The NHL's Bad Bet on Las Vegas
Could we soon see ice in the Nevada desert?
According to TSN hockey broadcaster Bob McKenzie, the National Hockey League is considering establishing a franchise in Las Vegas, which would make it the first major professional sports league in Sin City. Although there are no immediate plans for expansion, hockey insiders are confident in its eventuality.
The viability of a team in Vegas has been hotly debated, with the gambling stigma in sports and the competition from other entertainment venues as the primary detracting arguments. Then there's the scheduling. The city's largest employers are the entertainment and service industries, with the majority of those jobs having night and weekend hours that would conflict with games.
Supporters say a team would have no problem filling seats with the almost 40 million tourists who visit Vegas each year, which is probably true. There's also a potentially huge market for corporate sales, as sporting events are often favorite venues for businesses courting new clients and executives schmoozing existing ones.
But selling tickets to individual games over a season isn't the main problem for major-league sports in Vegas. Rather, it's the sustainability of a fan base that isn't demographically ideal for a new team. Who, exactly, is the Las Vegas fan, and how invested would he or she be in the city's sports? Nevada is a state of transplants, boasting the smallest percentage of natives in the country. According to the Las Vegas Sun, 57 percent of its recent growth is people moving from other states -- people who already have allegiances to their hometown teams.
For an idea of just how fickle the local sports fans can be, look no further than the yearly attendance figures for the city's minor league baseball team, the Las Vegas 51s. When the team came under the Los Angeles Dodgers' system, attendance steadily rose from an average of 4,621 fans a game in 2001 to a peak of 5,279 in 2008 (with an anomalous dip in 2004). After 51s were acquired by the Toronto Blue Jays in 2009, per game attendance dropped to 4,752 and continued to fall to 4,388 by 2012, the team's second-lowest figure since relocating to Las Vegas 30 years ago.
Even more than game attendance, the success of sports is driven by television. According to Nielsen, Las Vegas ranks 42nd in television market size with only an estimated 726,010 TV households. The concentration of the city's significant minority population is a particular challenge for the NHL, a league whose players and fans are overwhelmingly white. Las Vegas is 31.5 percent Hispanic -- a demographic that market researchers are touting as especially integral to sports advertisers. Last year, Scarborough Research found that just 9.4 percent of NHL fans are Hispanic, while only 1 percent of Latinos had watched a hockey game in the past year. So if a team somehow figures out how to engender the loyalty of Las Vegas fans, that team most likely won't be playing hockey.
Still, there's another chance we'll get to see Las Vegas experiment with professional sports. AEG and MGM Resorts International have teamed up on a plan to build a $350 million, 20,000-seat arena on the Las Vegas Strip. The lack of an appropriately sized stadium and taxpayers' unwillingness to fund one during an economic downturn was a huge barrier to a Las Vegas sports team that has now been cleared. The question remains: If they build it, will they come?
(Kavitha A. Davidson is a Bloomberg View columnist who writes about sports. Follow her on Twitter at @kavithadavidson.)
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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