Icelandic football team became the Cinderella story of last summer’s Euro Cup. Celebrating the Thunderclap has extended to include a record number of births.

That said, we probably shouldn’t rely too much on Carey Price to lift Quebec’s birth rate… or to boost the Montreal economy. The hopes of local fans for sports glory are pressure enough.

This article was originally published online in French on L’actualité.

Image by Richard Wolowicz